Collect-call shock: An unwelcome and expensive telephone intrusion may await borrowers who miss payments. Maria Scott reports

Peter Brown and his family were sitting down to their Sunday roast a few weeks ago when the telephone rang.

'It's about your pounds 20 debt,' said the woman on the other end of the line when Mr Brown picked up the telephone.

She was calling on behalf of NWS Bank, a finance house subsidiary of the Bank of Scotland. Mr Brown has a cheque account called Preference, operated by NWS. It works like a budget account, and he pays a monthly instalment of pounds 15 towards his borrowings by direct debit.

It emerged that this debit, due at the end of August, had not gone through because there was not enough money in his Girobank account.

He had warned the bank, he says, that there would be a shortfall, but did not expect any problems because a regular cheque was soon to be paid into the account and the bank would have been expecting this.

Another good reason for Mr Brown's unconcern as he sat down to lunch that Sunday was that he had received a statement from NWS a few days earlier purporting to show the pounds 15 instalment had been paid. So the call came as a shock.

The woman caller said his pounds 15 debt had grown to pounds 20 because there was a pounds 5 administration charge for the call. Worse was to come. Next day Mr Brown received a letter from NWS saying he owed pounds 25, pounds 15 for the original instalment plus pounds 10 for the phone call and letter.

Mr Brown complained. NWS agreed to waive the charges.

Tony Williams, assistant general manager of NWS, was unwilling to discuss Mr Brown's case with the Independent on Sunday, but confirmed it was the company's policy to telephone people for missed payments whatever the amount.

Mr Williams said NWS tried to ring at times it was most likely to find the customer at home, such as mornings, and lunch- times at weekends.

He did not think the company would be changing its procedures as a result of Mr Brown's complaint, but there might be some discussion with the staff making the phone calls about their approach to customers.

As in Mr Brown's case, the company would consider waiving administration charges if a customer showed the payment was missed as a result of an administration error.

He said a statement might be sent out showing that a payment had been received when it had not been, because the computerised statement system assumed direct debits would be paid.

NWS Bank is a member of the Finance and Leasing Association, a trade organisation representing finance houses, which has a code of practice. The rule on debt collection methods says that a member should 'ensure, by continuously examining debt collection procedures and those of any third parties it employs, that they conform to the highest ethical standards and allow for proper consideration of the consumer's circumstances'.

Many lenders, including some high street banks and building societies, now phone customers if payments are overdue.

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