Full & Final Settlements

[questioner]

Full & Final Settlements are perhaps the light at the end of the tunnel of DCA darkness for many folks distressed over accounts, so I thought it may be prudent to have a thread devoted to this issue alone.

 

Perhaps others could give experiences, tips and advice here for others who are not sure about F&F procedures.

[PGH7447]

dont make an offer unless it is in writing and they agree to clear your credit file

[the_shadow]

Always keep in mind how little a DCA have actually paid for the debt before offering an amount.

 

...and therefore as in any negotiations always start with a very low offer and increase slightly until agreement or the top end of what you are willing to pay is reached.

 

 

S.

[questioner]

I have not managed to reach this lofty F&F position yet, but I have been told that offers usually start at 10% on accounts in dispute.

 

Regarding the "top end" of an offer - what happens after that if they still play hard to get?

 

S - do we have any example letters of playing this hand??????

[the_shadow]

I have not managed to reach this lofty F&F position yet, but I have been told that offers usually start at 10% on accounts in dispute.

 

Regarding the "top end" of an offer - what happens after that if they still play hard to get?

 

S - do we have any example letters of playing this hand??????

 

You walk away from the table until they become more reasonable... if you are offering a f&f due to no CCA or no prescribed terms then you should be in the position of power over negotiations and not allowing yourself to be bullied.

 

Dont think their are any templates for offers but if their are they'll be in either the templates lib (click on link) or the DCA library (click on link)

 

S.

[questioner]

You walk away from the table until they become more reasonable... if you are offering a f&f due to no CCA or no prescribed terms then you should be in the position of power over negotiations and not allowing yourself to be bullied.

 

Dont think their are any templates for offers but if their are they'll be in either the templates lib (click on link) or the DCA library (click on link)

 

S.

 

Some of my CCA requests they have sent in seem to be sorta in the middle no mans ground between being enforcable or otherwise.

 

Besides - I would not offer a penny unless I was very sure that they had a bulletproof case.

 

Just checked for templates and no luck. This is odd as I swear I have seen one somewhere.....

Edited August 11, 2009 by questioner

[questioner]

Some people have told me that it’s better to try and get someone else to make offers, in your name.

 

Some have alternatively said - do it yourself and head the letter “WITHOUT PREJUDICE”. I think this is supposed to means that the letter cannot be used in a court as liability to one admitting any debt? Is this correct?

 

I prefer to go it alone rather than asking for help off friends etc. If the friend vanishes later on and the vultures come back they could say one still owed a debt.

 

What do others think about this?

[lilly white]

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/134506-inside-dca.html

 

There are many ways to offer.

They do depend on your position.

Also your tactics should change given what they are aware of i.e. your position are you house owner are you working.

Please if you have time have a read of above. it will give you an insight.

[Having_A_Knightmare]

Easy

 

If the agreement is in the slightess bit unenforcable offer nothing!!!

 

HAK

[questioner]

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/134506-inside-dca.html

 

There are many ways to offer.

 

They do depend on your position.

 

Also your tactics should change given what they are aware of i.e. your position are you house owner are you working.

 

Please if you have time have a read of above. it will give you an insight.

 

In rented property but working yes.

[questioner]

Easy

 

If the agreement is in the slightess bit unenforcable offer nothing!!!

 

HAK

 

That seems to be the case with most CCA stuff they have given me - nothing cast iron anyway

[stereophonicsfan]

Not sure where we stand on non-CCA applicable debts, eg overdrafts, mobile phone contracts. My dca is playing very hard to get on less than 300 pounds but not covered by CCA so a bit stuck.

[Having_A_Knightmare]

That seems to be the case with most CCA stuff they have given me - nothing cast iron anyway

 

 

Ive had 2 DC take me to Court with application forms and both have pulled out at last moment.

 

Mind you I am awaiting the next one of Hillden Security which will be great fun.....

 

HAK

[lilly white]

In rented property but working yes.

 

 

OK.

 

There is a letter which invites them to take you to court,however you must understand, that they just might.

 

So what you need to consider is would you be better off going to court or not.

 

If you call their bluff what then nothing, complete nothing.

 

It is a call imho 1 belive that once you get over that fear if there is fear.

 

What is their nothing.

 

So the Full and Final is nothing.

 

It is not the answer you seek but the questions.

 

I wish a good evening

 

The very best regards lilly white

[Bazooka Boo]

Something I found whilst browsing for some factual answers to F&F offers,

The Law – ‘Full and final settlement’ - Voltimum UK - Electrical Installation Products and Contracting

[questioner]

OK.

 

There is a letter which invites them to take you to court,however you must understand, that they just might.

 

So what you need to consider is would you be better off going to court or not.

 

If you call their bluff what then nothing, complete nothing.

 

It is a call imho 1 belive that once you get over that fear if there is fear.

 

What is their nothing.

 

So the Full and Final is nothing.

 

It is not the answer you seek but the questions.

 

I wish a good evening

 

The very best regards lilly white

 

I have only been able to pay them a quid a month so?????

 

That was before i asked for CCAs tho

[andie_303]

I did a F&F settlement with black horse - they wanted almost £600 i paid them off with £100 and my credit file marked satisfactory. I relied on them seperating letters from cheques on arrival and them cashing the cheque before actually reading the letter.

 

The admitted they only cashed the cheque cos of this and wouldn't actually have accepted this if I had wrote to ask them first - they did however honour it and marked my credit file settled in green and close the account with them.

 

I'll post you the info I found that helped.

[andie_303]

There are some instances when a cheque sent in ‘full and final settlement’ will discharge a debt, cautions Barrister Rudi Klein. This article, of great interest to all contractors who’ve suffered payment problems, was originally published in Electrical Ti

 

A contracts with B to carry out certain electrical works. A invoices B for £100. B sends A a cheque for £50 in 'full and final settlement'. A banks the cheque but, subsequently, sues B for the outstanding balance of £50. A argues that the balance is legally his.

This question has arisen in a number of cases and as recently as the case of Andrew Bracken and Ann Trickett v Graham Billinghurst [2003]. Billinghurst carried out work for a Mr.Bracken and a Ms.Trickett. Matters went to adjudication. Eventually Bracken and Ms. Trickett offered to settle for £6,000. Billinghurst sent a cheque made out by a third party - his building company, Advanced Technology Ltd - for £5,000 'in full and final settlement'. The cheque was banked three weeks after receipt. Subsequently Billinghurst was informed the offer of settlement was rejected and the clients were going to pursue the full claim. In the circumstances, said the court, Bracken and Ms. Trickett had accepted the £5,000 in full satisfaction.

The law:

A distinction has to be drawn between debts which are undisputed and those which are disputed. With regard to the former the law relating to part payment of debts was established over four hundred years ago in the case of Pinnel [1602]. Cole owed Pinnel £8-10s-0d (£8.50) due on 11 November. At Pinnel's request, Cole payed £5-2s-2d (£5.11) on 1 October, which Pinnel 'accepted' in full settlement of the debt. He then sued Cole for the balance. The court held that Pinnel would only be bound to accept the smaller sum if Cole had provided some benefit to Pinnel for this concession, or in legal parlance, consideration. In this case Cole had paid the money earlier and had therefore, provided consideration. Unfortunately he lost on a technicality.

A much more modern case is D&C Builders Ltd v Rees (1966). D&C Builders did some work for Mr & Mrs Rees. The work was done with no complaints. But, the builders did not receive the outstanding sum of £482. Months went by and the builders were experiencing financial difficulties. Eventually Mrs Rees offered £300 to settle the matter. The builders agreed to take the cheque for £300 which was honoured. They sued for the balance. Lord Denning in the Court of Appeal gave judgment for the builders. They were not bound to take the £300 in satisfaction of the whole debt because the Rees' had not given any consideration for the builders agreeing to forgo the balance.

Therefore if the amount of A's invoice of £100 is undisputed, B is bound to pay the balance of £50. A further point - the rule in Pinnel's case - that consideration is required for an agreement to accept part payment of an undisputed debt - sounds unduly harsh. Subsequently some exceptions were made. If part payment of the debt is made by a third party, a promise to accept a smaller sum in full satisfaction will be binding on the creditor (where the payment is made on the condition that the debtor is released from the obligation to pay the full amount). This is what occurred in Bracken case, the third party being Advanced Building Technology Ltd.

Amount disputed:

When a cheque is sent in 'full and final settlement' in a situation where the actual amount claimed is in dispute, it is in the interests of both sides to compromise their respective positions or, in legal parlance, achieve accord and satisfaction.

An example is Stour Valley Builders v Stuart (1992). Stour Valley Builders carried out work for Mr & Mrs Stuart. The builders sent a revised account of £10,163 after the Stuarts had disputed some of the items. Eventually the Stuarts sent a cheque for £8,471 in 'full and final settlement'. Two days after the cheque had been cleared the builders informed the Stuarts that the cheque was not accepted in full and final settlement. The builders sued to recover the outstanding balance.

It was argued in the Court of Appeal that the court should adopt the American rule that the banking of a cheque in these circumstances amounted to an acceptance that it was tendered in 'full and final settlement'. The Court refused to go along with this. Instead, it relied upon the Victorian case of Day v McLea: whether there is an agreement to accept a cheque in full and final settlement is dependent upon the creditor's conduct.

Did the creditor cause the debtor to believe that the money was taken in full satisfaction? In this case the builders had made clear, shortly after the cheque had been cleared, that it was not accepted in 'full and final settlement'. The outcome would have been different if there had been significant delay in informing the debtor. Therefore A must inform B, either at the time the cheque is presented (or shortly thereafter) that he does not accept it in 'full and final settlement'. If he fails to do this he will be regarded as having accepted the amount stated on the cheque.

Summary:

The circumstances in which you will be bound by a cheque made out in 'full and final settlement' are as follows:

• The cheque is offered in circumstances where there is a dispute about the amount owed.
  
• The offer in 'full and final settlement' of the dispute is made at the time the cheque is presented.
  
• You present the cheque in payment and it is duly honoured.
  
• At the time of presenting the cheque or within a short time thereafter you fail to inform the payer that the cheque is not accepted in 'full and final settlement'Number 4 in the above list is critical.
  

Otherwise, as the Court of Appeal explained in another case, Ferguson v Davis; '...paying in and clearance of the cheque [is] a clear and unequivocal acceptance...'

Furthermore, if you bank a cheque from a third party (as in the Bracken case) in "full and final settlement' of a sum (whether or not disputed) owed by your debtor you will have signified acceptance of it as discharge of the debt.

[questioner]

I still need to see some examples of templates over F&F letters .

 

Plus if its best to offer it yourself or via someone else.

 

Seems that F&F is the best way to escape the DCA abuse cycle of the system in many ways.

 

as I am skint any vultures who wants to nail me at court if they had the proper cca docs would win the great right to a quid a month. I think they need to be told that. they risk a lot for that would be all I could manage at a push.

 

now if it swung my way then this could happen

 

http://forums.moneysavingexpert.com/showpost.html?p=23402091&postcount=4

 

 

Edited August 12, 2009 by questioner

[andie_303]

always do through a 3rd party as was i posted above advises

 

I will post you a copy of the letter i sent to black horse - 2 secs......

[andie_303]

Dear Sir/Madam,

 

I write to you in reference to the above account number and remind you that this account is legally in dispute owing to your companys failure to provide a valid CCA despite my request being received by yourselves on March 23rd 2009.

 

Find enclosed a cheque for £133.76 for final settlement of this account.

If the enclosed cheque number xxxxxx is accepted and cashed, this is accepted on the clear understanding that my liability for this account is fully discharged and that all credit reference agencies are updated to state this account is settled in full.

 

This should be done within 14 days of the above date, if this is not agreed the cheque should be returned to me within the same timeframe.

 

Yours Faithfully

 

 

Also make sure you write on the back of the cheque only to be used in full and final settlement of acc number XXXXXXXXXX

[TheScaryOne]

Andie,

 

As a matter of interest - the amount of £133.76, what percentage of the outstanding balance was this?

 

Scary

[andie_303]

Andie,

 

As a matter of interest - the amount of £133.76, what percentage of the outstanding balance was this?

 

Scary

 

£574 was written off

 

I basically had 1 month of my agreement left to pay but they said I had deferred the repayment start by a month so owed another £1.33.76 on top of that + interest and charges from 3 late payments.

 

I thought I was being more than fair by paying the last months payment i know I actually owed but no way was I paying anymore than that.

 

I'm about to try another that balance is £1500 and i'm going to offer 20% ish

 

It is all reliant (sneekily) on them seperating cheques from letters on arrival and banking cheques without reading the letter first!

 

Couldn't happen to some nicer people me thinks

[questioner]

Dear Sir/Madam,

 

I write to you in reference to the above account number and remind you that this account is legally in dispute owing to your companys failure to provide a valid CCA despite my request being received by yourselves on March 23rd 2009.

 

Find enclosed a cheque for £133.76 for final settlement of this account.

If the enclosed cheque number xxxxxx is accepted and cashed, this is accepted on the clear understanding that my liability for this account is fully discharged and that all credit reference agencies are updated to state this account is settled in full.

 

This should be done within 14 days of the above date, if this is not agreed the cheque should be returned to me within the same timeframe.

 

Yours Faithfully

 

 

Also make sure you write on the back of the cheque only to be used in full and final settlement of acc number XXXXXXXXXX

 

Andie - a few questions here.

 

Did you send this in your name or someone elses?

 

If yours - did you put 'WITHOUT PREDJUDICE' on it?

 

Why did you want to pay up when they could not enforce this debt?

 

Cheers

 

I am trying to get the handle on the game.

 

Q

[andie_303]

Andie - a few questions here.

 

Did you send this in your name or someone elses?

 

If yours - did you put 'WITHOUT PREDJUDICE' on it?

 

Why did you want to pay up when they could not enforce this debt?

 

Cheers

 

I am trying to get the handle on the game.

 

Q

 

Hi

 

I sent in my name and my cheque however the most recent one I have just sent is with a 3rd party cheque.

 

I did not put without prejudice on it - the account was current and paid up to date therefore I had no fear of them taking me to court - if they had refused I would have paid in full.

 

I had no problem paying what i actually owed i.e. last months payment I objected to the extra charges and interest they had added. I also assumed that although they had not provided a CCA in 2 months I thought they would find it - they duely did and sent is 3 weeks after they closed me account

 

My advice for DCA purposes is = headline without prejudice and send 3rd party cheque.