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Collection Letter for the United Kingdom

Collection Letter Template for England and Wales

A Collection Letter is a formal written communication used in England and Wales to request payment of outstanding debts. It serves as an official demand for payment, outlining the amount owed, payment terms, and potential consequences of non-payment. The document must comply with UK debt collection regulations, including the Consumer Credit Act 1974 and FCA guidelines, while maintaining professional standards and avoiding harassment.

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Collection Letter

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What is a Collection Letter?

Collection Letters are essential documents in the debt recovery process under English and Welsh law. They serve as formal written demands for payment and are typically issued when standard invoicing processes have failed to secure payment. A Collection Letter must carefully balance assertiveness with compliance with UK regulations, including the Consumer Credit Act 1974, FCA guidelines, and harassment laws. The document should clearly state the debt amount, provide payment instructions, and outline consequences of non-payment while maintaining professional standards. It's crucial that Collection Letters are drafted to be both effective in securing payment and legally compliant to avoid potential regulatory issues.

What sections should be included in a Collection Letter?

1. Sender Details: Full business name, address, and contact information of the collecting entity

2. Recipient Details: Full name and address of the debtor

3. Debt Details: Original amount, current amount, interest accrued, and reference numbers

4. Payment Demand: Clear statement of amount due and payment deadline

5. Payment Instructions: How and where to make the payment

What sections are optional to include in a Collection Letter?

1. Payment History: Summary of previous payments and correspondence, used when there's relevant history

2. Interest Calculation: Breakdown of interest charges, used when applying statutory or contractual interest

3. Legal Consequences: Description of potential legal action, used in final demand letters

4. Payment Plan Options: Alternative payment arrangements, used when willing to negotiate terms

What schedules should be included in a Collection Letter?

1. Statement of Account: Detailed breakdown of charges, payments, and current balance

2. Original Invoice Copy: Copy of the original invoice(s) relating to the debt

3. Payment Slip: Detachable portion for making payment with reference details

4. Information Sheet: Statutory information about debt collection and debtor rights

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Cost

Free to use
Relevant legal definitions















Clauses















Industries

Consumer Credit Act 1974: Primary legislation regulating consumer credit and hire agreements, including requirements for fair treatment of debtors and rules for enforcement and collection practices

Financial Services and Markets Act 2000: Provides the regulatory framework for financial services and is particularly relevant if the debt relates to financial services

Late Payment of Commercial Debts (Interest) Act 1998: Applies to business-to-business debts and sets statutory interest rates for late payments

Data Protection Act 2018 and UK GDPR: Governs the handling of personal information in debt collection, including storage and processing of debtor information

FCA Regulations: Includes CONC (Consumer Credit Sourcebook) rules and debt collection guidelines for fair treatment of customers

Limitation Act 1980: Sets time limits for bringing claims, generally 6 years for most debts

Protection from Harassment Act 1997: Prevents aggressive collection practices and sets boundaries for collector behavior

Consumer Rights Act 2015: Ensures fairness in consumer contracts and is relevant when dealing with consumer debts

Teams

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