Morgan Stanley/Cabot Question

[veryweary]

Morgan Stanley(Goldfish) sold my OH's account to Cabot without ever issuing any default notice or notice of assignment in 2008.( it had previously been on a minimum repayment arrngement paid to Morgan Stanley via CCCS since 2004)

 

Cabot have now issued OH with an official default notice quoting Section 87(1) in 2009 on Cabot yellow headed paper and now placed a new default with start date of Oct 2009.

 

Should Morgan Stnaley not have defaulted account before sale to Cabot?

 

Is this legal and correct for a debt collector to issue a default notice on an account they have bought from a creditor.?

[angry cat]

Only the Creditor can serve a DN under s87.

 

Thus it depends upon how the account was assigned;

absolute or,

equitable.

 

And, that is always the $64,000 question, especially with Cabot.

[Fester Tester]

Did Cabot's default notice state what needed to be done to remedy the so-called breach, and give a timescale by which it should be done?

[angry cat]

If it were me I would be making two SAR s one to MS, the other to Cabot.

 

Firstly, you need to ascertain as to whether MS Defaulted and Terminated the account and;

whether the account was legally assigned to Cabot.

 

Cabot should not be changing the original date of default on your CRA credit files;

a default should only remain on the files for a maximum of 6 years.

 

AC

[veryweary]

Thanks for your help, quite confused about this, and wondering if Cabot have screwed up by issuing this?

The dates are ok as they allow 21 days, amount is for about 40% of alleged total,. Considering it's been in arrears since 2004 seems wrong. In addition they're now sending OH Default Sums notices like a real creditor would do, and I didn't think Cabot were a creditor?.

 

Account was bought along with hundreds of other goldfish accounts last

summer. OH has definitely never recieved a Default Notice from Morgan Stanley, or any letter to say it had been sold to Cabot, other than the generic Cabot 'representation' letter of what the assignement would have looked like. Also thought if it was only equitable then Morgan Stanley would need to issue , or be named on the Default Notice??.

 

As well as this, Cabot put a delinquent (not default) record on OH's credit file in 2008 when they bought the account. So Cabot have now put on 2 records 1 year apart. Can't find any record of Morgan Stanley putting default marker on credit file.

 

Had wondered if this was an effort by Cabot to try and mislead OH into contacting them. Account has been in dispute with Cabot since last year and no payments have been made since then, as they have been unable to provide an enforceable CCA .

[angry cat]

Consumer Credit Act 2006 - BIS

[Fred Bassett]

I'm interested in this because my credit file shows I'm about to get defaulted by Cabot yet I've already been defaulted by MS/Goldfish. Like you, I didn't receive a default notice.

 

Fred

[Fred Bassett]

Looking back, I wasn't defaulted by Goldfish. My credit file is marked 'DM' for debt management programme and I misread this. I'm still interested on how it works out though.

[veryweary]

Only the Creditor can serve a DN under s87.

 

Thus it depends upon how the account was assigned;

absolute or,

equitable.

 

.

 

Thanks angrycat. Can you tell me which it would need to be for this Cabot Default Notice to be correct and legal under s87(i) Absolute or equitable?.

 

Will SAR Morgan Stanley to get as much info as I can.

 

Hi Fred Bassett, let me know how you get on with yours.

[angry cat]

Thanks angrycat. Can you tell me which it would need to be for this Cabot Default Notice to be correct and legal under s87(i) Absolute or equitable?.

 

Will SAR Morgan Stanley to get as much info as I can.

 

Hi Fred Bassett, let me know how you get on with yours.

 

To be honest, I find it very odd that MS nor, Barclays did not themselves serve a DN under s87 and then Terminate?

 

If Cabot are now the Creditor, the Assignment must be absolute.

 

As ever, with Cabot there is much more to this, than meets the eye!

 

Yes, definately make a FULL SAR to MS;

any and all historic data that relates to you and the account.

[patrickq1]

y not issue a section ten s.10

[Fester Tester]

Yes, assignment is absolute. However, Cabot are not legally obliged to continue with the same payment arrangement as you had.

 

But. Can they either prove they have the right to payment? And if so, is it enforcable? The usual advice... CCA them ETC, ETC, which may put you in a strong bargainisg postion.

 

It may also be useful to have a squint at something that their CEO published a while back...

 

Debt Purchase: An ethically balanced future

The times of plentiful credit being offered to anyone looking to borrow, regardless of their credit history, are behind us. Many of those that over-borrowed when times were good are now struggling to repay their debts. The balancing act that debt purchasers must play is to treat customers ethically and fairly at all times, while still recognising the moral responsibility that debtors have to pay their debts.

 

Purchasers can integrate the ‘personal touch’ into debt recovery by offering a range of options on repayment terms, waiving interest or even writing off a large part of the balance. Established debt purchasers can utilise their databases to access historic payment information to segment their portfolios to ensure that the most appropriate strategies are used to maximise response and cash collected.

 

It might be worthwhile quoting this to them if things start to get sticky.

[veryweary]

y not issue a section ten s.10

 

Thanks patrick, sent the section s10 notice last year, usual Cabot just ignored it.

 

Fester Tester - Asked for CCA, last year, all they sent was a tiny microfiche copy with print so small I'd need the Hummel telescope lens to read it. .

 

Bit disappointed if this Default is legal, had planned to report them to OFT for sending misleading documents.

 

Had asked a laywer about this and she felt it was most irregular for a debt collector to issue a default under s87, and to question Cabot about this. OH wants to leave that until Cabot issue court papers.

 

Interestingly Cabot have not added one penny to alleged account. Would have thought that if they were the original creditor now they would have been adding loads of interest and charges while they had the chance.

 

If nothing else it's highly amusing for Cabot to threaten OH with a debt collector:)

[patrickq1]

i dont think cabot would want to compound the fact that they are in the wrong hence no intrest , Subject Access Request to MS;

yes a full history of all data £10.00 payable for this ime afraid ,but i doubt if you will see any aggreement except an application form which is what it says an application only subject to a deciscion and a contract for the card ,MS ver rarely sent out any contracts in there haste to get cards out and nine out of every ten had found ppi added to their cards and the ppi was about as much use as cant repeat what i think just lets say better of buying bog paper every week,the repayments never ever covered the loan /payments of the card all the repayment on ppi did was keep abreast of the next repayment meaning if you had claimed on five thousand then after 22 months the debt would be roughly aBOUT 6,900 ...THEY DEFAULTED ME TWICE DURING RPYMENTS BY THE INSURANCE CO because the insurance co were late paying that was in 1991 yet it is still on my credit files i am aout to start my action i am just awaiting the fso to start there action against them long wait been 9 months now ..so start with Subject Access Request to MS;

then get back to us als bear in mind start with ACCOUNT IN DISPUTE good luck

patrickq1

[spartathisis]

Cabot will be recording the interest, usually 12%, but not adding it to your acc yet, sneaky;) They will claim the assignment is equitable, but in reality it is absolute. Hence the adding of interest.

 

Is there a legal requirement for an account to be defaulted and terminated before assignment? I dont think there is, the T & C's I have been sent from creditors all state the account can be assigned, nothing says after default n termination. This would then mean Cabot can issue a DN as one has not already been issued for the debt in the past.

 

I have had no interest added to a Cabot account for 7yrs until I sent a SAR and said the account was in dispute, they added £1700 on an alleged debt of £8000, equal to 60%pa in the time scale used.

 

Crackbot are the lowest of the low, they give an air of respectability, but ignore the law and hide behind the bits they want to quote. Have a look at some of the other Crackbot threads to see how bad they are. You have now been crackbotted:)

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/223570-cabot-financial-dealing-cabot-3.html

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/73598-dealing-cabot-101-cabot-4.html

 

http://www.consumeractiongroup.co.uk/forum/dca-legal-successes/36665-cabot-again-urgent-help-101.html

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/95027-cabot-county-court-claim-23.html

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/115280-useful-information.html

[patrickq1]

my account was sent back to MS by goldfish they wanted nothing to do with it .....s i cannot see it leaving there offices except to say ive had altogether 5 defaults for the same debt from 5 different DCAs all wentback to MS reason is i ve sent them all packing ...just waiting tor the oft to act now and fos its in oth their hands ,MS had a policy of destroying data ie application forms on the majority pre 2002 but some aplication forms were kept ?

[spartathisis]

I had a Goldfish account pre MS (HFC Bank), that was sold to TBI Financial 9yrs ago. All TBI could provide was an app form, HFC had no record of me nor any docs. Most CCA's were micro-fiched and then destroyed to save space, so there will be few about, I have read that few before 2004 can be produced.

 

There should only be 1 default, but if the debt has been sold the name can be changed to the current holder of the debt. If not then I would complain to the ICO and the CRA's over the wrong use of data and its recording.

[veryweary]

Cabot will be recording the interest, usually 12%, but not adding it to your acc yet, sneaky;) They will claim the assignment is equitable, but in reality it is absolute. Hence the adding of interest.

 

Does that not mean Cabot have shot themselves in the foot by issuing a Default Notice then.? As they can't add further interest after termination?

 

Also if they had wanted interest added, would they not have had to include that in the figures in their Default Notice to be able to claim it later in a court case?

 

The figures on the Default Notice say the full alleged balance is £2400 (which is less than alleged Morgan Stanley figure), but it only asked for £1030 to be paid to satisfy the Default. No idea where that figure came from. In the Default Sums notice they sent a month later the alleged arrears had went up to £1200. None of these figures include any added interest or charges?.

 

Thanks for the Cabot thread links.

[Fester Tester]

Since you CCAd them earlier, and they appear to have failed there (impossible to confirm without sight of the agreement obviously), then I can see no good reason to pay them a penny.

 

The default is obviously contentious. And I am wondering if this is a new Cabot tactic: issue default notice, scare punter into making any kind of payment at all, further down the line they issue another default notice, and THAT stays on your file for 6 years. And so it goes on... your credit file trashed for decades.

 

Ignore my post earlier quoting Mr Maynard. This seems like trickery on a grand scale.

[spartathisis]

Have they, Cabot, sent a termination letter? If they havent then they can issue DN's as many times as they like until they get it right:( This also means they can add the interst on at any time, but not above what was being charged by the OC at the time of assignment.

 

They wont add interest or charges to the DN as they will know they could stuff themselves if the charges are found to be unlawful.

 

Send them a letter stating you do not acknowledge the alleged debt and the account is still in dispute as they have not provided you a copy of the CCa as is your legal right. Make it short and sweet. There is very little you can do at this stage with regard to the DN being reported to the CRA's, DCA's are a pain for doing what they want with impunity.

 

http://www.consumeractiongroup.co.uk/forum/legalities/20118-default-hell-23.html

[patrickq1]

There should only be 1 default, but if the debt has been sold the name can be changed to the current holder of the debt. If not then I would complain to the Information Commissioners Office and the CRA's over the wrong use of data and its recording.

 

what a waste of time complaining to ico ive four complaints in with them since 2006 nothing has come of it YET about to do another

[Rhia]

I would still complain to them though - frustrating though it seems. I would also complain to the OFT and the FSA. I also think more of us should complain to our M.P.s

 

I suspect the DN is a sly way of attempting to make you settle up. They claim they purchase the rights but not the responsibilities to these debts and yet they report to CRAs -which is a responsibility.

 

If they cannot produce a properly executed agreement then you have not given your explicit permission for MS to assign your debt to a third party nor for a third party to process your personal information.

 

I also think Cabot is acting on the recent test case in London where the Judge said a default could be registered - but in that case it was the OC and the agreement was enforceable. It's their pick and mix approach to the law.

 

The sooner Cabot and their ilk go out of business the better.

[tamarindo]

I would still complain to them though - frustrating though it seems. I would also complain to the OFT and the FSA. I also think more of us should complain to our M.P.s

 

I suspect the DN is a sly way of attempting to make you settle up. They claim they purchase the rights but not the responsibilities to these debts and yet they report to CRAs -which is a responsibility.

 

If they cannot produce a properly executed agreement then you have not given your explicit permission for MS to assign your debt to a third party nor for a third party to process your personal information.

 

I also think Cabot is acting on the recent test case in London where the Judge said a default could be registered - but in that case it was the OC and the agreement was enforceable. It's their pick and mix approach to the law.

 

The sooner Cabot and their ilk go out of business the better.

 

Hi

 

if you are eferring to the PHILLIP McGUFFICK

Claimant

- and -

THE ROYAL BANK OF SCOTLAND PLC

test case, oct 2009, according to the judge and high court decision the judge said :

 

quote

 

"

 

1. Given that I have concluded that the continued reporting to the CRAs during the period of non-compliance is legitimate, does not amount to enforcement and does not require to be qualified by some reference to the agreement being currently unenforceable, this argument fails at first base. There is simply no basis for the contention that the data is not being processed fairly and lawfully. The processing of the data by sharing it with other financial institutions through the CRAs, pursuant to the Principles of Reciprocity, is clearly in the legitimate interests of the bank, the CRAs and other financial institutions, for all of whom the governing principle is that the sharing of data has the aim of promoting responsible lending. "
   
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    so it just about data processing the data even though the agreement is unenforeceable...
    
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20. there is a thread about this, http://www.consumeractiongroup.co.uk/forum/bank-charges-finance-industry/225417-high-court-decision-debt.html
    
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[Rhia]

Yes it is this one. Thanks for posting it here. It's an interesting judgement and have already seen it being "twisted" to suit DCAs own purposes.

 

The comments which follow in this thread sum it up.

[angry cat]

STATEMENTS TO BE PROVIDED IN RELATION TO REGULATED AGREEMENTS

 

Section 6: Statements to be provided in relation to fixed-sum credit agreements

 

23 Section 6 inserts a new section 77A after section 77 of the 1974 Act. Section 77A will require creditors in regulated fixed-sum credit agreements to provide debtors with annual statements in the specified form, the first of which is required within one year of the day after the date on which the agreement was made.

 

24. If a creditor does not give the debtor an annual statement when required to do so, then he is not entitled to enforce the agreement during the period of his non-compliance and the debtor is not liable to pay any interest during this period. The debtor is also not liable to pay any default sum (see note in respect of section 18 below) that would have become payable during the period of non-compliance or would have become payable after the end of that period in connection with a breach of the agreement occurring during that period. A creditor will not be required to give the debtor an annual statement if there are no further sums payable under the agreement.

 

Section 7: Further provision relating to statements

 

25. Section 7 inserts a new section 78(4A) after section 78(4) of the 1974 Act. Section 78(4) of the 1974 Act requires creditors to issue statements to debtors setting out specified information in respect of running account credit agreements at intervals of not more than 12 months. Regulations made by the Secretary of State under the new section 78(4A) may require creditors to include specified information about the consequence of failing to make repayments, or only making minimum repayments, in statements issued under section 78(4) of the 1974 Act. The new subsection (3) makes provision for the giving of statements under sections 77A (inserted by section 6 of the 2006 Act) and 78(4) of the 1974 Act where there is more than one debtor to whom credit is provided. If there are two or more debtors, a debtor may provide a dispensing notice to the creditor so as to mean that the creditor is not obliged to provide a statement to that debtor. However, dispensing notices will not be effective if that would mean that no debtor will receive a statement under section 77A or 78.

 

DEFAULT UNDER REGULATED AGREEMENTS

 

Section 8: OFT to prepare information sheets on arrears and default

 

26. Section 8 inserts a new section 86A at the beginning of Part 7 of the 1974 Act. Section 86A requires OFT to prepare and publish information sheets for debtors and hirers about arrears and default. A creditor or owner must give a debtor or hirer an arrears information sheet at the same time as a notice of sums in arrears in accordance with new sections 86B and 86C inserted by sections 9 and 10 (see below) and a default information sheet at the same time as a default notice (in accordance with section 87 of the 1974 Act).

 

27. The information sheets will set out information to help debtors and hirers who are in arrears or default (e.g. information about the legal consequences of the debtor's or hirer's general situation, debt management options and the contact details of advice providers).

 

Section 9: Notice of sums in arrears under fixed-sum credit agreements etc.

 

28. Section 9 inserts a new section 86B after the new section 86A (inserted into the 1974 Act by section 8). Section 86B provides that creditors and owners must give to debtors and hirers notices of sums in arrears in respect of regulated agreements that are fixed sum credit agreements or hire agreements. A creditor or owner must give a notice in the specified form, including an arrears information sheet, to a debtor or hirer 14 days after a point in time where:

 

 

the debtor or hirer is required to have made two (in the case of agreements with a repayment interval of more than one week) or four (in the case of agreements with a repayment interval of one week or less) payments under the agreement before that time;

 

 

the total sum that has been paid by the debtor or hirer under the agreement up to that time is less than the amount that he is required to have paid at that time;

 

 

the amount of the debtor's or hirer's shortfall is no less than the total of the last two (in the case of agreements with a repayment interval of more than one week) or four (in the case of agreements with a repayment interval of one week or less) payments required to have been paid under the agreement before that time subject as set out below;

 

 

the creditor or owner is not already required to provide the debtor or hirer with a notice of sums in arrears in relation to that agreement; and

 

 

there is no sum payable by the debtor or hirer under a judgment given before that time in relation to the credit or hire agreement.

 

Thereafter the creditor or owner will be required to give to the debtor or hirer a notice of sums in arrears at intervals of six months until he ceases to be in arrears and has paid all sums of interest or default sums that are payable in relation to his arrears, or a judgment is made in relation to the sums payable under that agreement.

 

29. In the case of agreements with repayment intervals of one week or less made more than 20 weeks before the day on which the debtor or hirer is required to have made the most recent payment under the agreement, the amount of the debtor's or hirer's shortfall is calculated on the basis only of payments missed in the period of 20 weeks ending with that day.

 

Section 10: Notice of sums in arrears under running-account credit agreements

 

30. Section 10 inserts a new section 86C after the new section 86B inserted into the 1974 Act by section 9 of the 2006 Act. Section 86C requires that a creditor must give to the debtor notices of sums in arrears in respect of regulated agreements that are running account agreements. A creditor must give to a debtor a notice in the specified form, including an arrears information sheet after a point in time where:

 

 

the debtor should have made at least two repayments before that time;

 

 

the last two payments required before that time have not been made;

 

 

the creditor has not already been required to provide the debtor with a notice of sums in arrears in relation to either of those payments; and

 

 

there is no sum payable by the debtor under a judgment given before the time in relation to the credit agreement.

 

31. The creditor must give the notice at a time no later than the time that he is required to give the debtor the next regular statement due under section 78(4) of the 1974 Act.

 

Section 11: Failure to give notice of sums in arrears

 

32. Section 11 inserts a new section 86D after the new section 86C (inserted into the 1974 Act by section 10). Section 86D sets out the consequences for a creditor or owner if he fails to give a notice as required by sections 86B or 86C. If the creditor or owner fails to provide a notice of sums in arrears when required to do so, then during the period of his failure to provide the notice (i.e. from the date that it was required to be given until the end of the day on which it is eventually provided), he is not entitled to enforce the agreement. In addition, the debtor or hirer is not liable to pay any interest that relates to the period of the creditor or owner's failure, nor is the debtor or hirer liable to pay any default sum (see the notes in respect of section 18 below) which becomes payable during that period.

 

Section 12: Notice of default sums

 

33. Section 12 inserts a new section 86E after the new section 86D (inserted into the 1974 Act by section 11). Section 86E applies to situations where a debtor or hirer under a regulated agreement incurs a default sum (as defined by section 18). A creditor or owner must give the debtor or hirer a notice in the specified form when a default sum becomes payable as a consequence of a breach of the agreement. The Secretary of State has the power to provide that this only applies where the default sum exceeds a specified amount.

 

34. A creditor or owner may only require a debtor or hirer to pay interest in connection with a default sum 28 days after the day the notice was given to the debtor or hirer. If the creditor or owner fails to give a notice to the debtor or hirer then he is not entitled to enforce the agreement until he gives the notice to the debtor or hirer.

 

Section 13: Interest on default sums

 

35. Section 13 inserts a new section 86F after the new section 86E (inserted into the 1974 Act by section 12). Section 86F provides that a creditor or owner may only require simple interest to be paid in respect of default sums (see notes in respect of section 18 below) payable by the debtor or hirer, including sums payable under non-commercial or small agreements (see definitions in section 189(1) of the 1974 Act).