Are CCAs really legally creditors?

[friendly debt collector]

Bearing in mind that Cabot & the like actually buy their accounts from banks, credit card companies etc. at extremely discounted rates (proabably 5-10% of their value). Can they be classed as lenders? Are they really creditors? and do they have the right to register you with Credit Reference Agencies? Some people are paying them regularly, but are still given a poor rating, when they are actually very good customers. Can we have some legal brains on this please

[tiglet]

When they buy the debt, they buy all of the righst and duties associated with it.

 

Also, I think you mean DCA's!

[friendly debt collector]

When they buy the debt, they buy all of the righst and duties associated with it.

 

Also, I think you mean DCA's!

 

 

Thanks, but I'm not sure that's the answer. It still doesn't make them the lender or does it?

[tiglet]

To all intents and purposes - yes. They have purchased the debt from the original creditor, which is something which only happens when the account is in arrears or default.

[shane5408]

Hi,

 

The CCA 1974 defines creditor as

 

“creditor ” means the person providing credit under a consumer credit agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer credit agreement, includes the prospective creditor;

[friendly debt collector]

Hi,

 

The CCA 1974 defines creditor as

 

“creditor ” means the person providing credit under a consumer credit agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer credit agreement, includes the prospective creditor;

 

 

Thanks

So is there a legal document of assignment and is the debtor entitled to demand sight of it. And if there isn't one what's the case?

[shane5408]

32.2.4. Assignment of debts

 

Assignment is a process whereby debts are sold on to another organisation, and is common practice within the industry.

For an assignment of a debt to be legally effective, it is necessary to assign both the rights and the responsibilities of the creditor under the agreement.

Partial assignment which, in effect, assigns the right to enforce but not the associated responsibilities will be invalid and will preclude the assignee from enforcing the debt.

There are two types of deed of assignment - equitable and absolute. The first assigns the right to pursue the debt to the assignee but not the obligation of the OC. The second assigns both the rights and obligations of the assignor to the assignee. However, in order for this to be legally binding you as the debtor would have to give your consent to such an assignment.

 

If the notice includes an amount demanded that is incorrect it renders the notice legally invalid (e.g. unlawful charges or DCA admin/collection charges).

Even if the amount doesn't include charges but is misstated it is still invalid.

If the date is incorrect it is legally invalid (i.e. does not tie in with the deed of assignment - the execution of assignment should be the same as the date shown on the notice).

The case that supports this is W.F.Harrison & Co Ltd v Burke [1956] 1 WLR 419

 

some of the above has been reproduced from earlier posts on different threads by Rory

 

regards,

shane

[rory32]

So is there a legal document of assignment

Yes

 

and is the debtor entitled to demand sight of it.

They can ask for site of it but it is unlikley that they will be given it as it will show how much the account was sold for. They can only demand site of it if there are court proceedings.

 

That being said what does need to be provided before collecting on any account is a Notice of Assignment.

 

And if there isn't one what's the case?

The DCA is in deep doodoo. Any account that is sold requires a deed.

 

I'm suprised you don't know this being a debt collector.

[diskmandave]

Section 175 of the Consumer Credit Act applies to a debt collection agency chasing payment on behalf of a client.

175. Where under this Act a person is deemed to receive a notice or payment as agent of the creditor or owner under a regulated agreement, he shall be deemed to be under a contractual duty to the creditor or owner to transmit the notice, or remit the payment,

to him forthwith.

Section 189 of the Act applies to an "agency" the has bought a debt, but for the purpose of the Act see's them in the same light as the original creditor.

“ creditor “ means the person providing credit under a consumer credit agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer credit agreement, includes the prospective creditor;

So in both cases, as I believe you're asking a DCA is seen as being the creditor... For the purpose of the Act.

 

Regards, Dave.

 

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[NitrousOxide]

A few DCA's are quoting "rights but not duties". And that they are "not the OC and we didn't supply the credit" "we do not have to supply CCA".

If they say this I think they are on dodgy ground if they instigate court action on their own.

If they don't supply paperwork and mask their obligations of the CCA behind the law of property act then you could argue about the default if they have registered one.

[Curlyben]

I love the LoP "argument" as under s136 the assignment is ABSOLUTE so the DCA has purchased the entire account, lock, stock and everything.

So they are liable for ALL the rights AND duties of the original creditor as if they supplied the facility.

 

When certain DCA's quote LoP they are trying to confuse the whole ownership issue and mislead the debtor.

 

Look at it this way HOW can an unenforceable debt under CCA suddenly become enforceable again by assignment under LoP.

Answer it can't !!!

 

Where the DCA says rights but not duties they are referring to an equitable assignment that ISN'T covered by LoP at all.

In this case they can only use court enforcement along side the OC and NOT in their own right.

 

I hope that's as clear as mud

[friendly debt collector]

Thanks everybody. Although I'm a debt collector, I'm no particular friend of banks etc and I beleive in fairness. My take on bought debts from my experience is that they're what the loan company sees as hopeless cases so they sell them on for 10, maybe 5% and claim from the underwriters. The DCA then pusues the debt by a slightly higher level of harrassment and maybe, eventually doorstep collectors like me. By the time I get the debt I can usually offer the debter (or in view of the circumstances I think they are customers) a settlement. Often 50%. Take off my commission (20%) and the setlement becomes 40%. Of course most people arn't in a position to take advantage of this, so they pay regular acceptable payments. What I really don't like is that given these circumstance and the high profits that we're making out of the "customer", is it fair that a regular payer is still given an 8 rating on Experian etc. Should they be registered on Experian at all? It's not like the debter has run off with the DCAs cash. They bought the debt voluntarily.

Or am I just a softy

[tiglet]

Ah - a soft debt collector - that's what we like to hear!

 

I've actually posted earlier this year about a friendly debt collector, who actually was so angry that he'd had my account passed to him when his client was at fault in not dealing with my complaint, that he made a complaint to them!

 

To get back to your point, i'm not sure whether fairness comes into it, to be honest. Credit record companies do not seem to act in a fair way at all, judging by threads I have read and contributed to on this forum. They accept DCA's and other institutions word without question and it is extremely difficult for people to get adverse information removed. All lenders make a high profit out of debtors, so the argument, to my mind, becomes null and void in relation to the specific.

 

The reason the customer continues to be deemed as an 8 is because at some point they have defaulted (or alledgedly defaulted in some cases). This stays on file for 6 years. If this is correct, then I'm afraid whether a regular payment is made or not, the account has still been defaulted. I think it would be good if there was some way of showing that the debtor had made said payments, but I don't think when it comes to credit scoring this would change the debtors ability to obtain credit.

 

However, what is a problem is when a DCA purchases a debt and then records an additional default which leads to either two defaults being registered for the same debt or the 6 years being restarted. A creditor can register a default at any time after a default notice has been issued.

[spamheed]

It seems to me that CRA's are just an extension of the Credit Industries punitive approach to defaulted debts.

 

At the very least a person defaulting on a debt can expect to be harrassed, either by the OC, or DCA, or solicitors, any combination, or even by them all

 

Words tha also come to mind are Bullied, Persecuted, misled, deceived and in one particlarly high profile case "suicidal"

the ordeal of court action, followed by sanctions via attachment of earnings, possession of property and loss of home etc

 

then when they've finally bled a debtor white, the good old CRA steps in and shafts you for at least 6 years (might be more if current legislation is changed)

 

This they do without even checking if the creditor has even the most basic of paperwork to verify the creditor even owns the debt, let alone that they may be telling vindictive porkies to further ruin their target.

 

God bless the legal system and all who sail in her

[friendly debt collector]

So, where's the incentive for paying more than the very minimum? are the DCAs shooting themselves in the foot?

[shane5408]

My take on bought debts from my experience is that they're what the loan company sees as hopeless cases so they sell them on for 10, maybe 5% and claim from the underwriters

 

Hiya,

 

Could you elaborate a little more on this please, I assume you're talking about Original Creditors 'charging off' what they deem bad debts, selling them to DCA's and then getting some sort of tax relief for it Are you saying they also are fully insured in instances where they cannot collect the debt and get a payout?

 

kind regards,

shane

[friendly debt collector]

Hiya,

 

Could you elaborate a little more on this please, I assume you're talking about Original Creditors 'charging off' what they deem bad debts, selling them to DCA's and then getting some sort of tax relief for it Are you saying they also are fully insured in instances where they cannot collect the debt and get a payout?

 

kind regards,

shane

 

As I understand it, yes. Probably not 100% but as I understand it a proportion of the interest rate thet we pay goes to underwrite bad debts. Did you really imagine that banks took risks?

I'm sure there's someone out there who can elaborate further.

Hope we find out more

FDC