Equitable Notice Of Assignment

[rich2568]

My question is what difference an Equitable N.O.A. makes- and actually what defines an equitable NOA?

 

Also are they supposed to be popped in the post 2nd class? (no proof of delivery)

[Ross-co]

Sounds to me like someone is trying to gain the benefits but not the burden of an assignment.

 

An equitable assignment would transfer only the benefits under the agreement, i.e. the right to collect the money but without the duty to supply documnets etc.

 

It's unlikely a court would let an equitable beneficiary act on their own in a claim against you. The court would want to join the original creditor as a party to the case.

[silverfox1961]

This has been confusing me for a while.

If a DCA buys the rights but not the duties, how can they put notices on our CRA files.

As i see it the rights are to COLLECT the debt. The duties are everything else to do with the original creditor.

When an agreement is signed, we are giving permission to use our data. That is the duties of the Credit companies but when the rights are passed/sold on, the duties stay with the original creditor.

I know i'm still very green with DCA's but I had to ask.

 

fox

[rich2568]

this could be an interesting thread

 

so what are we actually stating here- the DCA only buys the right to collect the debt and not actually the right to produce docs when requested- this still lies with the original creditor??

[bazaar]

This is why we have to send the CCA to the original creditor, because the DCA will just refer it back. The point about the CRA info is very interesting.

[silverfox1961]

Apparently so. When I CCA'd my DCA's they all wrote back saying they had to get them from the OC.

There's also another issue. I remember an old form i filled when they said they would pass on my details to other reputable companies unless I said no. If I ticked the box then they shouldn't pass them on and as for a DCA being reputable:rolleyes:

 

fox

[bazaar]

I also recently had to sign one of those forms at the bank.

But I wrote in big letters next to my sig 'No Marketing or other data transfers'

Probably wont make a blind bit of diff, but made me feel a little better at the time

[Ross-co]

Yes this could get interesting.

 

Here's an analogy

 

There are two 'titles' that are present in owning a house (or other real property).

 

Basically there are:-

 

1. The bare legal title

2. The equitable title.

 

The difference between the two is that the legal title allows you to sell the property etc but doesn't entitle you to profits from the property. i.e rents and income.

 

The Equitable title doesn't entitles you to sell the property, or untake any dealings in the property, but allows you the benefits of rent and income.

 

In fact an equitable owner has almost no means of taking action in respect of the property itself. They must rely on the legal owner to do that on thier behalf.

 

This is why a conveyance is slightly complex. It is vital that the two titles stay together and pass to the new owner at the same time.

 

In this situation the OC appears to have assigned the right to the income from the debt to the DCA but not the legal ownership of it. The question that remains is does this entitle the DCA to act unilaterally in collecting the debt. I say no it doesn't. The OC must take the action and pass the income to the DCA.

[rich2568]

We need someone with legal expertise to look into this for us!

 

Any more comments!!

[tifo]

so what are we actually stating here- the DCA only buys the right to collect the debt and not actually the right to produce docs when requested- this still lies with the original creditor??

 

Most DCAs will state they have bought the rights and benefits but not the obligations and liabilities, which is why you claim charges back from the bank but can do so from the DCA if you want (last paragraph below), as what they're saying seems to be wrong.

 

There has been much discussion on this topic in this forum and there are many threads which have pulled DCAs apart for this. Many of the posts by the member 'Richard Spud' went into extreme legal detail about this.

 

Agreements sold under s.136 of the Law of Property Act 1925 are absolute in nature, meaning the DCA 'buys' everything. This is why it is able to sue in its own name and maintain a default. Therefore, what they say and do doesn't match.

 

An equitable assignment is when they only have the right to collect the money on behalf of the creditor. The account is not sold so the bank can still sue in its own name and maintain a default. This is done under the agreement when you accepted they may pass your info to outside agencies for collection purposes.

 

Therefore if the DCA quotes they have bought the debt under s.136 LoP 1925 then the assignment is total and they have bought everything, even the liabilities such as refunding the charges, though most people claim from the bank, and the obligations such as complying with a CCA request. The fact they have to refer back to the bank is because they are meant to have these documents in their possession but don't as most people simply accept the debt and what the DCA/bank says, so they've become lazy.

 

There has also been some debate on the right of set off and whether DCAs can receive the benefits of a refund of charges when they are a separate creditor. Case law in some way supports that they can because the debtor is not discriminated by the assignment and they can do everything against the DCA that they could against the bank. This is why you can ask the DCA for a refund of charges the bank applied, because the DCA has bought the account and accepted the liabilities.

Edited December 2, 2008 by tifo

[rich2568]

So when the NOA becomes `equitable`- is this where the DCA can then apply interest from the date of default- or does this have to be within the T & C`s from the OC?

 

Or does it have to be `absolute` before such interest is charged?

[rich2568]

bump

 

Really could do with a decisive answer on this- its quite a critical point in regards to when a DCA adds interest onto the debt from the date of default- this demand could then land on your doormat 2/3/4 years down the line (from the original default) and equate to a lot of money!!!!

[rich2568]

bump

 

Really could do with a decisive answer on this- its quite a critical point in regards to when a DCA adds interest onto the debt from the date of default- this demand could then land on your doormat 2/3/4 years down the line (from the original default) and equate to a lot of money!!!!

[blind-as-a-bat]

Assigning A Debt Or Benefit Of Contract?

It is important to first provide the debtor with a notice of the assignment!

Other points and issues that should be borne in mind:

 

· In principle, the benefit of a contract can be legally assigned without consent, provided there is no express prohibition on assignment or, for example, a requirement that consent is obtained.

 

· Where there is no restriction on assignment, the usual way of assigning the benefit of contractual rights is by statutory assignment. The assignment must be in writing, signed by the

assignor, absolute (not purporting to be by way of charge only) and notice in writing must be given to the other contracting party (section 136, Law of Property Act 1925).

 

· If a contract is not effectively assigned under statute, it may still be assigned under common law by an equitable assignment. An equitable assignment may exist where the requirements for a statutory assignment are not satisfied.

 

The main practical consequence of an equitable

assignment is that the assignee cannot bring an action in its own name against the third party, but must fall back on the rules governing equitable assignments and join the assignor as a party to the action.

 

It is, in any event, desirable for notice of an assignment to be given to the third party because the third party will otherwise be entitled to continue to make payments to the assignor.

 

Notice will give the assignee priority over any other assignee that has failed to give notice, provided there is no knowledge of such prior assignment.

 

· The burden of a contract cannot be assigned. It is therefore necessary to novate, rather than assign, certain contracts. Novation is, in effect, the rescission of one contract and the substitution of a new contract in which the same acts are to be performed but by different parties.

 

· On the sale of a business, the asset purchase agreement may specifically assign the benefit of the seller's contracts to the purchaser. Assuming that there is no restriction on

assignment, this amounts to a statutory assignment, provided that notice is also given to the other contracting party. If assignment is not possible, or only possible with consent, the asset purchase agreement may provide that such contracts are held on trust pending the obtaining of

formal consent to assign or novate.

 

Trade debts often remain with the seller on the sale of a business because giving written notice of the assignment of the debt to each debtor can, depending on the number of debtors, be time consuming and expensive.

 

Where the trade debts remain with the seller, the seller may continue to

collect the debts, or else the buyer may collect the debts as agent for the seller.

 

As the burden of a contract may not be assigned, liability for breach of contract stays with the seller, who will therefore seek an indemnity from the buyer in relation to any breach occurring after completion.

.

 

Not sure if this is any help, its a piece of text i found on a legal site while looking into assignments

[miffedpuppy]

Often you will get a DCA whom states it acts as an agent for a creditor, sometimes this may be an equitable assignment and sometimes not.

This depends on how they ask you to pay, if they ask for payments to them it must be an equitable assignment, if they ask you to pay the creditor direct then they are purely agents.

 

With regard to the concept of Agency it is a consensual relationship created by contract or by law where one party, the principal, grants authority for another party, the agent, to act on behalf of and under control of the principal to deal with a third party. An agency relationship is fiduciary in nature, and the actions and words of an agent exchanged with a third party bind the principal.

Ergo if they issued a Default Notice that is non compliant with the regulations they have bound the principal to the consequences of their actions.

[rich2568]

Thanks for that

 

Any one else want to provide their input on this most interesting subject!!