27% of adults in the UK have, at some point, been contacted by a person or group trying to recover outstanding debts on behalf of a creditor, according to research conducted on behalf of debt advice and solutions provider Debt Advisory Centre.
People aged between 25 and 34 are the age group most likely to have been contacted with 39% saying that that they have been.
Of those who have been contacted by a debt recovery company, 27% did not fully understand the legal action being taken against them and were unsure of their legal rights. 39% did not understand the different powers debt collectors, bailiffs and high court enforcement officers (HCEOs) have.
Complimentary research suggests that more than four million people in the UK (8% of UK adults) have received a CCJ or Court Decree in the last five years. Of these, 9% have debts of over £10,000 listed. This is particularly concerning because so many do not understand what their rights are when faced with this type of court judgement, Debt Advisory Centre said.
A CCJ is a formal decision handed down by a court in England or Wales when an individual owes money and has defaulted on their repayments. A CCJ remains on the individual’s credit file for six years, unless they are able to repay their debts in full within one month. In Scotland, the process is called a Court Decree and lenders make a claim through the sheriff court.
Conversely, 10% had debts of just £250 or less listed in their CCJ/Court Decree.
The research also found that men are more likely than women to have received a CCJ or Court Decree in the last five years (10% of men compared to 6% of women). 14% of 18 to 24-year-olds have received a CCJ or Court Decree in the last five years, compared to just 2% of over-55s.
Ian Williams, spokesman for Debt Advisory Centre, says: “Our figures highlight the scale of financial difficulties across the UK, especially with young people – where 1 in 7 have already got a CCJ or Court Decree to their name by aged 24. In most cases these could have been avoided if people had sought debt advice early.”