Full and Final with Cabot

[danmav]

My girlfriend had a Barclaycard with a credit limit of £500 which she defaulted on. Her credit report shows that the default occurred on 06/05/04 and that the debt is now with Kings Hill (or is it Cabot?).

We phoned Kingshill/Cabot today and they said the balance is now £888 and that they bought the debt on 27/05/05. I said to them that this amount is challengable because it undoubtedly includes default charges added by Barclaycard. They said that they havent added any charges and are only adding interest. I queried this as I thought only the original creditor could add interest but the person I spoke to said that Kingshill/Cabot are allowed to add interest and this is contained in the original contract. Is this correct?

They have said that we can write to them to find out what charges have been added and we plan to do this.

My girlfriend wants to make a full and final settlement on the debt as she doesnt dispute she owes it. and wants to clear the debt on her credit report. However she doesnt want to pay anywhere near the £800 Kingshill/Cabot said they wanted, especially as the original credit limit was £500.

We would be grateful for any thoughts with how we should proceed on this one and also what content we should put in our initial letter to Kingshill/Cabot.

[Seahorse]

First thing is to put this in dispute to stop Cabot adding any more to it. Get a CCA off to them ASAP, ensuring you have in there somewhere, "I do not acknowledge any debt to you."

Remember to send them £1 as their statutory fee, and also impress on them that the fee is ONLY to be used in respect of the request, in case they try their usual "thanks for your initial payment" nonsense.

It looks like the extra might also be made up of unlawful charges that Barclaycard may have applied to the account. So it is important to Subject Access Request Barclaycard (with your £10 fee) to get an idea of what you might be entitled to claim back from them, if anything.

Once you know where you stand, you'll be in a better negotiating position, and will be able to offer to start paying Cabot based on the correct amount.

Take it from there, and do keep us up to date. And welcome to the Club.

[basil010]

Hi, very interesting situation.
Firtsly has your girlfriend received a Notice of Assignment regarding the debt?
Secondley, there is no such thing as full and final settlement under english law unless it has been agreed in writing prior to payment. Don't make the mistake of sending money in F & F and expecting it to end there, they will be able to come after the balance, all they have to do is inform you that it is not accepted in F & F and is a part payment.
However there is some good news.
1).If the money was paid by way of a cheque from a "Third Party" in F & F then they are obliged to accept it as such if the cheque is cashed.
2). You can also send a cheque for F & F on the basis that the £550.00 is agreed but that the aditional costs are disputed. You would then need to include another sum on the cheque as well as the £550.00 which relates to the disputed amount.
I would siggest that a covering letter using similar format to this statement be used.
I admit the sum of £550.00 being owed to you but dispute the remiander of the claimed debt. I therefore enclosed a cheque to the value of £555.00 in Full & Final Settlement of this claim, (hopefully they will think that it is merely a mistake). This should also be written on the back of the cheque and an instruction given to the Bank to return the cheque to you upon clearance.
If they then encash the cheque at £555.00 they have technically eccepted the additional £5.00 as settlement to the balance and will not be successful if they try and claim the rest of the balance.

[pmhcfc]

Originally Posted by basil010

If they then encash the cheque at £555.00 they have technically eccepted the additional £5.00 as settlement to the balance and will not be successful if they try and claim the rest of the balance.

How does this work then ?

[Seahorse]

But why bother sending ANY settlement until there is evidence that this is the amount owed? There is nothing yet to suggest that the amount claimed is actually owed, until such time as Barclaycard can come up with statements showing what was charged on the account in the first place.

If, for sake of argument, £250 of the original £500 is made up of unfair penalties, then clearly there was never £500 owed in the first place, and it might be argued, would never have resulted in a default in that case.

I'd wait until Barclaycard come up with something concrete.

[basil010]

In essence if they cash the cheque they have acepted the extra amount in settlement of the balance as you have stated that it is a disputed amount. They will argue the toss but I do not know of a Court that would uphold any action after acceptance of the money on these terms.
As I stated before about 3rd party cheques if you send the payment from a 3rd party as well, they are in even more difficulties.

Originally Posted by pmhcfc

How does this work then ?

[debt_mountain]

Originally Posted by basil010

Hi, very interesting situation.
Firtsly has your girlfriend received a Notice of Assignment regarding the debt?
Secondley, there is no such thing as full and final settlement under english law unless it has been agreed in writing prior to payment. Don't make the mistake of sending money in F & F and expecting it to end there, they will be able to come after the balance, all they have to do is inform you that it is not accepted in F & F and is a part payment.
However there is some good news.
1).If the money was paid by way of a cheque from a "Third Party" in F & F then they are obliged to accept it as such if the cheque is cashed.
2). You can also send a cheque for F & F on the basis that the £550.00 is agreed but that the aditional costs are disputed. You would then need to include another sum on the cheque as well as the £550.00 which relates to the disputed amount.
I would siggest that a covering letter using similar format to this statement be used.
I admit the sum of £550.00 being owed to you but dispute the remiander of the claimed debt. I therefore enclosed a cheque to the value of £555.00 in Full & Final Settlement of this claim, (hopefully they will think that it is merely a mistake). This should also be written on the back of the cheque and an instruction given to the Bank to return the cheque to you upon clearance.
If they then encash the cheque at £555.00 they have technically eccepted the additional £5.00 as settlement to the balance and will not be successful if they try and claim the rest of the balance.

I agree with this idea but I think if it is not clearly worded in a covering letter that the encashment of this cheque is full and final settlement I think they would be able to justify chasing the rest to a judge.

But if like the Clydesdale Bank you include this line encashment of this cheque is full and final settlement in your letter with the cheque then it does stand up in a court , Clydesdale are winning these arguements all over the place. they send a cheque for 50% of the charges requested with that line in the letter and when they are in court for the other 50% they produce the letter and the judge agrees that the encashment ends the claim.

Might be wortha try if someone is willing to pay cabot as the £500 would still be a significant profit to them and they may see the £££££ signs and just cash it anyway.

nice idea worth thinking about it.

[danmav]

Thanks for your comments so far.

The CCA request is being posted today (should it be recorded delivery?) and we are still trying to trace the original account details for Barclaycard as Cabot did not have them, or just didnt want to give them to us!

As for the settlement I have to agree with Seahorse. We wont be sending any payment, or even discussing a payment, until we have confirmed exactly how much is owed. At the time when we are ready to negotiate a final settlement I will be demanding that Cabot write to us first confirming they accept the agreed amount (whatevet it may be) in full and final settlement of the debt, and also that they agree to mark the debt as satisfied on my girlfriend's credit report. Only when this letter is received will we make payment.

By reading the other threads on CAG I reckon there is a good chance that Cabot wont be able to respond to the CCA request either in time or with the required information. If this happens we are in a much stronger position to negotiate a lower full and final settlement. So lets see what happens!

[danmav]

Forgot to say that my girlfriend has never received anything from Cabot, including a Notice of Assignment. However she has moved house a few times over the last few years so it may have been sent at some point. We have requested a copy of this in the CCA request letter we are sending.

[pmhcfc]

Originally Posted by danmav

Forgot to say that my girlfriend has never received anything from Cabot, including a Notice of Assignment. However she has moved house a few times over the last few years so it may have been sent at some point. We have requested a copy of this in the CCA request letter we are sending.

Yes, the cca should be sent recorded.

[basil010]

As stated before there is no rule of English Law that allows for settlement of a debt at a lower value than that claimed when that value as been oferred in F & F settlement if it has not been agreed in advance. This is an American rule not English Law.
Should you want the bibliography it is Stour Valley Builders (a firm) v Stuart and Another.
Lord Justice Lloyd stated that Day v McLea (1889) 22 QB 610 was binding authority against the application of such a rule. The Court held that the keeping of the cheque was not a matter of Law conclusive and it was a question of fact as to on what terms the cheque was kept.

Originally Posted by debt_mountain

I agree with this idea but I think if it is not clearly worded in a covering letter that the encashment of this cheque is full and final settlement I think they would be able to justify chasing the rest to a judge.

But if like the Clydesdale Bank you include this line encashment of this cheque is full and final settlement in your letter with the cheque then it does stand up in a court , Clydesdale are winning these arguements all over the place. they send a cheque for 50% of the charges requested with that line in the letter and when they are in court for the other 50% they produce the letter and the judge agrees that the encashment ends the claim.

Might be wortha try if someone is willing to pay cabot as the £500 would still be a significant profit to them and they may see the £££££ signs and just cash it anyway.

nice idea worth thinking about it.

[Seahorse]

If Cabot can't come up with any idea of your original Barclaycard account details, how the hell would they expect to show that a debt exists in the first place? They could hardly go to Mr Judge and just say, sorry your honour, I KNOW we haven't a clue what account it is we're chasing, but we do promise you we know this amount is correct. Honest. Really, it is. We're not making this up off the top of our head.

So. If they DO have your account details, it'll be in amongst your personal details. Which you can Subject Access Request with a tenner and request as is your right under the Data Protection Act.

[danmav]

We have had a response from Cabot to the CCA request and big surprise :o its like the standard letter they have sent to most people. The main bits are;

Cabot Financial (UK) Ltd, formerly Kings Hill (No.1) Ltd, which is part of the Cabot Financial group of companies, purchased your account from Barclaycard and therefore Cabot Financial (UK) Ltd is the legal owner.

The rights but not the duties were assigned to Cabot Financial (UK) Ltd in dealing with your account and therefore we are legally entitled to collect.

We will assist you in providing a copy of the agreement and statement of account but please note that we are not obliged to, as we are not the creditor. It really has amazed now we have received the letter that they think they can pick and choose what parts of the Consumer Credit Act to adhere to. Surely we could just say to them we are not obliged to pay you anything cause you are not the creditor!

We will also arrange for a copy of the Notice of Assignment to be forwarded to you. This letter constitutes written notice of the assignment under Section 25 of the Law of Property Act and therefore we have no need to provide a copy of the assignment deed itself. Sounds like crap to me and have they contradicted themselves by saying they will supply a copy and then saying they have no need to provide a copy of the assignment deed itself?

We have contacted Barclaycard concerning the above and although we anticipate a reply within the next 21 days, it can take up to 8 weeks if the information we require has been archived, and we therefore request your understanding in this matter. No chance whatsoever of us being understanding in this matter, cant wait to go full steam ahead with complaints etc!

Ok peeps what do you think should be our next action. Should I write back saying I think they are talking crap and they do have duty under the Consumer Credit Act or should I wait for the month to expire and have them commit an offence?

Also we are really keen to get this debt sorted on my girlfriend's credit report as we will be getting a mortgage soon. Anyone got any thoughts on how we could try and get it removed now?

[Seahorse]

Yup. Just wait and let them hang themselves. No point in tipping them off that you are a member of the Fan Club. And as their letter is the normal template, thay can hardly identify you on here from that.

Have you contacted the original creditor yet to Subject Access Request them for ststements? You've a far better chance of knowing where you stand then, and could conceivably end up being owed at least some of that cash back.

[danmav]

Yeah the Subject Access Request is gone and awaiting a reply.

When Cabot responded they also sent a short statement of the account. They took the debt over when the balance was £730 and the original credit limit was £500 so I reckon there is going to be a fairly large amount of charges which can be claimed back.

The other thing I cant get my head around is how Cabot can charge interest, which they have. Surely for them to charge interest another credit agreement would need to be signed. Even if thats not the case they are happy to charge interest but not accept any duties under the Consumer Credit Act, bizarre!

I am normally a patient person but I cant wait for the month to expire!

[Seahorse]

Ah, the old interest without an agreement ploy. Cheeky beggers.

Methinks you will be another one kicking Cabot's virtual backside.