DBSG (debt Buyers & Sellers Group) Guidance Notes On Sale Of Debt " CABOT TAKE NOTICE"

[FANTASY CHARGES]

by popular demand me is duplicating my thread here

 

Memorandum regarding

Best Practice in the Sale Process

February 2006

 

 

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Memorandum regarding

 

Best Practice in the Sale Process

 

 

 

 

 

February 2006

 

 

 

1.

 

 

INTRODUCTION

 

The UK debt sale market is going through a period of rapid development and change.

 

It is imperative for all members of the DBSG that the integrity of the market we

 

operate in is maintained. With this in mind, the DBSG has issued the following

 

guidance notes in respect of Best Practice in the Sale Process.

It is not the intention of the DBSG that this memorandum should be regarded as a set

of rigid rules, but rather a set of guidance notes which DBSG members are

encouraged to consider and follow wherever possible. Members should ensure,

however, that they do follow the spirit of these guidelines.

It is the intention of DBSG to review these guidance notes on an annual basis to

ensure they remain relevant and appropriate. If members have observations or

feedback they wish to give to the DBSG in respect of these guidance notes, then they

are encouraged to give this feedback in writing, so this can be considered when the

memorandum is reviewed.

 

 

 

 

 

 

 

 

 

2. BIDDING SELECTION

 

·

 

 

 

 

When a seller is seeking to identify bidders for a portfolio, they should

 

ensure that the bidders have the ability to service the accounts either directly

 

or indirectly.

 

·

 

 

 

 

 

 

Sellers should only invite members of the CSA and or DBSG to participate.

 

·

 

 

Where the contract permits, the buyer to sub-contract servicing to third

 

parties, the contract should require that such third parties be members of the

 

CSA and/or DBSG.

 

 

 

 

 

3. INFORMATION TO BE PROVIDED TO PURCHASERS

 

It is in both parties interest that there is clarity on what is being sold and what is

 

being valued. In this regard it would be helpful if the terms of reference to any debt

 

sale were to include the following information:

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·

 

 

 

 

A full description of the debt, including any relevant material facts they are

 

aware of that would have a significant impact on the collectability of the

 

portfolio

 

·

 

 

 

 

 

 

A full description of the sale process, including timescales/timetable

 

·

 

 

Details of the volumes and values of accounts involved

 

·

 

 

If not the full contract, then at a minimum, the headline terms of the

 

contract, with particular references to indemnities, warranties and put back

 

provisions

 

·

 

 

 

 

 

 

The sellers closing requirements

 

·

 

 

The pre sale process, ie which activities the accounts have been sub ject to

 

prior to sale

 

·

 

 

 

 

Details of the due diligence process

 

·

 

 

The date the final cut of the sale file will be produced

 

·

 

 

The basis for verification of the data provided

 

·

 

 

The basis for verification is particularly relevant where the sale file is being

 

segmented into sub portfolios

 

·

 

 

 

 

Sufficient data to be provided to enable bidders to provide rational

 

indicative bids

 

·

 

 

 

 

Final bids should not to be required without provision of full data

 

·

 

 

The seller must take reasonable steps to ensure the accuracy of the data

 

being provided

 

·

 

 

 

 

Mutual confidentiality agreements should be executed prior to provision of

 

any data

 

N.B. If at any stage it is identified that the data definitions produced by the

 

seller are erroneous or if there are significant changes affecting the

 

collectability of the portfolio after the initial data file has been provided, an

amended version of the data definitions should be published with

explanations at the earliest opportunity and the bidders given the

opportunity to re-submit their bids in light of the new definition/data file.

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Due Diligence

 

·

 

 

 

 

The seller should provide the bidders with an opportunity to carry out due

 

diligence at the sellers premises before the bidder is required to make a firm

 

bid

 

·

 

 

 

 

 

 

The bidders should be given full access to the accounts, which are the

 

subject matter of the sale

 

·

 

 

 

 

The bidders should be given access to staff who are able to answer all

 

relevant questions regarding the accounts

 

·

 

 

 

 

There should be a opportunity for each bidder to spend a minimum of half a

 

day conducting due diligence, although the available time should be

 

proportionate to the scale and complexity of the transaction and the

 

familiarity of the bidder with the debt for sale

 

·

 

 

 

 

 

 

 

 

Due diligence should be offered on an exclusive appointment basis

 

·

 

 

The policy regarding the sharing of any information arising out of the due

 

diligence process should be clearly set out at the outset of the process

 

 

 

3.1 Bidding Process

 

·

 

 

 

 

Both buyers and sellers should follow the process outlined in the terms of

 

reference

 

·

 

 

 

 

All bidders should be treated by the seller in the same way without

 

preference

 

·

 

 

 

 

The bidding process should be proportionate to the transaction

 

·

 

 

The legal contract should be available prior to final bids being required

 

·

 

 

The bidder should raise any significant commercial issues regarding the

 

contract prior to submission of final bids

 

·

 

 

 

 

The policy regarding the sharing of any information regarding the bids

 

submitted should be clearly set out at the outset of the process

 

·

 

 

 

 

The seller should advise the bidders in a timely manner whether their bids

 

have been successful

 

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·

 

 

 

 

Written confirmation of the transaction should be issued by the seller at the

 

end of the bidding process, confirming that the debt will be sold to the

 

successful bidder at the agreed price subject to contract

 

 

 

 

 

3.2 Completion/Exchange of Data

 

·

 

 

 

 

There should be a minimum timescale of 4 working days between the

 

successful bidder being notified and the date of completion

 

·

 

 

 

 

The final cut of the data file being the subject matter of the sale should be

 

available to the buyer no later than the day of completion/fund ing

 

 

 

3.3 Post Sale Support

 

·

 

 

 

 

There should be clarity at the outset regarding the extent and length of time

 

post sale support will be available

 

·

 

 

 

 

Details of any charges to be levied in respect of the provision of such

 

support should be clear at the outset

 

·

 

 

 

 

Provisions regarding post sale support should be incorporated into the sale

 

contract

 

·

 

 

 

 

Any CAIS data or letterhead which the seller is providing to the purchaser,

 

should be provided within a reasonable timescale and in any event, no later

 

than 3 months from the date of completion

 

·

 

 

 

 

 

 

The seller should put into place the process and procedures to identify direct

 

payments

 

·

 

 

 

 

Direct payments to the seller post sale should be passed to the buyer in a

 

timely manner

 

·

 

 

 

 

Request for information by the buyer should be proportionate

 

·

 

 

The buyer should avoid making blanket requests for information,

 

particularly at the end of the support period and should have a reasonable

 

basis for each enquiry

 

·

 

 

 

 

 

 

The buyer should use its best endeavours to avoid repetition of requests

 

being made either by themselves of any other sub contractors or subsequent

 

purchasers

 

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·

 

 

 

 

The buyer should mitigate the risk of any complaints by ensuring data

 

provided by the seller, or subsequently established by the buyer, is passed to

 

any sub contractors or subsequent purchasers, particularly regarding

 

mistraced accounts.

 

·

 

 

 

 

 

 

 

 

Where there is a legal requirement upon the buyer to provide information or

 

documentation, then the seller shall provide that information or

 

documentation even where that request falls outside of the post sale support

 

timeframe

 

 

 

 

 

 

Issued by the DBSG February 2006

 

 

http://www.intelligentcollections.co.uk/DBSG_Best_Practice.pdf

 

 

 

Memorandum regarding Best Practice in the Sale Process February 2006 1. INTRODUCTION

[make them aktiv runners]

Due Diligence

 

The seller should provide the bidders with an opportunity to carry out due

 

diligence at the sellers premises before the bidder is required to make a firm

 

bid

 

 

The bidders should be given full access to the accounts, which are the

 

subject matter of the sale

 

 

The bidders should be given access to staff who are able to answer all

 

relevant questions regarding the accounts

 

 

There should be a opportunity for each bidder to spend a minimum of half a

 

day conducting due diligence, although the available time should be

 

proportionate to the scale and complexity of the transaction and the

 

familiarity of the bidder with the debt for sale

 

 

It can be argued terms & conditions allow Data Protection to be assigned or transferred, however there is nothing in either any terms/conditions I have seen or the Data Protection Act which allows any company the right to give a third party access to individuals accounts when that company is definately not contracted to process it. Due Dilligence suggests every DCA in the country can have access as part of the bidding process to personal data which they cannot all buy.

[cashins]

A full description of the debt, including any relevant material facts they are

 

 

aware of that would have a significant impact on the collectability of the

 

 

portfolio

 

Well we do have this debt for sale:

It's been through 5 DCA's now and they've all been told to F*** off. The CCA is non existant/totally unenforceable/illegeable/reconstructed. The debtor is actually dead/in a coma/paraplegic/vanished off the face of the earth/living in Sao Paulo. The debt is statute barred, but £5 was paid yesterday. So..... what am I bid?

Give me a break!!

David