Cabot's methods of buying debts?

[pmhcfc]

What with Cabot beginning to top many google search charts, I was wondering if another name change may be around the corner...

 

So suggestions please on a new name they may choose....(Keep it clean!)

[pmhcfc]

Kings Hill (No 666) Limited?

 

Who's says I've too much time on my hands...Did you realise that 'Cabot Financial (Uk/Europe) Ltd' is actually an anagam of

 

OFT TRIBUNAL KEN? CIAO (CLAP DUE)

[pmhcfc]

Who's says I've too much time on my hands...Did you realise that 'Cabot Financial (Uk/Europe) Ltd' is actually an anagam of

 

OFT TRIBUNAL KEN? CIAO (CLAP DUE)

 

 

Whilst an anagram of CABOT FINANCIAL UK LTD. is

 

FLOUT DATABANK CLINIC

 

or if you'd prefer another anagram; Cabot Financial Europe Ltd is

 

NOTICEABLE PLATONIC FRAUD

[pmhcfc]

I'm the same poition as you Seahorse...bored waiting for reply so a couple more anagrams...

 

Ken Maynard = A Manky Nerd

 

(Ken's number 2) > Glen Crawford = Corn Leg Dwarf

[pmhcfc]

Kings Hill No. One would be - Hi. Kens Long Loin

 

I need to get out more, or get a reply from Cabot to work on.

[pmhcfc]

ORRRRRRRRR... an anagram of mine would be, AM I IN ****?

 

last word will no doubt add to the confusion, as I'm sure the profanity checker will star it out.

 

(That'll give WW something to puzzle over with his morning coffee. )

 

Youre making it easy SH...You think Willem Wellinghoff is feeling left out? - best I can do for him (anagram wise) is :

 

WELL, ME WHIFF GIN LOL

[pmhcfc]

As per Tberns thread and recent comments from Glen that Cabot are not creditors, it made me look...I realised that there's a message for somone on here to expose a certain DCA...Honestly! Because and anagram of: G.C. 'Cabot not a creditor'

 

is: CC Act: 'Go to Radio Tbern'

 

You see, they talking in code!

[pmhcfc]

Right,

 

I now have written proof that Cabot have been (and probably still do) buying Barclay (if not all) debts under the Law of Property (1925) Act. For this reason, they feel they can squirm out of having anything to do wih the responsibilities. Whilst I appreciate this isn't original news to some of us, the fact remains that this all seems VERY dodgy.

 

Now this poses many questions;

 

a) Does this not mean that the Original Agreement becomes void ?

 

b) Does Cabots have any rights to add any interest to these debts?

 

c) Does it give Cabot the right to take over the files at any CRA's, considering this debt no longer exists under the Original Agreement.

 

d) Does this not mean that this is a totally 'new debt' and therefore Cabot can only recover the money they paid for the debt? After all, nothing has been signed with Cabot.

 

e) If they ever took you to court, wouldn't their 'prosecution' have to be carried out under the LoP 1925?

 

After spending the afternoon on the phone, the above is now being looked into by the OFT, the ICO, Trading Standards and the FOS. The person I spoke to at TS, whilst not qualified, feels that if a company do this - that is buy a debt under the LoP which was originally signed for under the CCA- then they have NO RIGHT to add any interest and when collecting the 'debt' they would have to collect the said debt under all the laws of the LoP 1925....

 

It's quite simple isn't it? Cabot can't say that they are adding interest etc, under the terms of the Original Agreement, if the terms of the OA no longer exist!

 

That just leaves me with one final assumption; all Cabot debts are purchased under the LoP. If this is the case, we just need to get a ruling which clarifies the point that they can't add interest to these debts - let alone log them with the CRA's- and it should help a hell of a lot of people.

[pmhcfc]

OK, here it goes:

 

it's quite permissable to assign absolutly a credit agreement using the LOP 1925, even if it is a regulated credit agreement, assuming they have consent for such an assignment.

 

an assignment under the LOP 1925 can only be an absolute, or legal, assignment.

 

Under such circumstances, the new credit agreement would be on the same terms, and with the same rights and duties as the original credit agreement.

 

e.g. cabot could charge interest.

 

This level of assignment is the necessary requirement for Cabot to sue in their own right. it is my opinion that the court does not have jurisdiction for an equitable owner to sue.

 

Has there been a ruling on this ?

 

I'm not sure I understand your very last sentence > the court does not have jurisdiction for an equitable owner to sue. If I'm being thick then I am sorry, but could you explain it please, I'm very interested in this now.

 

And, If it is under the same terms etc, then Cabot's argument that they don't have to supply agreements etc is wrong ?

[pmhcfc]

However, if the assignment is EQUITABLE, then the new owner may only sue alongside the original creditor, IMHO.

 

As I have said earlier, we should take this up with the original creditor, and ask them if they would like to join the new owner in court. I think this would at the very least get them p1ssed off with their bestest buddies in the debt purchasing industry.

 

Weird, now you're reading my mind..Plans are afoot for me to do this as we speak...will let you know via our other form of cabot communication

[pmhcfc]

I wonder if this taste sour ?

 

Cabot Cheese

[pmhcfc]

Found an article for you, written by Glen Crawford, I've highlighted something in Blue that seems interesting to me.

 

Back in 1998, when Cabot Financial executed the first sale of non-performing credit card accounts with one of the UK's mainstream banks, we developed a form of contract that has since been adopted as the UK industry standard.

 

In essence, that contract is a set of master terms and conditions governing any offers of receivables which the seller may make to the buyer. Acceptance of such an offer by the buyer is achieved through "course of conduct", that is, by the act of paying the purchase monies to the seller. In this way, no stampable assignment document is created, thereby avoiding the need for the buyer to pay Stamp Duty, typically at the top rate of 4 per cent of the purchase price.

Avoiding Stamp Duty in this way gave the buyer "equitable" but not "legal" title - meaning that the buyer, or the seller, could not rely on the terms of the sale agreement in court without first paying the relevant duty. In practice, this would only ever be an issue in the event of a breakdown in relations between buyer and seller such that one was actually litigating against the other - and in such event paying the duty would "perfect" the title anyway.

 

Most buyers, including ourselves, combined the "offer and acceptance" mechanism with offshore signing and retention of documents so that if, for any reason, the offer and acceptance mechanism was deemed not to be effective, penalties for non-payment of the duty would only run from the time, if ever, that the original documentation was brought back onshore

So then, that's the history lesson. From 1 December 2003, Stamp Duty on non-marketable securities (that is, debts and other securities that are not traded on a stock exchange) executed on or after that date, is abolished by the Finance Act 2003. However, documents executed prior to 1 December will still be governed by the "old" rules.

 

What are the implications of this change in the rules for the UK debt sale and purchase industry?

 

First, the existing form of contract in common use, with the offer and acceptance mechanism, still works as it always did and indeed continues to facilitate "forward flow" arrangements where receivables are sold, typically on a monthly basis, by a seller with the buyer not being bound to accept the monthly tranche of debts until verification of the underlying data and eligibility criteria has been completed. No change in practice is therefore required.

 

However, it seems sensible, particularly for one-off transactions, to simplify the form of contract by removing the offer and acceptance mechanism and replacing it with simple assignment language. There is no requirement, though, for sellers and buyers to depart from the existing contract they are familiar with.

 

Second, there is now no longer any benefit in executing and retaining documentation offshore - though sellers should take care to ensure that anyone purporting to sign for the selling organisation is properly authorised to do so. This may still require a power of attorney to be granted in favour of the signatory, so those involved in debt sale may need to refer to their legal or company secretarial departments for clarification.

 

Care must also be taken to ensure that any documents of title which have already been executed and retained offshore (that is, prior to 1 December), pursuant to the underlying Sale Agreements, are not brought into the UK because Stamp Duty under the "old rules" will apply to those documents.

 

Finally, it may be that some sellers will now change the way in which they conduct the debt sale process itself. In the UK, most selling originators undertake a competitive price tendering process when selling debt, which may involve one or more rounds of bidding as the field of potential buyers in narrowed down. Few originators in the UK actually conduct formal auctions, with one reason being that formal auctions require binding bids. If an auction bid is binding, and the parties then purport to enter into a sale agreement containing an offer and acceptance mechanism, our view is that, in such case, the offer and acceptance is merely a sham and Stamp Duty is payable. Or it would have been prior to 1 December 2003.

 

One obstacle to true debt auctions, which are common practice in the US, has therefore been removed. There are others of course, not least the need for sellers who wish to conduct auctions to produce comprehensive and standardised due diligence information - to create a more level playing field amongst buyers. Some UK originators, driven by their procurement departments, will undoubtedly embark on this route. Some have tried it and moved away again; others see no benefit whatsoever over a tightly managed tendering process. Let's wait and see.

[pmhcfc]

Glen Crawford; here's a small extract from another one of his articles.....

 

The more interesting statistic, however, is that the relative price paid for the debt has increased even more dramatically, from an average of four pence in the pound three years ago to nearer eight or nine pence in the pound now. The main reason for this is that most sellers have exhausted their early "dustbin sales", which cleared out the older books. The majority of what is being sold today is freshly charged-off debt, either preagency placement (sold from 180 days delinquency) or post one agency placement, with the non-paying debts having been recalled for sale after the agent has had them for a further 180 days. In general, the fresher the debt, the higher the price it commands.

[pmhcfc]

How Cabot Financial collect statute barred debts (the Glen Crawford way):

 

Ask any collection agent, trace agent or debt purchaser about regulatory compliance and most would bemoan the increasingly stringent legal and regulatory environment within which we operate.

 

Take, for example, the wrangles with the Information Commissioner over the use of electoral roll data and the recent OFT guidelines which, amongst other things, seek to restrict "door-knocking" to "by appointment only". These things make life harder for everyone in the collection industry. Look deeper, however, and the debt purchase model is emerging as the clear winner.

 

One of the recognised benefits of true debt sale over traditional contingency collections is that VAT is removed from the equation. No VAT is chargeable on the sale of debt as no service is being provided by the buyer. Collection agents must, however, charge VAT on all commissions they earn.

 

A lesser-known advantage relates to the collectability of "statute-barred" accounts. If, in most cases, more than six years has elapsed since the date of default on an account (or, if later, the date the customer last acknowledged the debt), no legal proceedings may be brought for recovery. Unhelpfully, the default is automatically removed from the customer's credit bureaux records at the same time. No incentive for a customer to pay then, unless perhaps legal proceedings could be instigated for another debt still within the six year period. Larger debt-buyers like Cabot Financial, with vast portfolios of acquired accounts, see the same customers appearing again and again. We are often able to use related accounts as a means of reaching an acceptable aggregated settlement with a customer - to include statute-barred balances.

 

A contingency collection agent cannot bring this legitimate leverage to bear.

 

The pursuit of statute-barred debts is one area of concern for the OFT, fearful that strong-arm tactics could be used in the absence of the legitimate incentives larger debt-buyers may be able to utilise.

 

The regulators are also keen to stop the inconsistent approach adopted by lenders in collecting overdue or charged-off accounts. It is common for a customer to be subjected first to internal recoveries, then perhaps an in-house agent, followed by a first external collection placement, then a second, and finally maybe a third tertiary placement. Each could typically be for three, six or 12 months at a time. This often serves merely to alienate the customer. The regulators believe that customers have the right to be treated fairly and consistently. Enter the debtbuyers, who are able to take a longterm view of collections without resorting to short-term shock tactics. This issue will not only encourage lenders to sell, but also to sell at an earlier stage - avoiding the intermediary agency placements.

 

At Cabot Financial, we are, for example, seeing increasing numbers of lenders seeking to sell us accounts at less than 180 days delinquency. This doesn't leave much time for external agency placements.

 

With reputational risk ever-more important to credit originators, and more consumerorientated legislation on its way from Europe, this trend is sure to continue, leading lenders to choose buying partners like Cabot Financial who are able to work within the spirit, and not merely the letter, of evolving laws and regulatory guidelines.

[pmhcfc]

This is the first I've heard about Cabot buying debts under the LoP. How did it become apparent that this is what they've been doing?

 

Does anyone know WHEN they started this practice?

 

 

I have written proof

[pmhcfc]

Credit, debits and related services: Debts and related services: Contents

 

Sale of a debt

 

The sale of a debt is a financial transaction, whereby the purchaser acquires ownership of debts from a creditor, at a nominal sum to the face value of the debts. The purchaser assumes all the rights and obligations of the original creditor and all legal and beneficial or equitable interest passes to the buyer to whom full title and risk is transferred.

[pmhcfc]

I shall save that link and next time I get a fobbing off threatogram shall email that link and say, do you have higher authority than this?.

 

Hmmm,,Perhaps let Cabot be the first to be pushed in the direction of this link...