Crudit Today: Limitation Act change proposal response

[the_shadow]

News

 

Limitations consultation imminent - 08/06/2009

 

The Ministry of Justice last week met representatives from the debt collection industry to discuss proposals to change the statute of limitations for civil debt.

 

A consultation is to be released this week on government plans to change the time civil debts can be chased from six years to three. The Credit Services Association, which represents debt collectors, is concerned that the transition to a new system could have an adverse effect on debtors, the industry and the courts.

 

Sara de Tute, compliance director for the CSA, said the organisation will gather views from members before responding to the consultation. "We were given a quick look at the document and it is quite debt collection and debt purchaser focused," she said. "It is likely we will oppose the cut."

 

If the proposal is enacted and implemented, the industry will have concerns about the transition. "At the moment we don’t know when it would come in and how it would be phased in – whether there would be transitional provisions or whether it would be retrospective," said de Tute.

 

Industry commentators expressed confusion over government aims, saying the MoJ’s proposal would encourage earlier litigation while the Department for Business Enterprise and Regulatory Reform is actively encouraging creditors and collectors to allow debtors breathing space.

 

One debt buyer said cases would almost certainly be advanced and the MoJ runs the risk of creditors litigating on tens of thousands of cases overnight. He added that creditors and debt buyers would be forced to litigate against ‘gone aways’ using the last address – obtaining judgment by default. "We need to make sure we have enough transition time, otherwise we’ll have to sue 50,000 people the day they make the change."

 

De Tute added that a disorderly transition would place great strain on the courts system. "I don’t think the courts could cope with it," she said.

 

The consultation is due to be out later this week and will run until the end of July.

[sosumi]

I thought Sara dT's name rang a bell.

Here she is in new appointment (Dec '08):

CSA strengthens Board with key appointments

and look here:

Tragic (G E and Westcot Credit)

:mad:

Really good 'impartial' article there by Cr. Today - again!

[PGH7447]

A consultation is to be released this week on government plans to change the time civil debts can be chased from six years to three. The Credit Services Association, which represents debt collectors, is concerned that the transition to a new system could have an adverse effect on debtors, the industry and the courts.

 

--------

 

Bring it on

 

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Sara de Tute, compliance director for the CSA, said the organisation will gather views from members before responding to the consultation. "We were given a quick look at the document and it is quite debt collection and debt purchaser focused," she said. "It is likely we will oppose the cut."

 

No suprise there then

[mr.ton]

Awwww bless the DCA's

Oppose it all they want - their opinion matters not

[ScarletPimpernel]

One debt buyer said cases would almost certainly be advanced and the MoJ runs the risk of creditors litigating on tens of thousands of cases overnight. He added that creditors and debt buyers would be forced to litigate against ‘gone aways’ using the last address – obtaining judgment by default.

 

Sounds like a fairly open threat to me, and one the MoJ could quite easily deal with, by including in the new legislation a paragraph requiring debt purchasers and creditors to have confiirmed the address as being valid before bringing proceedings.

 

Of course, some of our favourite companies obtain default judgments by sending the papers to the wrong address in the first place anyway, so it won't be anything new.

 

I'd also like to see the legislation include the requirement for debt buyers to use due diligence to ensure they have all the required documentation at the start.

[dannyboy660]

It will happen - it's just a question of when, and how to make the transition.

 

The three year limitation on unsecured consumer debt is standard throughout the EU, with notable exceptions such as the UK where bullying and threatening can go on for years while everyone turns a blind eye. In most countries the UK system is considered totally illogical and detrimental to the consumer and business in general, particularly the idea of an undefended default judgement.

 

The cross border directives aiming to increase consumer choice and protection throughout EU members states, intend to make member states drop the barriers which can often limit or even prevent companies doing business in other countries - therefore restricting not only trade, but consumer choice. This is going to be necessary to help get everyone on the road to recovery after the politically convenient recession...after all a trading bloc is what everyone wanted.

 

CSA will oppose it but the day will arrive, hopefully quite soon, when Creditors will be encouraged to maintain the relationship with those they lend money to, and a fairer system will be developed. Debt collectors in their current form will eventually become virtually obsolete and used mainly at a business level rather than to target the individual and/or their families.

[the_shadow]

I'd also like to see the legislation include the requirement for debt buyers to use due diligence to ensure they have all the required documentation at the start.

 

hahaha DCA's and due diligence :-D

 

Somebody better explain the meaning of the phrase to them

 

S.

[cerberusalert]

Typical kneejerk reaction from a bunch of shysters who realise that they'll be left with a shedload of worthless debts. Banks are loathed to give them credit & the assets they do hold are fast disappearing, it couldn't happen to a nicer industry.

[Bookworm]

Typical kneejerk reaction from a bunch of shysters who realise that they'll be left with a shedload of worthless debts. Banks are loathed to give them credit & the assets they do hold are fast disappearing, it couldn't happen to a nicer industry.

That's what I was going to say, different words, same feeling, lol.

 

Pram, toys and aww diddums spring to mind too.

[caledfwlch]

So as a bullying threat if they dont get their way, they are threatening to backlog the MOJ for years - 50,000 are hardly going to be dealt with overnight or anytime soon are they?

 

And they are honestly, and truthfully prepared to spend the amount necessary in court and legal costs to throw 50,000 cases into the system to try and get default judgements - they are prepared to spend literally thousands if not millions of pounds on a very huge risk?

 

What if 49,000 get the default overturned? That leaves them massively down in the profit margins, oh dear.

 

what if 49.000 decide to defend, how would their legal teams even begin to cope, or even cogently defend that many claims? How would they keep up with even basic CPR requests? How will they keep up with the thousands of claims using CAG letters and tactics?

 

most amusing.

[make them aktiv runners]

Sara de Tute, compliance director for the CSA, said the organisation will gather views from members before responding to the consultation.

 

Little point gathering views from those who who buy loads of statute barred debt under existing limitation rules.

 

"We need to make sure we have enough transition time, otherwise we’ll have to sue 50,000 people the day they make the change."

SP bet me to the obvious. They know the change is likely which leaves them many months before the change to get the paperwork in order. Making threats of affecting the court system on one day only shows just how unprepared they are.

[lickthewallfatboy]

so that'll be more DCA jobs disappearing into the ether then!

 

I can't quite bring myself to give a flying stuff........oh well

[ScarletPimpernel]

I don't think the prospect of job losses in the debt industry is very serious anyway. The majority of jobs, such as phone monkeys, don't require qualifications or real skills, and the turnover rate in callcentres is quite high. The turnover rate is also affected by the exploitative nature of the industry - target and commission driven - will also take its toll. There are, however, always lots of similar jobs, and when there aren't, MacDonalds are always recruiting.

 

Those in the higher echelons have usually descended into the sewer of the debt industry from elsewhere in the financial sector, so should be able to be reabsorbed, especially as creditors are more likely to take collections back in-house rather than risk their reputations with a DCA.

 

I wonder which consumer organisations the MOJ has consulted?

[Cruthin]

Does anyone know when this might become law? 2010? 2011? And is it likely to cover the whole UK and not just England and Wales?

Edited June 9, 2009 by Cruthin
Added more

[harrassed senior]

So as a bullying threat if they dont get their way, they are threatening to backlog the MOJ for years - 50,000 are hardly going to be dealt with overnight or anytime soon are they?

 

And they are honestly, and truthfully prepared to spend the amount necessary in court and legal costs to throw 50,000 cases into the system to try and get default judgements - they are prepared to spend literally thousands if not millions of pounds on a very huge risk?

 

What if 49,000 get the default overturned? That leaves them massively down in the profit margins, oh dear.

 

what if 49.000 decide to defend, how would their legal teams even begin to cope, or even cogently defend that many claims? How would they keep up with even basic CPR requests? How will they keep up with the thousands of claims using CAG letters and tactics?

 

most amusing.

 

....and many will become statute barred during the waiting time whether it be 3 or 6 years!

[babybear39]

Subscribing...I bet there a few debt purchasers in the nawty corner right now and for the months to come

[smouk]

Industry commentators expressed confusion over government aims, saying the MoJ’s proposal would encourage earlier litigation while the Department for Business Enterprise and Regulatory Reform is actively encouraging creditors and collectors to allow debtors breathing space.

 

One debt buyer said cases would almost certainly be advanced and the MoJ runs the risk of creditors litigating on tens of thousands of cases overnight. He added that creditors and debt buyers would be forced to litigate against ‘gone aways’ using the last address – obtaining judgment by default. "We need to make sure we have enough transition time, otherwise we’ll have to sue 50,000 people the day they make the change."

Translate: C'mon, you know what a shower o' b'stards we are!

[cashins]

And they are honestly, and truthfully prepared to spend the amount necessary in court and legal costs to throw 50,000 cases into the system to try and get default judgements - they are prepared to spend literally thousands if not millions of pounds on a very huge risk?

 

I very much doubt if they have the resouces to handle the huge numbers that would bounce straight back to them to be set aside.

 

Usual DCA bullsh*t. If they can't come up with a cause for action in 3 years, how are their chances improved by the extra 3 years they get now?

 

David

 

PS Good news is, if this goes through, it would make a logical case for CRA's to remove info after 3 years also.

[smouk]

PS Good news is, if this goes through, it would make a logical case for CRA's to remove info after 3 years also.

Aaaaaargh!....the 'L' word!

[Kraken1]

hoo-har over nought I reckon. I doubt a change will be retrospective and so they'll be no need for thousands of cases to be rushed through.

 

I'm also not convinced that this is necessarily a good thing for consumers. It is a lot easier to lose stuff (like an agreement) if you have six years in which to do so. I think a shorter limitation period will mean accounts are passed between dcas fewer times and that the likelihood of mistakes is reduced.

[sosumi]

One debt buyer said cases would almost certainly be advanced and the MoJ runs the risk of creditors litigating on tens of thousands of cases overnight. He added that creditors and debt buyers would be forced to litigate against ‘gone aways’ using the last address – obtaining judgment by default.

Gosh I don't know but that sounds illegal to me.

So the unnamed 'debt buyer' spokesman is saying that members of a supposedly responsible and 'apparently' respectable association of DCAs has said publicly that they'll be silently suing tens of thousands of people - On a supposition that they might owe some money that said DCAs bought for a couple of quid?

Thanks for putting it on the record Credit Today.

We should all nip over there and print the article out, just in case they decide to edit it

... here's the link:

Credit Today online

Edited June 9, 2009 by sosumi

[diddydicky]

The chances of retrospective legislation is slim to zero- for a start there would be years of cases backed up in the courts on legal issues as there would be for any retrospective legislation.

 

secondly if it were backdated 99% of us would be opening champagne!

[cashins]

Aaaaaargh!....the 'L' word!

 

Yeh alright, it is asking too much I suppose.

 

David

[F_DCAs]

I know the 'credit' industry are getting desperate, but this is a new low. Basically, it's 'jump to our tune or we'll flood the legal system'. In other words, emotional blackmail.

 

I don't think the legal system will look kindly on this at all, and it could well do the opposite of what the industry would like.

[ODC]

With the prospect of a general election in the not to distant future I wonder which side the sitting MP's will take. That of a grimy industry full of shysters or the people who can vote you out of a lucrative job.

 

Now many would say our MPs have a lot in common with the DCAs but I think a campaign to our MPs highlighting the silly plans of the DCAs would stop this in its tracks.