How to Challenge Consumer Debt

Challenging consumer debt can be done, but it is not easy — it requires a clear plan, dedication, and the right education. Expect a short-term negative impact on your credit file while you take action; this is a possible and sometimes unavoidable consequence of disputing or defending a debt. Creditors will often chase payments, send repeated emails, make telephone contact, and may pass your account to a debt collection agency (DCA). Much of this activity is bluff and bluster: with the correct tools, evidence, and strategy you can respond calmly, protect your rights, and significantly improve your chances of a favourable outcome.

Freedom Financial provides impartial, educational guides, step-by-step templates, and practical checklists to help you build that plan and act responsibly. This information is educational only and does not constitute legal or financial advice.

Get Your Financial Affairs in Order

Before challenging any consumer debt, it’s essential to put your financial house in order. Take time to review your income, outgoings, and essential commitments so you have a clear picture of where you stand. This means creating an honest, up-to-date budget that shows what you can afford to maintain — and what may need to change.

Avoid taking on any new borrowing or credit during this stage, as it can weaken your position and affect your credit score further. Instead, focus on protecting your priority payments — such as mortgage, rent, council tax, and utility bills— to ensure your essential living costs remain secure while you plan your next steps.

Getting organised early gives you control and confidence. It helps you make informed decisions, understand what you can realistically manage, and prepare a solid foundation before engaging with any lender or debt collection agency.

 

Quick Start Guide

 

When dealing with consumer credit debts, the most effective approach is to slow the situation down, gather evidence, and challenge every part of the creditor’s claim using the rights provided under UK law. This guide summarises the first steps that place you back in control.

 

Step 1 - Request the Agreement (CCA Section 77/78/79)

A statutory request under the Consumer Credit Act 1974 forces the creditor or debt purchaser to supply:

  • A true copy of the executed agreement
  • Terms and conditions
  • Any document referred to in the agreement
  • A statement of account

If they do not provide this information within 12 working days, the agreement will be unenforceable unless and until they comply.

Important clarification:

A creditor may still issue a court claim, but they cannot obtain judgment or enforce the agreement until full compliance is achieved.

This buys you time and shifts the burden of proof onto them.

Step 2 - Submit a Data Subject Access Request (DSAR)

Under Article 15 UK GDPR and the Data Protection Act 2018, you can request:

  • Internal notes
  • Communications
  • Default Notice logs
  • Assignment records
  • Call recordings
  • System data
  • Credit file reporting logs

This exposes errors, contradictions, and missing documents, often critical to your defence.

 

Step 3 - Check Your Credit Files

Review Experian, Equifax, and TransUnion for:

  • Wrong default dates
  • Incorrect account status
  • Entries from companies that cannot prove ownership
  • Duplicate entries
  • Reporting during disputes (a breach of FCA CONC 13.1.6R)

Errors here often support disputes, ICO escalation, and CRA corrections later.

Step 4 - Build Your Evidence Folder

Create a simple bundle containing:

  • CCA response
  • DSAR response
  • All letters received
  • Default Notices
  • Assignment documents
  • Screenshot of credit files
  • Timeline of events

This becomes the foundation of your defence.

Step 5 - Begin Analysis (IRAC Method)

Use the IRAC method to break down each document:

  • Issue - What is wrong?
  • Rule- What law applies?
  • Application- How does the law apply here?
  • Conclusion- What does this mean for enforceability?

This is how lawyers analyse cases.

Step 6 - Pause Collection Activity (Where Applicable)

If disputes exist, the creditor or DCA must:

  • Suspend collection while investigating (FCA CONC rules)
  • Not mislead or pressure you
  • Not threaten unenforceable actions

You have the right to insist on fair treatment.

Step 7 - Prepare for Escalation

Depending on the outcome of your evidence review, you may escalate to:

  • ICO(data accuracy / GDPR breaches)
  • FOS(unfair treatment by regulated firms)
  • FCA(systemic compliance issues)
  • CRA(incorrect credit data)

Escalation is typically only needed where defects are serious and unresolved.