Unable to pay? Managing your debt

13 March 2013

If you're having difficulty paying a bill, don't ignore it.

Talk to your communications provider as soon as possible. You may find they have suggestions that ease the pressure, and they may be able to help if a change in your personal circumstances is giving you money problems.

Things you may wish to ask your provider about:

  • Moving to a cheaper package
  • Paying the debt over time
  • Reducing the monthly payments to an affordable rate while you complete a debt repayment plan
  • Waiving part of the debt if you agree to pay the remainder within 14 days and to pay the next 12 monthly bills in full and on time
  • Changing the payment date or switching to direct debit
  • Selling old mobile handsets for recycling
  • Details of debt advice agencies

Your provider is not obliged to offer you any of these things, but if you explain your circumstances to them, they should be able to help explore the options that may be available to you, and to send you any information that they publish about money advice.

For general advice on debt and managing money, the Citizens Advice consumer service may be able to help.

You may also wish to contact National Debtline or StepChange Debt Charity. If you find that you're not able to make any of your repayments and/or you're facing the threat of court action, you should seek free, independent debt advice straight away.

It is best to avoid disconnection if possible - some communications providers charge reconnection fees to customers who have been disconnected because of debt. These fees are in addition to payment of the outstanding debt

Alternatively, disconnected customers may be treated as new customers on reconnection and have to go through credit-checking processes, with possible deposits or upfront payments, depending on credit risk.

If a bill is unpaid, communications providers usually issue reminders in the form of email, phone calls (with voicemail messages left), SMS or letter.

If these do not result in payment, providers may restrict customers' accounts. Typically, outgoing calls are restricted to emergency calls and calls to the service provider only, while inbound calls are unaffected. Restriction is usually for a limited period of time and will be followed by disconnection if payment is not made.

Some telecoms providers have specific protocols relating to certain groups of consumers, for example those who are chronically sick or disabled. Additional effort is made to contact these customers before their service is restricted or disconnected.

If you don't agree with the charges on your bill, you should first check with everyone else in the house to make sure that the charges do not relate to services they have used.

If the charges are still not recognised, contact your service provider. It may be helpful to send them a copy of your bill, highlighting the relevant charges and the reasons why they are being disputed.

If your provider doesn't agree with you about the disputed charge, you can follow their formal complaints procedure. Details of this should be available on their website or from customer services.

If you exhaust this process and remain unhappy, or if your complaint has been ongoing for more than 8 weeks, you can submit your complaint to an independent Alternative Dispute Resolution (ADR) scheme.

The ADR provider will look at your arguments, and your provider's, and come to a decision they think is fair.

There are two ADR schemes, Communications and Internet Services Adjudication Scheme (CISAS) and Ombudsman Services: Communications, and all service providers must belong to one of these schemes. Your phone company will tell you which scheme it belongs to, or you can use our ADR checker.

If you find that you have been referred to a debt collection agency while in dispute with your provider, you should contact the agency and explain this to them.

Although a communications provider is entitled to pursue customers for money which they believe is owed, we would expect them to take account of the fact that a bill is being disputed and allow you time to resolve your dispute. It's also important you follow your phone company's complaints procedure.

Once debt is devolved to a debt collection agency, that is not necessarily the end of the matter for the communications provider.

Issues raised by customers with debt collection agencies can be referred back to them for review, and it is possible for action to be put on hold or for the debt to be returned to the communications provider and for the dispute to be dealt with by them.

If you feel that you have been mistreated or harassed, either by a company to which you owe money or by a debt collection agency, you can complain about the way you've been treated.

You should first write to the company or debt collection agency in question setting out your complaint. You can also complain to the organisation that you owe money to. If they do not adequately resolve the issue, you may be able to take your complaint to the Financial Ombudsman Service.

Debt collection agencies are regulated by the Financial Conduct Authority, which publishes a guide called How to complain about financial services.

You can also complain to their trade association, if they are a member. The two largest organisations are the Civil Enforcement Association website or the High Court Enforcement Officers Association website.

If debt collectors continue to cause you concern, you can seek advice from the Citizens Advice consumer service.