Guardian.co.uk

Debt collection firms may face a government crackdown amid concern about the 'aggressive' tactics used by some, such as chasing the wrong people and refusing to deal with debt advisory services.

Gareth Thomas, the consumer minister, told the Guardian he had summoned the debt collection industry's main trade body to a meeting to discuss these issues. Speaking on the eve of the Guardian's first Debt Debate in central London today, Thomas indicated it was too early to say what the outcome may be, but that it could include enforcement action by the Office of Fair Trading or changes to legislation.

It is the latest government move designed to ease the impact of the credit crunch on homeowners and businesses.

This year the OFT said it had seen a 'marked increase' in complaints about the activities of debt collectors, while concern has been expressed that the worsening economic climate could see banks, card companies and firms that have bought debts toughen their stance towards those with repayment problems.

Thomas cited the case of Beryl Brazier, a great-grandmother who committed suicide in 2006 over mistaken debt demands. Brazier, who had arrears of about £500 on a loan, began to receive letters demanding she repay £17,000 after a database firm mistakenly linked her home with the name of a man who lived 200 miles away.

His debt was sold in 2005 to Thames Credit, which continued to request repayment of the loan via letters. After Brazier sent it £500 with a letter saying she would repay the rest, she took her own life.

The minister has requested a meeting with Kurt Obermaier, executive director of the Credit Services Association (CSA), whose members have some 20m debt cases worth £15bn referred to them annually. Thomas said the three key areas that would be discussed were:

• Tracing problems. Errors can creep into the process when firms attempt to find debtors who have moved.

• 'Aggressive/oppressive behaviour,' such as calling people at unreasonable times or repeatedly phoning them at work; resorting to using documentation 'that looks like it has the weight of the courts behind it'; referring to 'extreme solutions' such as county court judgments and bailiffs, and refusing to deal with debt advice agencies.

• Disputed debts. This can involve people being chased for debts that are not theirs and cases where the person contests the claim - for example, over the amount.

'We are not saying members of the CSA are responsible for all those, but through the CSA we are keen to talk to the industry more generally. To be fair, most of the industry is responsible,' said Thomas. He added it was 'perfectly reasonable to expect people to have to repay debts'.

The outcome may simply be an information exercise aimed at ensuring companies are aware of their responsibilities. However, he added: 'We may need to do more on the enforcement side, or it may be there are legal changes required.'

In April, the OFT warned 13 companies about their debt collection strategy after complaints of unfair practices.

A CSA spokesman said: 'We have been in correspondence with Gareth Thomas and have been encouraged by his understanding of the issues and challenges that we face.'