Enforcement Fee Fraud

TL;DR:

• If the Enforcement power, such as a Warrant, Writ, or Liability Order, contains an incorrect address for the debtor, no fees can be recovered. Such a warrant is considered a "defective instrument" and is not enforceable.
• Charging multiple Enforcement Stage fees for concurrently executed warrants is a breach of Regulation 11 of the Taking Control of Goods (Fees) Regulations 2014.
• Fee Fraud occurs when bailiff companies charge fees for services they do not intend to provide.
• Fee disputes can be resolved by applying for a fee assessment under Regulation 16 of the Taking Control of Goods (Fees) Regulations 2014 and Civil Procedure Rule 84.16. The Enforcement Agent may be held liable for the applicant's costs in such cases.
• Fee Fraud is a criminal offence under Sections 2 and 4 of the Fraud Act 2006.
• Victims can report these instances to Action Fraud, ensuring their complaints meet the police investigation criteria to avoid dismissal.

House of Lords Discussion on Fee Fraud

Fee Fraud is a criminal offence under Section 2 of the Fraud Act 2006, as confirmed during a House of Lords discussion on 20 April 2007. In this session, Lord Lucas asked whether a bailiff charging for uncompleted work constitutes fraud under the Fraud Act. Baroness Scotland of Asthal, representing the Government, affirmed that any bailiff dishonestly charging for unperformed work is committing an offence under Section 2, which criminalises false representation with the intent to gain or cause loss. Fraudulent trading may also fall under Section 9 of the Act. Investigations into such offences are the responsibility of the police, who consider available resources and case specifics. (Source: Hansard, 20 April 2007)

Enforcement of Traffic Contravention Debts

It is common for internet experts to advise motorists to remedy a Warrant of Control containing an outdated address by blaming the motorist for not updating their V5 with the DVLA and recommending they file a PE2 or TE9 with the Traffic Enforcement Centre. While this advice may be well-intended, it often leads to the Traffic Enforcement Centre re-issuing a fresh warrant using the new address provided on the TE9 or PE2 without notice. Consequently, bailiffs may attend the new address unexpectedly, without issuing a Notice of Enforcement.

It may not be prudent to complete a TE9 or PE2 until you verify the address on the warrant with the Traffic Enforcement Centre by providing the postcode listed on your V5 during their security check. If the old postcode is accepted, then the Warrant of Control is defective, and it is often advisable to leave it as it is. Any enforcement action under a defective warrant is invalid, and the motorist may be entitled to recover damages and costs.

Despite what internet experts may suggest, motorists are not statutorily obliged to file a PE2 or TE7. Correcting the warrant address is the creditor's responsibility, as outlined in CPR 75.7(7). This liability cannot be shifted onto the motorist. Some experts even recommend paying an online fixer to handle the TE9 and PE2 applications; however, customer complaints reveal that such fixers rarely achieve successful outcomes for motorists.

Examples of Fee Fraud

One common type of fee fraud is charging the statutory enforcement stage fee of £235 for an 'attendance' that never takes place. For example, a bailiff company may claim a statutory fee without ever having a bailiff physically visit the debtor's property. Another practice involves sending an uncertificated individual—a so-called "hit & run" visit—to the debtor's property and charging the attendance fee without attempting genuine enforcement duties.

Moreover, some companies charge a £110 fee for the 'sale or disposal stage' when no sale, transportation, or handling of goods has occurred. This misrepresentation falsely implies liability on the debtor. Another fraudulent tactic involves charging VAT on fees when the Enforcement Agent is not VAT registered, thereby unlawfully inflating the debtor's liability.

Some bailiff companies also charge the Compliance Stage fee of £75 without instructing an Enforcement Agent. Under the regulations, these prescribed fees are reserved solely for certificated Enforcement Agents. Section 63(6) of the Tribunals, Courts, and Enforcement Act 2007 stipulates that an Enforcement Agent must be a real person with a valid certificate, meaning that a limited company cannot position itself as an Enforcement Agent to access these fees. Such practices amount to fraudulent misrepresentation, resulting in unlawful charges against debtors.

Legal Analysis

Fee Fraud is strictly prohibited under Section 2 of the Fraud Act 2006, which criminalises dishonest conduct intended to result in financial gain. The UK Government affirmed the illegality of these practices during a House of Lords debate on 20 April 2007. Consequently, any instance of a bailiff levying upfront fees without actually performing the work constitutes a breach of this legislation.

Section 63(6) of the Tribunals, Courts, and Enforcement Act 2007 stipulates that an Enforcement Agent must be a real person with a valid certificate. Therefore, a limited company, such as a bailiff company, cannot act as an Enforcement Agent to access prescribed fees. Only certificated Enforcement Agents can levy these statutory fees.

Additionally, Regulation 16 of the Taking Control of Goods (Fees) Regulations 2014 provides a prescribed remedy, allowing individuals to apply to the court for an assessment of fees. This regulation offers a clear route for victims to challenge unlawful fees and ensure they are reviewed by the court.

Those who fall victim to fee fraud are entitled to report these actions to Action Fraud, the UK's central body for fraud reporting. It is important to structure complaints in a manner that aligns with police investigation criteria, ensuring they are taken seriously and considered for investigation. Otherwise, complaints risk being dismissed as a "Civil Matter."

Remedies Available

Fee disputes can be resolved by applying to the court for a fee assessment under Regulation 16 of the Taking Control of Goods (Fees) Regulations 2014 and Civil Procedure Rule 84.16. In such cases, the Enforcement Agent may be held liable for the applicant's costs.

Victims of fee fraud are entitled to file a complaint and seek restitution for improperly charged fees. Under Section 2 of the Fraud Act 2006, individuals can pursue damages against bailiff companies that engage in unlawful practices. Reporting fraudulent activities to Action Fraud may lead to enforcement action against the responsible parties, potentially resulting in criminal charges and financial penalties.

If you believe you have been a victim of fee fraud, please reach out for guidance. We can assist in assessing enforcement fees and charges to determine their validity and applicability to your situation. We will gather evidence and report the incident to ensure it is properly addressed. Contact us today for a free consultation for personalised support and to explore your legal options for pursuing compensation and holding those responsible accountable.