Debt Recovery and Enforcement Act 2012

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AT 1 of 2012

DEBT RECOVERY AND ENFORCEMENT

ACT 2012

Debt Recovery and Enforcement Act 2012 Index


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DEBT RECOVERY AND ENFORCEMENT ACT 2012

Index Section Page

PART 1 – INTRODUCTORY 5

1 Short title .......................................................................................................................... 5
2 Commencement .............................................................................................................. 5
3 Interpretation ................................................................................................................... 5
PART 2 — LICENSED DEBT COLLECTORS 6

4 Requirement for a licence .............................................................................................. 6
5 Application for a licence ................................................................................................ 6
6 Grant or refusal of a licence ........................................................................................... 6
7 Treasury guidance, code of practice, handling of monies and annual
reports............................................................................................................................... 7
8 Appeals ............................................................................................................................ 7
9 Fees ................................................................................................................................... 8
PART 3 — ENFORCEMENT OF DEBTS 8

10 Powers to enforce executions ........................................................................................ 8
11 Powers in respect of fixed penalties for road traffic offences ................................... 9
12 Creditors’ assistance orders........................................................................................... 9
13 Powers to enter, search and seize, etc ........................................................................ 10
14 Disposal orders ............................................................................................................. 10
15 Priority of debts............................................................................................................. 11
PART 4 — OFFENCES 11

16 Unlicensed debt collecting ........................................................................................... 11
17 Obstruction or impersonation of licensed debt collector ........................................ 11
18 Penalties and supplementary provisions .................................................................. 11
PART 5 — CLOSING PROVISIONS 12

19 Transfer of functions .................................................................................................... 12
20 Tynwald procedure ...................................................................................................... 12
21 Transitional provision .................................................................................................. 12
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22 Amendment of Landlord and Tenant Act 1954 ....................................................... 12
23 Amendment of Money Lenders Act 1991 ................................................................. 12
24 Amendment of High Court Act 1991 ........................................................................ 12
25 Amendment of Protection from Harassment Act 2000 ........................................... 13

Debt Recovery and Enforcement Act 2012 Section 1


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DEBT RECOVERY AND ENFORCEMENT ACT 2012

Signed in Tynwald: 12 July 2011
Received Royal Assent: 9 February 2012
Announced to Tynwald: 21 February 2012
AN ACT
to provide for the licensing of debt collectors; to provide certain
powers in respect of the recovery of debts; and for connected purposes.
BE IT ENACTED
by the Queen’s Most Excellent Majesty, by and with the advice and
consent of the Council and Keys in Tynwald assembled, and by the authority of the
same, as follows:—
PART 1 – INTRODUCTORY

1 Short title

The short title of this Act is the Debt Recovery and Enforcement Act 2012.
2 Commencement

(1) This Act, other than section 1 and this section, comes into operation on
such day or days as the Treasury may by order appoint.
(2) An order under subsection (1) may contain such consequential,
supplementary, incidental and transitional provisions as the Treasury
considers appropriate.
3 Interpretation

(1) In this Act ―
“debt collecting services
” means the taking of steps, on behalf of a creditor, to
procure the payment of a debt due to the creditor;
“Judicial Officer
” has the same meaning as in section 3C of the High Court Act
1991;
“licence
” means a licence granted in accordance with Part 2;
“licensed debt collector
” means a person to whom a licence has been granted.
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(2) The following terms have the same meaning as in section 26(1) the
Administration of Justice Act 1981 [c.8] ―
(a) execution;
(b) execution debtor;
(c) execution order.
PART 2 — LICENSED DEBT COLLECTORS

4 Requirement for a licence

(1) A person carrying on debt collecting services must hold a licence granted
in accordance with this Part.
(2) However, no licence is required if the person ―
(a) is acting in the normal course of business as either a Coroner or
lockman, or as an advocate; or
(b) is the creditor or an employee or relative of the creditor.
(3) In this section —
“employee” in the case of a body corporate, includes an officer or member of the
body corporate;
“relative” means husband, wife, civil partner, brother, sister, ancestor or lineal
descendant.
5 Application for a licence

(1) An application for a licence must be made to the Chief Registrar and be
in such form as the Chief Registrar may require.
(2) The application must be accompanied by such documents and
information as the Chief Registrar may require together with such fee as
the Treasury may publish.
6 Grant or refusal of a licence

(1) The Chief Registrar must not issue a licence unless he or she is satisfied
that the applicant ―
(a) is a fit and proper person to carry on debt collecting services; and
(b) has an adequate level of insurance cover in respect of the range of
debt collecting services offered by him or her.
(2) If the licence is granted the Chief Registrar may impose such conditions
as he or she considers reasonable in the particular circumstances.
(3) If the licence is refused or if any conditions are imposed the Chief
Registrar must give the applicant an opportunity to be heard and, when
so requested by the applicant, must give reasons for the decision.
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(4) The Chief Registrar, having given the licensed debt collector an
opportunity to be heard, may at any time ―
(a) make a licence subject to conditions or, as the case requires,
further conditions;
(b) suspend a licence;
(c) revoke a licence; or
(d) vary any condition to which a licence is subject,
and must give reasons for the decision.
(5) Where the Chief Registrar suspends a licence under subsection (4)(b), he
or she must review the suspension at intervals of not less than 6 months
and once the licence has been suspended for 2 years it is treated as being
revoked.
7 Treasury guidance, code of practice, handling of monies and annual

reports

(1) In discharging his or her functions under this Act the Chief Registrar
must have regard to such guidance as the Treasury may publish as to the
criteria to be applied in granting, suspending or revoking a licence, or
imposing or varying the conditions of a licence.
(2) The Treasury must publish a code of practice with respect to the conduct
of licensed debt collectors and such code must be taken into account —
(a) by the Chief Registrar in deciding whether to suspend or revoke a
licence, or vary its conditions;
(b) by a Judicial Officer in deciding whether or not to grant an
application under section 12 or section 13.
(3) The Treasury must make regulations about the retention and handling of
monies received by licensed debt collectors and may provide for any
breach of the regulations to be an offence punishable on summary
conviction by a fine not exceeding £5,000.
(4) The Chief Registrar shall each year publish a report on the enforcement
of judgments by licensed debt collectors to be laid before Tynwald, and
may require information to be provided by licensed debt collectors for
the purposes of the report.
8 Appeals

A person aggrieved by a decision of the Chief Registrar under this Act may
appeal to the Financial Services Tribunal as if the decision were a decision
mentioned in section 32(3) of the Financial Services Act 2008.
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9 Fees

(1) The Treasury must publish the maximum fees that licensed debt
collectors may charge in respect of debt collecting services in the
following categories ―
(a) a fee payable by the creditor on engaging the licensed debt
collector;
(b) a fee payable in connection with such services on the part of the
licensed debt collector as may be specified;
(c) a fee based on such percentage of the debt to be recovered;
(d) an overall maximum fee that may be charged.
(2) The published maximum fees may provide for different maxima in
different circumstances or cases.
(3) Licensed debt collectors may charge fees in any or all of the categories
mentioned in subsection (1) and may provide for fees in any category to
be alternative to fees in any other category depending on the
circumstances.
PART 3 — ENFORCEMENT OF DEBTS

10 Powers to enforce executions

(1) A licensed debt collector has the power to enforce an execution, or any
warrant expressed to be enforceable in the same manner as an execution,
in accordance with this Act and to recover from the execution debtor —
(a) all sums due (including interest) and payable under the execution
order;
(b) any further interest that a Coroner may have levied by virtue of
section 9(5) of the Administration of Justice Act 1981;
(c) all fees which the licensed debt collector is entitled to charge by
virtue of section 9 in connection with the enforcement together
with any expenses reasonably incurred;
(d) any costs charged by virtue of regulations made under section
14(2) (costs on disposal).
(2) However, an execution debtor may, within 7 days of the order for
execution, apply to the Chief Registrar for an order that the debt may be
paid by instalments and where the Chief Registrar makes such an order
and the execution debtor makes payments as required by the order, this
Part shall not apply in respect of that debt.
(3) The Treasury may, by regulations, make additional provision about the
enforcement of executions by licensed debt collectors.
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11 Powers in respect of fixed penalties for road traffic offences

The Treasury may, by regulations, provide for licensed debt collectors to
enforce a sum payable in default which has been certified under paragraph 10
of Schedule 5A (fixed penalties) to the Road Traffic Regulation Act 1985 for
enforcement against a defaulter.
12 Creditors’ assistance orders

(1) A Coroner or licensed debt collector may apply to a Judicial Officer for
an order under this section (to be known as a “creditors’ assistance

order
”) for the purposes of ―
(a) obtaining information from a body specified in the application as
to the whereabouts of an execution debtor;
(b) discovering, seizing and retaining the property which a deposit-
taking institution specified in the application holds on behalf of an
execution debtor.
(2) An application for a creditors’ assistance order must be supported by an
affidavit setting out the grounds for the application.
(3) A creditors’ assistance order may require ―
(a) the body concerned to disclose the last known address of the
execution debtor;
(b) the deposit-taking institution concerned to disclose the property
which the deposit-taking institution holds on behalf of an
execution debtor and to produce all or some of that property to
the Coroner or licensed debt collector.
(4) The property produced by virtue of a creditors’ assistance order must be
the lowest amount the value of which, in the opinion of the deposit-
taking institution, meets the total amount recoverable from the execution
debtor.
(5) Before granting a creditors’ assistance order, the Judicial Officer must be
satisfied that the interests of justice in granting the order significantly
outweigh any detriment that the execution debtor may suffer as a result
of it.
(6) A creditors’ assistance order must not authorise the seizure and retention
of items subject to legal professional privilege.
(7) In this section “deposit-taking institution” means any person carrying on
a business which is a deposit-taking business under the Financial Services
Act 2008 and includes a building society established under the Industrial
and Building Societies Act 1892 and a United Kingdom building society
which is licensed to accept deposits under the Financial Services Act 2008.
(8) This section does not limit the powers of a Coroner under any other
enactment.
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13 Powers to enter, search and seize, etc

(1) A licensed debt collector may apply to a Judicial Officer for the issue of a
warrant under this section for the purposes of enforcing an execution
order.
(2) An application for a warrant under this section must be supported by an
affidavit setting out the grounds for the application.
(3) A warrant under this section may authorise the licensed debt collector at
any reasonable hour ―
(a) to enter such premises as are specified in the warrant, using, if
necessary, reasonable force;
(b) to search those premises for property belonging to the execution
debtor; and
(c) to seize and retain any property belonging to the execution
debtor.
(4) The property seized and retained by virtue of a warrant under this
section must be the lowest amount the value of which, in the opinion of
the licensed debt collector, meets the total amount recoverable from the
execution debtor.
(5) Before issuing a warrant under this section, the Judicial Officer must be
satisfied that the interests of justice in issuing it significantly outweigh
any detriment that the execution debtor may suffer as a result of it.
(6) A warrant under this section must not authorise the seizure and
retention of items subject to legal professional privilege.
(7) No property mentioned in paragraph 2 of Schedule 1 to the
Administration of Justice Act 1981 may be seized and retained by virtue of
a warrant under this section.
14 Disposal orders

(1) Where —
(a) a deposit-taking institution has produced property to a licensed
debt collector under section 12(3)(b); or
(b) a licensed debt collector has seized and retained property by
virtue of a warrant issued under section 13,
the licensed debt collector may apply to a Judicial Officer for an order (to
be known as a “disposal order
”) to enable him or her to dispose of the
property in full or part satisfaction of the amount recoverable from the
execution debtor.
(2) The Treasury must make regulations providing for the method by which
property which is the subject of a disposal order may be disposed of, for
an independent valuation of the property to be provided in appropriate
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circumstances and for the costs that may be charged in respect of the
disposal to be prescribed in or in accordance with the regulations.
(3) The balance of any monies after payment of debts and any charges
authorised by this Act is the property of the execution debtor.
15 Priority of debts

The Judgments Register established and maintained by the Chief Registrar
under section 15 of the Administration of Justice Act 1981 must, where
appropriate, indicate the priority of debts in accordance with the Debtors Act
1820 and the Preferential Payments Act 1908.
PART 4 — OFFENCES

16 Unlicensed debt collecting

A person who carries on debt collecting services in contravention of section 4 is
guilty of an offence.
17 Obstruction or impersonation of licensed debt collector

A person who ―
(a) wilfully obstructs or impedes a licensed debt collector in the
performance of his or her duties; or
(b) with the intent to deceive, impersonates a licensed debt collector,
is guilty of an offence.
18 Penalties and supplementary provisions

(1) A person who commits an offence under this Act is liable ―
(a) on conviction on information, to custody for not more than 2
years, a fine, or both;
(b) on summary conviction, to custody for not more than 6 months, a
fine not exceeding £5,000, or both.
(2) If an offence under this Act committed by a body corporate is proved to
have been committed with the consent or connivance of, or to be
attributable to neglect on the part of, a director, manager, secretary or
other similar officer of the body corporate or a person who was
purporting to act in such a capacity, that person, as well as the body
corporate, is guilty of the offence and liable to be proceeded against and
punished accordingly.
(3) If the affairs of a body corporate are managed by its members, subsection
(2) applies in relation to the acts and defaults of a member in connection
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with his or her functions of management as if that person were a director
of the body corporate.
PART 5 — CLOSING PROVISIONS

19 Transfer of functions

(1) Schedule 2 to the Government Departments Act 1987 applies to the
functions of the Chief Registrar under this Act as it applies to a
Department, so as to enable the transfer of those functions to any
Department, Statutory Board or other person or body as an order made
under that Schedule may specify.
(2) Accordingly, references in that Schedule to a Department shall be
construed as including a reference to such a person or body.
20 Tynwald procedure

Regulations made under this Act must be laid before Tynwald.
21 Transitional provision

Any person carrying on debt collecting services on the commencement of
section 16 are treated as holding a licence for 12 months from the date of such
commencement (subject to section 6(4)).
22 Amendment of Landlord and Tenant Act 1954

After section 16 of the Landlord and Tenant Act 1954 insert —
«16A Supplementary power of High Court

When making an order for the recovery of possession of any property the
High Court may, if it thinks fit, provide that the order shall be enforced
by a licensed debt collector within the meaning of section 3 of the Debt
Recovery and Enforcement Act 2012.».
23 Amendment of Money Lenders Act 1991

Section 7(3) of the Money Lenders Act 1991 is repealed.
24 Amendment of High Court Act 1991

After section 46(4) of the High Court Act 1991 add ―
« (5) This section does not limit the power of a licensed debt collector
within the meaning of the Debt Recovery and Enforcement Act 2012,
when enforcing an execution, to seize and retain money which is
due to the execution debtor.».
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25 Amendment of Protection from Harassment Act 2000

After section 1(3) of the Protection from Harassment Act 2000 add ―
« (4) Where the person pursuing the course of conduct is a Coroner or
a licensed debt collector within the meaning of the Debt Recovery
and Enforcement Act 2012 and the person is taking reasonable steps
to recover a debt on behalf of a creditor, the course of conduct
shall be presumed to be reasonable.».
Printed (by Authority) by the Isle of Man Post Office
No. 567009