Thread: Credit Card Question

If a company, in this case a credit card company, accepted a Full and final settlement to close an account could they then argue that any unlawful charges that are claimed must go toward the remainder of the outstanding balance?

In this instance I paid off a card that had over £700 owing with payment of around £350. The total charges during the time the account was open for were over £400 and I intend to charge them the contractual rate of interest for cash advances so my total claim against them is over £650.

However, the company settled for £350, so can they now claim the unpaid portion, which they wrote off at the time, must be paid back and I would only receive the balance of the £650 in unlawful charges?

I ask because having now received the statements, I notice that there is still apparently a balance on the account, even though it was paid and closed over 18 months ago.

The amount owing is nil, the interest charged is nil, the minimum payment is nil but the balance still reads over £300.

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Zootscot

We were in a similar position recenlty and settled five debts with the following letter.

Dear Sir

Ref Acc xxxxxxxxx

I am pleased to enclose the cheque in respect of the Full and final settlement on this account as discussed during our recent correspondence.

The offer was £xxx, we paid £xx after the offer was accepted therefore the balance due is £xxxx.

Cashing the cheque signifies your acceptance of this amount as the full and final settlement in respect of the outstanding balance on the account/s and you waive yours or the account holders right to seek the remaining balance at some time in the future.

If you have any questions please feel free to give me a call on xxxxxxxxxx.


Do you think this letter would negate our creditors rights to claim any outstanding amount against unlawful charges or do you think our letter deals with that issue?

Did you (hagen) send such a letter or similar?


Cheers for any help/comments.

Glenn

Edit Ive just signed into my Egg account online, even though the account should have been closed, both my Cc and loan account both show balances. However, the above letter was sent to DCL i think theyre called (eggs DCA) setting out the conditions for cashing the cheque, I suppose they never passed it on to Egg! Or if they did egg chose to make its own rules up, still I have plenty of copies for the judge should they wish to see it!

How can something be in "Full and final settlemet" if they intend to claim at some point in the future?

The amount I paid in "full and final settlement" was greater than actual money spent on the card, over £180 of the payment I made was made up of charges, so I'll let them argue it with me and we'll see where we get to.

Zootscoot

Whilst not mentioned within the letter, the ability for me to settle the debts was subject to all creditors agreeing to accept an amount proportional to the debt in relation to the money i had available, this was explicitly discussed with all of them since they all had to sign up to their share for me to be able to settle the debts.

when negotiating the settlement figures with each creditor I discussed the other creditors with each of them because without their understanding of what funds i had and how i arrived at their amount they would not have accepted the figures offered or atleast thats what they told me.

I have notes made at the time to this affect although it wasnt subject of a specific letter.

incidentally, Barclaycard sent a letter confriming Full and final settlement.

Glenn

Originally Posted by zootscoot

For an agreement to be binding in English law both sides must provide what is termed 'consideration'. This basically means that both parties have to give something in exchange for something else. When they promised to accept your offer in Full and final settlement, you did not give anything in exchange as you were already bound by an existing contract to pay them the money in your offer. Therefore their promise is not enforceable.

I know its pants but its the law!

You mention there is a DCA involved it might be worth doing a CCA request as well.

Good luck

A further issue comes to mind, although bound by a contract to pay back money borrowed by the original agreement, I entered into an arrangement to pay back monies with all my creditors over a period of time based on my ability to pay. they all agreed to this via Payplan.

So by offering to pay a lump sum early i was in effect giving them something they would have had to wait nearly ten years to recoup and this was outside of the terms of that agreement.

In effect in my lay view they bought the lump sum by reducing the amount they would accept.

Am i clutching at straws still?

glenn

Zootscoot

Having read this after sending you the second pm i feel happier now!

IIll see what my former creditors throw back at me and post if i have anything interesting or exciting to tell.

Glenn

Zoot

You know how you forget things, well I was searching for the letter from barclaycard since i remembered receiving that. i didnt find it but i did find letters from the DCA working for Egg, agreeing to full and final settlement but reserving the right to chase other borrowers. Since there are none i presume thats the end to the matter.

I also found a similar letter from MBNA full and final settlement pointing out that the partial settlement would be registered for 6 years.

Now all i have to do is find my notes for Abbey and i thnk all my creditors are well and truly stuffed.

Im not sure thats the correct legal phrase but im working on my jargon so pease forgive me.

Hagen please forgive my hijacking of your thread mate.

Glenn

No problem, it has been very informative.

There were no DCA's involved with my case however, I arranged the settlement on behalf of my wife (who's credit card it was) and in fact I had done this with two of them for her.

The one I mention here and another one where I made an offer to settle for a lump sum which was roughly half of the amount showing as outstanding.

So in effect, by paying them I have made a rod for my own back.

I have drafted a letter (based closely on a library template letter) to the card company I started this thread about and in the interest of being fair and reasonable I will only claim for what I have paid over the amount that was spent on the card, but I intend to charge the contractual interest rate of 29.9%.

If they wish to offset the amount I am claiming with the balance still showing on the statements then I have no problem with that. It was not real money in any case, being made up entirely of unlawful charges.

Originally Posted by zootscoot

The general rule regarding part payment of a debt is that the remainder remains payable unless the part payment was made at the creditor's request either:
1). before the due date
2). with a chattel (an object of some sort)
3). to a different destination.


If none of those exceptions apply there exist two further exceptions:

1. Composite agreements- If you paid other creditors off at the same time under an agreement with all creditors. - For one creditor to go back on the agreement would be a fraud on the other agreement.

2. Promissory estoppel. (Put simply stopping a someone going back on a promise) - If the company accepted in Full and final settlement this would amount to a promise not to sue for the rest. You would have to show that you relied on this promise to your detriment or changed your position in some way. You also have to show that you acted equitably (fairly)


It seems that by keeping your balance at 300 odd they are keeping their options open in reclaiming this money.

Not sure about this. I stepped in a paid off my wife's cards, two of them in fact that she had fallen behind with. So they were overdue of course. She received a telephone call from the credit card company and handed the phone to me after giving her permission for them to talk to me. I negotitated a full and final settlement for 50% of the outstanding balance paid then and there with my debit card. They began with the "It all needs paying" routine, but I beat them down to 50% and paid on the spot. Since joining this site however, I realise that I paid over £180 too much, even though I thought at the time I had done quite well. Only £230 was actualy spending on the card, yet they wanted over £700. So in settling for £380 ish I was not being as clever as I had thought I was!

Still, I will get it back now, along with 29.9% interest - or they will have to explain themselves before a district judge.

She has telephoned them today becuase a statement was missing, they are sending that and she also asked as to why the account is apparently still open. She was told it was an oversight and they will close it at once and send us confirmation of that.

The statement that is missing is the one that has my payment on it, is this too much of a coincidence?

Ok, here are the extra few paragraphs, with the exact details and amounts changed, not that it should matter too much.

I calculate that you have applied £XXX.XX in levies and further, I also claim interest at a rate of 29.9% as set out in the attached list of charges. I believe this rate to be justified under the principle of mutuality and reciprocity, and is based on your Cash Advance interest rate that would be applied under the terms of the above mentioned account. Therefore the total amount owed as of today’s date is £XXX.XX.

However, the account was paid off and closed during Xxxxxxxxx 2004 with a payment of £XXX.XXbeing made up of £XXX.XX of spending on the card and £XXX.XXof unlawful charges and interest. Therefore my claim against you consists of £XXX.XX and interest at 29.9% being your contractual rate since the closure of the account in Xxxxxxxxx 2004. The total amount claimed being therefore is £XXX.XX.

The total amount, if I attempted to claim it all, would be almost three times what I am actually claiming. However, I only paid half of the total so cannot reasonably claim more than I have paid and would not even try.