How to deal with Lantern Debt Collectors

If Lantern debt collectors are chasing you for debt, the first thing to know is that you’re not alone and there are lots of things you can do to get debt free for good.

Debt has a way of making us feel really isolated, but there’s nothing to be ashamed of or worried about. Debt collectors never have as much power as they think, and there are lots of rules and procedures to protect you as the borrower.

In this article, we’re going to explore exactly how to deal with Lantern debt collectors, and how you can pay off your debt in a way that suits your circumstances, not a debt collector’s desire for profit.

We’ll also look at what to do if you’re being chased for a debt that isn’t yours, and whether your situation means that you don’t have to pay off the debt at all.

How can I deal with Lantern debt collectors?

You can deal with Lantern debt collectors by knowing what your rights are against them and reporting them if they breach rules, finding out if you actually owe the debt in the first place, and working a way to repay your debts that works for you.

You can also take the appropriate steps to stop Lantern debt collectors taking you to court over a debt, find an insolvency solution such as an Individual Voluntary Arrangement (IVA) or Debt Management Plan (DRO) to help you write off your debt if it’s appropriate, and contact a debt charity for free debt support.

Let’s dive right in, and look at how to deal with Lantern debt collectors, so you can start your journey towards a debt-free life.

Who are Lantern Debt Recovery?

Lantern Debt Recovery are a debt collection agency. This means that they collect debts on behalf of the company you originally owed them to. Lantern also buy ‘bad debts’ (debts which are seriously past due), from companies.

For example, if you owed Vodafone £800 in unpaid phone bills, Lantern might offer to buy the debt from them at 20% (£160). This way, Vodafone recovers at least some of the debt, and Lantern get to chase you for the full amount, hopefully making a profit.

The idea of debt collectors can be anxiety-inducing, but it’s important to know that debt collectors don’t have any special legal powers, and don’t have any more rights than your original creditor.

They can’t enter your home without permission, remove goods (debt collectors are not bailiffs) or send you to prison. However, debt collectors can eventually take you to court as a last resort (see our section ‘Can Lantern take me to court?’).

Lantern Debt Recovery (who go by the trading name Lantern) are based in Leeds, and are regulated by the Financial Conduct Authority (FCA). This means they have to follow certain rules to respect your privacy and wellbeing when attempting to collect your debt, and if they breach these rules, you can report them to the Financial Ombudsman. Previously, Lantern Debt Recovery was called Motormile Finance.

Lantern emphasises an empathetic approach to debt recovery, and claims to “put their customers in control” that that they “choose to treat you the way we would want to be treated”.

Don’t forget that Lantern are a debt collection company though, and their aim will be to recover the debt from you. It’s important to know your rights against debt collection agencies and seek free, independent debt advice from charities like StepChange and National Debtline before you agree to any debt repayment plan.

Who do Lantern collect for?

Lantern collects debts for a variety of well-known organisations and brands, including O2, EE and Virgin Media. Lantern also collects debts associated with payday loans, Council Tax payments, defaulted court fines, catalogues and parking tickets. It is also worth noting that Lantern operates on behalf of HMRC collecting a variety of debts including overpayments of tax credits and unpaid tax bills.

In many cases, Lantern will have bought defaulted debts from these companies and organisations at a fraction of their true worth, and are now chasing you for the full amount.

Why are Lantern debt collectors contacting me?

If Lantern debt collectors are contacting you. it will be because you owe a debt to a company they’re working on behalf of, or they’ve bought a defaulted debt (one that you haven’t paid) from a company you owe money to.

Sometimes, debt collectors can make a mistake and contact you for a debt that isn’t yours, perhaps because you live at the same address as the original debtor, or have a similar name. This is called a ‘mis-trace’.

What if Lantern are chasing me for a debt that isn’t mine?

If Lantern are chasing you for a debt that you are sure isn’t yours, you can send a letter to the debt collection company asking them to prove it.

Sometimes, if debt collection doesn’t start until several years after you first defaulted on a debt or you have several debts, you may have forgotten what you owe. Or, the debt collection company have indeed made a mistake, and you don’t owe the debt. Either way, sending a ‘prove it’ letter will get you the evidence you need to either disprove the fact that you owe the debt, or remind you that you do in fact owe it.

You shouldn’t always send a ‘prove it’ letter. For example, if the letter is addressed to someone else but with your address, you don’t need to do anything, as you’re clearly not the recipient of the debt collection demands. Also, if you have reason to believe that your debt is ‘statute barred’, which means that it is older than six years, it may not be enforceable and you won’t have to pay it. In this case, seek independent debt advice, and don’t contact the debt collection company.

A ‘prove it’ letter can just be a simple response to a debt collector’s contact. Make sure that you neither deny nor confirm the debt, simply ask them for proof that the debt is yours. Remind the debt collection agency that, according to FCA rules, they can’t continue trying to collect the debt until they’ve proven it’s yours. The proof should is likely to come in the following forms:

  • Original credit application or Loan Agreement
  • Copy of default notice
  • Copy of the chain of communication around the debt, for example, how many times it has been sold on from the original creditor and to whom.

These documents should be enough to either show that you’re not the person who owes the debt, or remind you that you are.

Is my debt actually enforceable?

Did you know that if your debt is over six years old, you may not have to pay it? If your debt is older than six years, it is known as a ‘statue barred’ debt, and it means that, although the debt will still exist, a debt collector can’t take you to court over it. Debt collectors can still technically contact you about the debt, but if there’s nothing they can do to actually enforce it, it would be a waste of money for them to do so.

Be careful, though. The law says that your creditor has six years after they send a default notice (which proves that they have reason to take action on a debt) to take you to court over it. If, in six years, your creditor hasn’t done anything about it, the debt is not enforceable. However, if your creditor never sent you a default notice, it doesn’t matter if the debt is six years old or more, you can still be taken to court over it, as they could send you the default notice whenever they want.

Also, the six years is only relevant if it’s been six years since you made any payment for or acknowledgement of the debt. Think about it like a timer lasting for six years that resets every time you make a payment on your debt.

If you signed a Consumer Credit Agreement (CCA) when taking out the debt and the debt collection company can’t produce the original document, your debt is much less likely to be enforceable in court. Be careful though, as the lack of a CCA will usually only be relevant if your debt has been sold on to a debt collector, not if the original creditor is taking you to court.

How can I pay off my debt with Lantern?

Lantern list a number of ways that you can repay your debt on their website. They offer the chance to set up a regular payment plan, make a one-off payment or make a ‘settlement offer’, which is where you settle your debt at a lower price than its original amount.

Before you make any repayments to Lantern, it’s a good idea to seek free, expert debt advice. Talk to a debt charity like StepChange or Christians Against Poverty, and see what your options are. You can also contact us for free at IVA Advice, and we’ll do our best to communicate with Lantern or any of your other creditors on your behalf.

You can get free debt management plans through charities like Christians Against Poverty. The charity will negotiate with your creditors and likely get extra interest and charges frozen on your account, so you can pay your debt off at a more manageable pace. Alternatively, if you have a lot of debt to repay, you can look into getting an IVA or DRO organised, which will write off at least some of your debt, and allow you to pay

Should I arrange a debt settlement with Lantern?

Be careful about choosing a debt settlement. As Lantern themselves say, a smaller repayment of the original debt will only go down on your credit file as ‘partially satisfied’. This can affect your credit score and your ability to take out important loans, like mortgages. However, if you’ve already defaulted on lots of loans, it is likely that your credit score isn’t great, anyway. Most debt solutions do affect your credit score, but they will all fall off your record after six years, so it’s up to you to decide what is best for you.

What if I don’t have the money to repay my debt?

There are some situations where your debt is just too big to reasonably repay, or there is no way you can repay your debt without falling into financial hardship and struggling to afford your basic necessities. The UK government offers insolvency solutions, which help you write off (cancel) your debt when you’re in a state of financial distress. These include

Individual Voluntary Arrangement (IVA)

An IVA is a government approved debt help scheme, which supports you if you are really struggling to pay your debt. An IVA is a legal agreement between you and your creditors, and it is managed by an Insolvency Practitioner. An IVA allows you to pay back a small percentage of your total debt, and get the rest of it cleared. At the end of the IVA (which runs for 5-6 years), no matter how much money you have left to pay back, the debt is written off, and the IVA will drop off your credit record after it is discharged (ended). You will make small, monthly payments towards your debt, based only on what you can afford. At IVA Advice, we offer free, expert advice on IVAs, so if you think an IVA might be the right solution, feel free to give us a call.

Debt Relief Order (DRO)

A Debt Relief Order (DRO) is available if you don’t own any valuable assets, for example, your own home, and you have less than £50 in disposable income. A DRO gives you legal protection against your creditors (they are no longer allowed to contact you about the debt) and writes off your debt after around 12 months. If you have a CCJ, it can be included in a DRO.

Bankruptcy

Going bankrupt should be a last resort. While bankruptcy does write off your debt, it has a serious effect on your life and credit rating. You can’t be the director of a limited company during your bankruptcy, so it can affect your career if you manage a business. and you may have trouble applying for permanent residency or a Visa. However, your bankruptcy will be removed from your credit file six years after it has ended. Bankruptcy will clear your debt after around 12 months, although you may have to sell assets to pay off your creditors. You should always seek free debt advice before deciding to go bankrupt.

How can I stop Lantern contacting me?

There are a few ways you can temporarily stop contact from Lantern, or change the way they contact you. These include:

  • Breathing space. You’re allowed to request a 30 day ‘breathing space’ from creditors and debt collectors, in which they legally can’t contact you. In May 2021, this will increase to 60 days, given the impact of Covid-19 on people’s finances and debt. If you’re receiving mental health crisis treatment, you can request a special mental health crisis breathing space, where your creditors are not allowed to contact you for the duration of your treatment, no matter how long this is.
  • A Debt and Mental Health Evidence Form (DMHEF). This is a form which helps creditors understand any mental health issues you may be experiencing, so that they can be more considerate of your personal circumstances when communicating with you.

These approaches won’t remove a creditor’s right to pursue the debt eventually. However, if you agree a plan with your creditors to repay your debt. even if it’s in small amounts every month, they are unlikely to keep chasing you.

If you decide that an IVA or DRO is answer for you, both these processes will legally stop your creditors from contacting you directly. With an IVA you’ll have an Insolvency Practitioner who will contact creditors on your behalf, and with a DRO your Official Receiver will communicate with creditors rather than you.

What are my rights against Lantern?

You have many rights when it comes to dealing with debt collectors, and there’s a long list of things that debt collectors are banned from doing in the UK. All debt collection companies are regulated by the Financial Conduct Authority (FCA), and if they break any of these rules, you can make a complaint to the Financial Ombudsman Service (OFS). If the OFS agrees that the debt collection company is in breach of regulations, they can order the company to refund you some or all of your debt (possibly just the interest, for example). There’s a long list of things that debt.

Debt collectors in the UK are not allowed to:

  • Call you at work, unless you’ve given them express permission to do so. Calling you at your place of employment, or contacting anyone at your workplace to tell them about your debts, is strictly against Office of Fair Trading (OFT) laws. Debt collectors are not allowed to make threats about things they know they’re banned from doing, so even threatening to talk to your boss or someone at your workplace means that they’re breaching laws and you should report them.
  • Contact you on social media. If debt collection companies contact you via any of your social media accounts (Facebook, Twitter, Instagram etc.), you should report them and keep proof of the communication, in order to make a complaint.
  • Contact you outside of 8am-9pm on working days, or at all on weekends and holidays.
  • Reveal the details of your debt to family members or friends. Debt collectors are not allowed to reveal details of your debts to your family or friends, or let them know that you’re struggling financially. They may do this to put psychological pressure on you to pay up. Any debt collector who does this is in breach of both the laws established by the OFT, and privacy laws. Debt collectors are not allowed to even imply that you have a debt or that they are a debt collector, although they’re allowed to ask your friends or family for your contact details.
  • Add additional costs onto the debt that weren’t in the debt repayment contract. Under UK debt collection regulations, debt collection agencies can only add 8% interest to the original debt. If any debt collector tries to add more than this to account, refuse to pay it. You can find out what the original amount of your debt was by asking the debt collector to send a copy of the credit agreement.
  • Make false allegations against you, or pretend that they have powers which they don’t. This could include, for example, pretending that they have the power to send you to prison (you can’t go to prison for being unable to pay most debts in the UK), or to send bailiffs to remove your possessions (they don’t).
  • Provide falsified documents or impersonate bailiffs or other authorities. Debt collectors who do this are committing fraud in an attempt to get you to pay up. Report them to the Financial Ombudsman straight away.
  • Operate in a way that is considered threatening or abusive. If a debt collector of bailiff physically or psychologically abuses or harasses you, they’re breaking the law. Visit the Citizens Advice Bureau’s ‘harassment by creditors’ page for further advice.
  • Enter your home without permission. Debt collectors are allowed to come to your door, but they don’t have the right to come in unless you give that permission.

See the full list of your rights against debt collectors and what debt collectors are not allowed to do, in the Financial Conduct Authority (FCA) handbook.

Can Lantern debt collectors enter my home without my permission?

Lantern debt collectors absolutely cannot enter your home without your permission. Sometimes debt collection companies will send agents directly to your door to discuss repayment of the debt. However, you’re under no obligation to let them in, or even open the door. If debt collectors try to force entry into your home, they are breaking the law.

Can Lantern send bailiffs, or remove goods from my home?

An important thing to know is that bailiffs can only ever be ordered by a court. So, Lantern alone cannot send bailiffs to your home. Bailiff action may eventually be ordered if you refuse to pay your debts over a very long period, but usually only after a lengthy court process and several opportunities for you to repay your debt in a manageable way.

As well as this, Lantern cannot remove goods from your home. They can’t threaten to send bailiffs (which they can’t do anyway, without court intervention), as this is against FCA rules, as well as the law.

Even if bailiffs do visit after a court order, they are not allowed to take essential household goods, tools you need for work and children’s toys and belongings.

Can Lantern take me to court?

If you keep ignoring Lantern, unfortunately they won’t just go away. They may end up taking you to court and getting a County Court Judgement (CCJ) order against you, which demands that you repay the debt. This will arrive in the form of a letter detailing:

  • how much you owe
  • how to pay (in full or in instalments)
  • the deadline for paying
  • who you have to pay

Will a CCJ affect my credit rating?

A CCJ will affect your credit rating significantly, as it stays on your file for six years, even if you pay it off. A CCJ is not a criminal judgement, and won’t go on a criminal record.

Can Lantern take money from my bank account?

Lantern can only take money from your bank account or wages if they apply to the court after a CCJ for:

  • An Attachment or Earnings. This is when the court orders your employer to deduct money straight from your salary to pay off your debts.
  • A Third Party Debt Order. This orders the person who holds your money (usually your bank) to pay it straight to the person you owe, i.e. the debt collection company. With a Third Party Debt Order, your creditor will apply to the court for the order first. This order tells your bank or building society to freeze your account. You’ll then get a form called an N349 Interim third party debt order which will inform you that the money in your account has been frozen. This order will also tell you to attend your local County Court hearing centre. Here, the judge will decide whether to make a Final Third Party Debt Order. If the judge does this, your bank or building society pays the creditor the frozen amount of money. If not, the money will be returned to you. Your bank is only allowed to freeze the amount of money in your account at the time of the Third Party Debt Order. Any money paid into your account after this cannot be frozen, and you can withdraw it.

How do I complain about Lantern?

If you feel like you’ve been treated unfairly by Lantern, you should contact them first. Lantern say that if you have any complaints or concerns, they will move quickly to put things right. The contact details for Lantern are:

  • Phone: 0113 887 6876
  • Email: complaints@lanternuk.com

You can also complain to:

  • Trading Standards, who will investigate whether your creditor or debt collector has committed an offence.
  • Financial Ombudsman Service (FOS). FOS will examine the situation and decide whether you’ve been treated unfairly. FOS can order the company to pay you compensation if appropriate, or cancel the interest on your debts.
  • Financial Conduct Authority (FCA). The FCA doesn’t take action on individual complaints, it will take information on creditors. The FCA has the power to suspend a firm for up to 12 months, withdraw a company’s authorisation, give the company a financial penalty, and publicising what the company has done wrong.

Now that we’ve gone through exactly how to deal with Lantern debt collectors and your rights against them, we hope you’ve found this a useful read. Remember that as soon as you take action of your debt, whether that’s through a debt management plan or arranging an IVA, you will feel so much more in control, and ready to enjoy the debt-free future you deserve.

Ethan Combes