Disputed debt and credit-file errors

Debt collection, disputed debts and errors on your credit file are governed by an overlapping set of rules: the Financial Conduct Authority’s Consumer Credit sourcebook (CONC), the Consumer Credit Act 1974, and data protection law under the UK GDPR and Data Protection Act 2018. The right approach depends on exactly what has gone wrong, so the guidance below is organised by the three problems you have raised, followed by practical steps.

Dealing with debt collectors

A debt collector chasing you is either the original creditor’s agent or a debt purchaser who has bought the account. Either way, if the firm is carrying on debt collection it must be authorised by the FCA and must comply with CONC, in particular CONC 7. This regulates how debts are pursued and what standards firms must meet.

The most important point is that if you dispute a debt on valid grounds, or on what may be valid grounds, the collector must investigate and provide details of the debt to you in a timely manner. Under CONC 7.14, valid grounds for disputing a debt include that you are not actually the borrower under the agreement, that the debt does not exist, or that the amount being pursued is incorrect. Where the dispute concerns your identity or the amount, the burden is on the firm, not on you, to establish that you are the correct person and that the sum claimed is right. In practice, that means you can require them to prove the debt rather than simply paying because you have been asked to.

For a regulated credit agreement you can also make a formal request under sections 77 to 79 of the Consumer Credit Act 1974 for a copy of the agreement and a statement of account. If the creditor cannot produce the required documents, the agreement becomes unenforceable while they remain in default of that request, meaning they cannot obtain a court judgment to enforce it until they comply. This is a well-established tactic where you doubt that a debt is properly documented or that it belongs to you.

Certain collection behaviour is not permitted. Misleading you about the legal position, pressurising you unfairly, contacting you at unreasonable times or with unreasonable frequency, pursuing you when you have raised a genuine dispute, or implying court or enforcement action that is not actually being taken, can all breach CONC and the rules against unfair commercial practices. If a collector behaves this way you can complain to the firm and then escalate.

You should also keep the question of limitation in mind. For most ordinary consumer debts in England and Wales, the Limitation Act 1980 gives a six-year period. If it has been more than six years since you last made a payment or acknowledged the debt in writing, and no court claim was issued in that time, the debt is likely to be statute-barred, meaning a court cannot be used to force you to pay. The debt still technically exists but becomes unenforceable through the courts. Be careful, because making a payment or acknowledging the debt in writing can restart the clock, so do not admit liability in writing on an old debt you may wish to argue is statute-barred.

Disputed student debt

How you challenge a student debt depends heavily on what kind of debt it is, and it is worth being precise about this because the routes are very different.

If it is a UK government income-contingent student loan administered by the Student Loans Company, it is not an ordinary consumer credit debt and it is not chased by ordinary debt collectors in the usual way. Repayment is normally collected through the tax system by HMRC once your income exceeds the relevant threshold, and it does not appear on your ordinary credit file in the way a commercial loan does. If your dispute is about the balance, the interest, the repayment threshold, or deductions taken through PAYE or self-assessment, you would raise this directly with the Student Loans Company and, if unresolved, use its formal complaints procedure. Overpayments recovered through the tax system can usually be refunded, and errors in the recorded balance can be corrected by supplying evidence of payments made.

If, on the other hand, the debt is a commercial or private student loan, a tuition debt owed directly to a university, an alleged overpayment of a grant or bursary, or a debt that has been passed to a private collection agency, then it is treated much more like an ordinary debt. In that case the CONC and Consumer Credit Act points above apply, and you can insist that the party pursuing you proves the debt exists, that it is yours, and that the amount is correct. A university’s own rules and internal debt procedures are authoritative for how it handles tuition or accommodation debts, so it is worth checking the specific policy the institution relies on.

Because the label student debt covers such different things, the single most useful step is to identify precisely who the creditor is, what type of debt it is, and how it is being collected. That determines whether you are dealing with the Student Loans Company, a university, or a commercial lender or collector, and therefore which complaint and dispute route applies.

Incorrect entries on your credit file

Your credit file is compiled by credit reference agencies, principally Experian, Equifax and TransUnion, but the individual entries are supplied by lenders and other data providers. This distinction matters, because in most cases the agency is not responsible for the accuracy of the underlying entry, the original lender or organisation that supplied it is.

As the Information Commissioner’s Office explains, if your file is inaccurate you can raise it with the credit reference agency that gave you the file, but because the problem often lies with the original lender you will usually also need to contact that organisation directly. The credit reference agency will typically pass a dispute to the data provider to investigate.

You have specific legal rights here under data protection law. Under the UK GDPR you have the right to rectification of inaccurate personal data, and you can require a data controller to correct or erase information that is wrong. If a debt is not yours, was settled, is being reported with the wrong status or amount, or is a duplicate, you can demand that it be corrected. You also have the right to add a notice of correction, a short statement of up to around 200 words, to your file explaining your side where the entry is disputed but the lender will not remove it, so that anyone reading the file sees your explanation.

If you have contacted both the credit reference agency and the original lender and there is an obvious inaccuracy they refuse to correct, you can complain to the Information Commissioner’s Office. The ICO can consider whether the organisation has handled your personal data correctly, although it will not adjudicate the underlying financial dispute about who owes what. For that financial dispute, the Financial Ombudsman Service is usually the better route where the data provider is an FCA-authorised firm.

Complaints and escalation routes

For any FCA-regulated firm, including most debt collectors, debt purchasers and lenders, the process is to complain to the firm first in writing, giving it the chance to resolve matters. If you are not satisfied after eight weeks, or you receive a final response you disagree with sooner, you can refer the complaint to the Financial Ombudsman Service, which is free to use and can direct a firm to correct records, stop unfair collection activity and pay compensation. The Financial Ombudsman is generally the most effective and lowest-risk route for disputes about how a debt has been collected or reported.

For data accuracy specifically, the Information Commissioner’s Office is the regulator, as above.

Court action is a last resort rather than a first step. It can be used, for example, to seek a declaration that a debt is not owed or an order to correct data, but it carries cost, delay and litigation risk, and the ombudsman and regulator routes will usually resolve the matter more cheaply. Court is more likely to become relevant if a creditor issues a claim against you, in which case you would defend it, raising any dispute over the amount, ownership, unenforceability for want of documents, or limitation as appropriate.

Practical next steps

1. Identify exactly who is pursuing you and in what capacity: original creditor, agent, debt purchaser, the Student Loans Company, or a university. Get this in writing.

2. If you dispute the debt, write to the collector stating clearly that you dispute it and on what basis, for example that it is not yours or the amount is wrong, and require them to investigate and provide full details. Do not admit liability, especially on older debts, and do not make a token payment on a possibly statute-barred debt.

3. For a regulated credit agreement, send a section 77 to 79 request for the agreement and statement of account, enclosing any fee required, and keep a record. If they cannot produce the documents, the debt is unenforceable until they do.

4. Obtain your statutory credit reports from Experian, Equifax and TransUnion and identify every entry you believe is wrong, noting the data provider for each.

5. Raise a dispute with both the relevant credit reference agency and the original data provider, invoking your right to rectification under the UK GDPR, and ask for correction or a notice of correction where appropriate.

6. Keep a full paper trail of every letter, email and phone call, with dates, as this is your evidence if you need to escalate.

7. If the firm does not resolve matters, escalate: to the Financial Ombudsman Service for FCA-regulated firms and unfair collection or reporting, and to the Information Commissioner’s Office for uncorrected data inaccuracies. For a Student Loans Company dispute, use its complaints procedure and, if unresolved, the relevant complaints escalation route it identifies.

Key facts that would sharpen this advice

The answer would change materially depending on: whether the student debt is a government income-contingent loan, a private loan, or a university tuition or accommodation debt; when you last paid or acknowledged the debt, which affects limitation; whether the credit-file entry is wholly incorrect, out of date, or merely disputed; and whether any court claim has already been issued against you. If you can pin down those points, the correct route among the ones above becomes clear.