Debt collectors are all things to all people. To clients, we are literally their Advocates, championing their cause and taking the stress out of late payment. To debtors, we are pariahs and the harbingers of doom. In this article, we look at the actions of some dodgy debtors and creditors in the name of debt collection.
The Debt-demic
Latest figures from the Insolvency Service reveal that 1,036 directors were disqualified in 2024-25, of which 71% involved Covid loan abuse. The average length of a disqualification was 8 years. Covid loans were explicitly for the economic benefit of a company, making disqualification an easy verdict when used by directors for personal enrichment. For dodgy directors, obtaining a loan for a fake company or one destined for liquidation was a license to print money.
The number of compulsory liquidations initiated by creditors rose by 14% in 2024, the highest in over a decade. Creditors are becoming more proactive about balancing their books, with debt collectors being called upon earlier in the collections process. The notion of debt collectors being a final Hail Mary is out of fashion, with firms such as Advocate becoming an extension of Credit Control and a key part of keeping money flowing down the supply chain.
Scam Debt Collectors
Bristol-based Encore Debt Recovery was wound up by the High Court in February 2025 following an Insolvency Service investigation that found the business had scammed 27 clients of all or some of the monies recovered on their behalf. The sole director and shareholder pocketed significant sums, ignoring emails and phone calls from clients waiting for their money. Such misconduct undermines the integrity of the whole debt collection industry. Debt collection agencies such as Advocate have checks and balances in place to ensure all client funds are forwarded on the same day by bank transfer, leaving no client out of pocket.
Shocking Debt Collection
Energy companies have an unenviable reputation for hostile debt collection practices and the force-fitting of prepay meters. Citizens Advice has reported a rise in people seeking help for what it calls aggressive debt collection tactics. In 2024, a south-east London pensioner was told by British Gas he owed £2,500 and claimed to have instructed debt collectors. All this despite the pensioner’s quarterly bills averaging £65. After intervention by BBC Money Box, the energy supplier acknowledged the bill was a mistake caused by their smart meter and offered £500 in compensation.
Get Out of Debt Free
The winding up of Atherton Corporate (UK) by the Insolvency Service sent shockwaves through the corporate restructuring sector. Known as the Atherton Scheme, incumbent directors were told they could sell their debt-ridden business for a nominal sum and transfer the assets to a new company, thereby distancing themselves from liability before the business was liquidated. The Insolvency Service found that thousands of creditors missed out on £7.6m of assets, which disappeared in the dying throes of 12 companies. Atherton’s sole director received a 9-year disqualification for failing to adequately identify assets and company records, repeatedly subverting the insolvency system and breaching his duty to act in the best interests of creditors.
Enforcement Standards
The Civil Justice Council has warned that enforcement of County Court Judgments for smaller debts is slow and ineffective. County Court Bailiffs (CCB) are salaried employees of the courts who enforce Judgments of up to £5,000. The debt collection industry is results-driven, which is why here at Advocate, we rarely recommend the use of CCBs. For a small fee, the Judgment can be transferred up to High Court Enforcement Officers (HCEO) who work for private firms on commission. HCEO firms are dependent on high success rates and fast turnarounds to remain commercially viable. Advocate only works with the most successful and efficient HCEOs. For B2B judgments, HCEOs are the enforcers of choice.
A report published by the Enforcement Conduct Board found 6% of visits by CCBs and HCEOs breached one or more standards of enforcement. This includes public embarrassment, breach of privacy, and unprofessional conduct. To ensure the high professional standards of clients and Advocate follow through to enforcement, we regularly review the HCEO firms on file to ensure compliance.
Fake Bailiffs
The industry trade body for bailiffs, the Civil Enforcement Association, has warned of an increase in criminals posing as bailiffs to extract money from their victims. Urgency is created by warning victims that bailiffs will attend within 10 minutes to remove home contents if payment of £x is not made immediately, or by claiming there is a warrant out for their arrest. Scammers have been known to record the Court’s own telephone system, so when the victim calls the number provided, they are further duped into believing the bailiff’s authenticity. Whilst the paperwork can look convincing, any seeds of doubt should not be overlooked in the heat of the moment. One would-be victim refused to make payment when instructed to deposit £3,900 into the bailiff’s personal bank account. Another allegedly had a Judgment for Google marketing and refused to comply because the business had never advertised online. Others have found spelling errors and inconsistencies in the fake paperwork.
Fake Evictions
In the private rental sector, several cases have come to light of families being evicted by uniformed security guards, giving the impression of a court order. The landlord then increases the rent and finds new tenants. Genuine enforcement officers will always allow time for the defendant to validate their credentials and the court paperwork. Evicting tenants without following due process is a criminal offence.
Milking the Council Cash Cow
Councils generate revenue through council tax, rates, social rents, subsidies, and profits from municipal facilities such as car parks and leisure centres. When this results in a deficit, they borrow money through the Public Works Loan Board on the basis that the councils self-certify they can afford the repayments. Self-certification blurs the lines between political and financial decision-making. The London Council Collective has highlighted a shortfall between the cost of social housing and the government subsidy. This could force more councils to file Section 114s, equating to bankruptcy. Unlike taxpayers and the SMEs Advocate works with, councils can fail and continue to operate.
Councils Cashing in on Crisis
The Centre for Social Justice reported that council tax arrears stood at £6bn in 2024, with the cost-of-living crisis forcing more households into debt. For councils looking to recover high-value arrears or low-value parking fines, the use of CCBs is seen as a cheap way to outsource. London councils top the list of the number of bailiff instructions per 1,000 households, with Waltham Forest, Westminster, Croydon and Haringey amongst the highest. Mistaken identity, incorrect calculations, and the vulnerable are collateral damage. Low and middle-income households face a disproportionately heavy-handed approach from councils. Council Tax Relief is a means-tested benefit and still results in debt collectors adorning the doorstep of those struggling to pay. The Credit Services Association has called out councils for being outshone by the debt collection methods used in the private sector and said more must be done to ensure fair treatment.
Spitting Image
The debt collection industry is heavily regulated, and whilst most firms uphold the standards laid down, a minority of dodgy Dave rogue operators fuel the image that debt recovery is the wild west. Every industry has its share of bad actors. The debt collection industry is unique in that mud sticks to everyone. Even the cleanest Teflon-clad debt collection agencies with enviable reputations and five-star Google reviews still get tarred with that same brush.