Tracing firms shouldn't ask neighbours about a debtor, according to the OFT.
Some practices from debt collectors are "breaching the spirit" of industry-wide guidance, the Office of Fair Trading (OFT) has said.
According to the organisation, some firms are roping in neighbours for help in tracking down the whereabouts of debtors - and tipping them off about the financial woes in the process. In a statement, the OFT warned collectors that they will be taking "swift enforcement action" on this practice - and said that it had already taken steps against "trace and collect" company Link Financial for this reason.
The South London-based firm has now promised to change its practices as a result of the OFT's intervention.
Nigel Cates, deputy director for consumer credit at the organisation, said: "Using neighbours to pass on messages to trace subjects is an unacceptable practice that contravenes our debt collection guidance. It has the potential, whether unintentional or not, to lead to the disclosure of private financial affairs and to cause distress and embarrassment.
"We are pleased that Link has acted responsibly and taken positive steps to change its policies and procedures."
Debt collection guidance issued by the OFT in 2006 set out minimum standards which UK collectors must adhere to - and it is these rules the tracing practices are in breach of.
