Financial Conduct Authority

The Financial Conduct Authority’s (FCA) Consumer Credit Sourcebook (CONC) provides guidance on whether a debt is being collected fairly. The FCA does not investigate individual complaints, but its rules can be used when a client is disputing a debt on the grounds of prescription. The FCA’s rules and guidance apply to all debts no matter how old they are.

Key areas of guidance

CONC 7.15.3: in Scotland, a statute-barred debt ceases to exist and is no longer recoverable if:

(1) a relevant claim on behalf of the lender or owner has not been made during the relevant limitation period; and

(2) the debt has not been acknowledged by, or on behalf of, the customer during the relevant limitation period.

CONC 7.15.7: it is misleading for a firm to suggest or state that a customer may be the subject of court action for the sum of the statute-barred debt when the firm knows, or reasonably ought to know, that the relevant limitation period has expired.

CONC 7.15.8: a firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute-barred.

Not only will a statute-barred debt not be recoverable by the creditor, but the creditor must stop pursuing or threatening legal action for a statute-barred debt.