Credit card group MBNA has been ordered to improve the way it deals with customers struggling to keep up with their debt.
The Office of Fair Trading has imposed a series of requirements on the lender after Citizens Advice raised concerns about the way its in-house debt collection arm was handling customers in financial difficulties.
The trading watchdog found when people who could not afford to make their full repayments offered to pay a token sum, the letters MBNA sent to them were so unclear, consumers often could not tell if their offer had been rejected or accepted.
It also failed to follow its own policy on some occasions, by bypassing customers' appointed representatives, and instead contacting individuals directly.
As a result of the investigation, from January 1 MBNA must make it clearer in letters sent to customers who are in financial difficulties that it will accept partial repayments if they have shown this is what they can afford.
It must also stick to its policy of only contacting customers who have an appointed representative to act on their behalf if the customer or representative has given permission for this, or if they have confirmed that the representative no longer acts for the customer.
The group may also contact customers directly if an expected payment has not been made, or it has been unable to get in touch with the representative, despite making reasonable efforts.
It can continue to send statements of account or other communications to customers in line with its statutory obligations.
The OFT added MBNA had co-operated fully during the investigation and was in the process of addressing the issues.
If the group breaches any of the requirements it can be fined up to £50,000 and even have its consumer credit licence revoked.