Advice on negotiating with Debt Collection Agencies

[LIAM1234]

Hi

 

I have 4 debt collection agencies chasing me for debts. I am not disputing these debts and am hopefully in a situation to offer a suitable discounted final settlement with these collectors. However, I just want to make sure that everything is legit. Can you please offer any advice on the following:

 

1. How can I be sure that the debt collector is the true owner of me debt?

2. If they are and they do not have a copy of my CCA then is that the end of it or will it just get passed on to another agency to hunt the debt down?

3. If they are the true owners of my debt and can produce a CCA then how can i be sure that any discounted final settlement will be totally cleared (satisfied) against my credit rating?

4. Do you have any advice on how to negotiate discounted final settlements with debt collection agencies?

 

Sorry for so many questions and would appreciate any advice!

 

Many Thanks!

[make them aktiv runners]

1. You can only obtain as much proof as you can and hope you are right.

2. With no CCA they may pass it on. Doubtful they would do so with the thought of money coming their way.

3. Get everything confirmed in writing. Post it up here for people to double check, minus your personal details. Credit files can be marked as satisified, unlikely they would remove past data, eg default date

4. Keep to a low %, no CCA makes the lowest offer and highest bargaining tool.

[LIAM1234]

Thanks so much for the advice 'make them aktiv runners' just to clarify:

 

1: what is the most proof i can get that the debt collection agency does now own my debt? CCA or do i need more than that to safeguard myself from [problematic]?

2. I am willing to pay if i can come to an agreable discounted final settlement agreement but if they cant provide a CCA then can i trust that if I pay what we agree that the rest of the debt is written off and not come back to haunt me.

3. I will ask for a copy of my CCA with any offer of a discounted final setlement and for them to confirm in writing that the debt will be satisfied on my credit report and cant be passed on to anyone else - is that sufficient or do i need to ask for more (if they agree?)

4. So you are saying if they have no CCA they would accept less? I thought that they had no CCA then the debt is un-enforceable? I know this would be 'a bargaining tool' but how can i be sure that this would be the end of it if i paid an agreed discounted final settlement to a company that didnt have my paperwork - when i pay I want to know that Im paying the right people who can clear this debt once and for all if we can come to an agreement! Thanks so much for the advice but if you could clear a few of the questions I have it would be a great help as Im just trying to make sure that once i pay its the end of it and i can move on! Thanks once again for you advice!

[make them aktiv runners]

1. Ownership is based on assignment under S136 Law of Property Act. They must have bought the debt absolutely and be in a position to accept a full & final settlement. Must also be able to sue in their own name and you must have been informed of the assignment. You should have a letter stating assignment or possibly purchase. Personally I would want this from the seller. Also to know exactly what the assignment or purchase give them rights to, you would need sight of the actual contract between seller and buyer.

2. At least one of the former site team went this route. It was either Bookworm or Caro. Both are still members so can tell you how they have got on. The CCA is irrevelant on this question, it is knowing they are the true owner and are able to give final discharge in their own right, backed up with any agreement in writing.

3. Some-one will have a previously used letter to offer you, wait a day or two for more posters.

4. If they have no CCA there is no entitlement to receive any payment at all. For this reason you are in a stronger bargaining position to put an end to the letters and close the door so to speak.

[comebackjimmy]

Hi

 

I would like to make the following minor contribution:

 

1. Consider making it a condition that they remove any defaults with CRA's.

 

2. What is to stop them selling the debt on after they have got your payment? I don't know the answer to this but I guess a good agreement that they sign up to will go some way to protecting you.

 

3. Consider marking any correspondence you send on this subject "Without Prejudice"

 

Good luck

[Jasper1965]

Hi

 

I would like to make the following minor contribution:

 

1. Consider making it a condition that they remove any defaults with CRA's.

 

2. What is to stop them selling the debt on after they have got your payment? I don't know the answer to this but I guess a good agreement that they sign up to will go some way to protecting you.

 

3. Consider marking any correspondence you send on this subject "Without Prejudice"

 

Good luck

 

Be very clear with your conditions and insist that acceptance of payment must constitute full acceptance of any conditions attached by yourself and ensure that you have their consent in writing prior to payment.

This gives you estoppel (enforceable by a Court) in the event that they breach any of the conditions of payment.

 

If possible get a third party to send a cheque on your behalf as the debt becomes legally discharged if they cash this one (subject to conditions) whereas if you make the payment yourself the balance of the debt still exists.

 

I would have thought that "Without prejudice" would compromise your ability to use this documentation in Court in the event that you are forced to seek estoppel which can only be to your detriment.

[comebackjimmy]

Hi Jasper1965

 

Very interesting post.

 

My suggestion of "Without Prejudice" was intended to make sure Liam1234 did not inadvertently acknowledge the debt. Assuming this is important (which it may not be) I wonder how else to protect him.

[hillards]

Many template letters include a line along the lines of "I do not acknowledge any debt claimed by your company" as a disclaimer.

 

Simple advice is not to negotiate, but to check the validity of their claims. Are they legally entitled to a penny of your money? Has all the paperwork been sent to you as required? Send CCA requests and find out if they have the documents they would need to rely on in court proceedings. Don't just roll over and let them dictate, stay in control and tell them how it's going to be.

 

If they can't substantiate the alleged debt then they can't claim on it. If, by chance, they can uphold a claim, you decide how much you can pay. Otherwise they need to take it to court, and you get a judge to decide a fair amount, after hearing about your circumstances.

 

Any talk of 'full and final' needs a legally binding document that says they will remove any defaults on your credit record, that the matter is considered closed and will not be subject to further action in the future, and that it's a figure you can accept.

 

DCA's will buy debts for under 10% of the face value, so they pay maybe £100 for a £1,000 account. If you offer them £150 as F&F then they've made £50 profit, less the cost of any action/letters to date of course. They may feel that's not enough, but they took a chance on spending that £100 to buy the account in the first place.

 

Quite a few people have sat it out, to see what letters they get. A pattern emerges, starting with lots of threats nastiness and intimidation. After a while it will go to the 'legal department', another desk in the same office. After some time the offers to let you pay a lot less, usually half, of the original amount will come. By then you can be pretty sure they are desperate to get some money to pay for these letters and they repeat the offers a time or two more, before eventually giving up. Not in all case, some do get taken further, or are passed to another DCA, but that's a typical few months of action by a DCA.

 

My own thoughts are that I owed money to the original creditor, they have now written off my account with them, and have received some sort of compensation for doing that. They have taken a further amount of money from a DCA, who has bought the account and intends to take action under the provisions of the Law of Property Act 1925. (Law of Property Act 1925 (c.20))

 

This is where the matter becomes a bigger issue to me, having been on the receiving end so many times through continued ill health and unemployment. DCA's are greedy. They use nasty tactics like threats, lies, deceit, intimidation, and a blatant disregard for the laws of the land and things like FSA guidelines in dealing with (alleged) debtors.

 

I have long since stopped being impressed by the latest threatogram letter, where they've found a new word to use, or someone new signs it. I look for the usual clues like they may do this, they could do that and so on. As long as they continue to use their bullying ways, I will happily ignore them.

 

By the time they get round to the half price offers, I just assume they know they don't have a leg to stand on. If they do continue then I do a CCA request, just to prove the point.

 

I have no scruples about dealing with DCA's in this way. I see them as a bunch of chancers who are making money out of misery. My debt was with the OC, if they decided to write my account off then that's their problem. If the OC wanted me to pay, make an arrangement, or whatever, then they had their chance to do so.

 

I do not owe a DCA a penny. They need to understand this. If they have manipulated some old law to make out that they have obtained details of a debt they now allege I must pay then they should have followed ALL the rules to reach that stage. Quite often they will have failed to send a notice of assignment - s136 of the Law of Property Act 1925 is clear that this must be sent to the assignee by the assignor and that consent of all the parties shall be obtained. Such assignment is not to assign or transfer rights or liabilities, but rather to extinguish the original contract and put a new one in its place. (JENKINS v YOUNG BROTHERS TRANSPORT LTD (2005) - High Court Judgment Template)

 

Have I consented to this assignment? No, I have not. Was the notice sent to me by the assignor? No, it is usually in the same envelope as the DCA's 'welcome' letter! Therefore the new contract is invalid. It can also be shown that the transfer of data is invalid through the buyer (DCA) of the account not having the full details (CCA's etc) of the accounts they have bought, hence having to refer to 'their client' in so many cases. How on earth can they claim money from someone when they don't have anything to back that claim up - Legalised mugging?

 

DCA's are still sending out thousands of demanding letters each day. They say that bailiffs will call, they'll sell your granny, shoot your kids - without a court order they can't do anything. If you make a reasonable offer of payment, and they refuse, then they are not helping their own case.

 

I always point out, this is only my opinion in these matters, don't assume that it is legally watertight, otherwise we'd not be in this situation as the very first case would have gone to court, been thrown out, and third party DCA's would not exist!

[Guest HeftyHippo]

what you say regarding the 'assignment' is 100% correct. The letter of assignment is usually sent by the buyer (DCA) rather than the seller so it isn't valid as an assingnment. the debtors agreement hasn't been obtained in advance, so it is not a novation either.

 

So what's the legal position? If the assignment isn't valid, it suggests that the debt/contract/benefits & obligations still lies with the original creditor... who isn't chasing you. The DCA who is chasing you has no legal right to ask for payment (as the debt isn't his), and cannot enforce the debt (as title to it didn't pass as the assignment was invalid).

 

Or is there something missing? If the assignment is invalid, could it be that the DCA does own the debt (ie liability) but not the benefit (receipt of payment, and right to enforce)?

 

Seeing as these letters seem to be printed by the DCA, I'm wondering if there is ignorance of the law on their part, on theirs and the sellers, or if the seller is ripping off the DCA by allowing/causing them to believe that the DCA will be able to collect.

 

Lets face it, the vast majority of people do not understand this and simply believe what the letter says. I haven't heard of any cases where a DCA has attempted enforcement and been met with an invalid assignment defence either.

[hillards]

I haven't heard of any cases where a DCA has attempted enforcement and been met with an invalid assignment defence either.

They nearly all back down before court proceedings stage, although there are some who (ab)use the legal system to obtain CCJ's for their costs, or send out documents that look like they've come from a court, demanding I&E figures - anything they can think of to make the (alleged) debtor think they are in deep trouble.

 

It would be down to some brave soul who is being taken to court to bring this in as a defence, and see what a judge has to say. None of mine have ever gone that far.

 

If the assignment is invalid, could it be that the DCA does own the debt (ie liability) but not the benefit (receipt of payment, and right to enforce)?

...they own the liability? Could the OC then take them to court for payment...? LOL You mean they own the title, I think. As it's not been correctly assigned, it follows that they do not own anything. Agreement is not made between all parties involved, and the paperwork is issued by the wrong party - shambles is the word I was looking for here.

 

the vast majority of people do not understand this and simply believe what the letter says

Which is all they depend on - lies, intimidation, threats... A bit like me going out onto the street with some official looking letters, give them to people and have them think they have to pay me hundreds of pounds, because it says so in the letter. No time to arrange monthly payments, I want it NOW. I'm not going to do that as I am not keen on hospital food.

 

Most of what I've put sounds 100% plausible, but would need checking out properly. It comes only from my own investigations into cases and the law under which these debts are being handled.

[Guest HeftyHippo]

yes, that's the problem with many aspects of these cases - very few instances of court cases as they settle.

 

in my view, if the assignment is invalid, it suggests the OC still owes it. In some cases, eg where the OC issues a flawed Default Notice it's advantageous to the debtor for it to sell the debt as that is proof the account is closed and the flawed DN means they have repudiated the agreement. If the assignment is not valid, and the OC therefore still own the debt, their attempt to sell implies the account is closed but is not as clear cut as when the transfer of title happens.

 

Very interesting that all the 'assignments' are communicated via the buyer. Are all the creditors and DCAs so ignorant of the law or is it just that they believe we all are (admittedly, many of us actually are, sadly)?

[hillards]

Very interesting that all the 'assignments' are communicated via the buyer. Are all the creditors and DCAs so ignorant of the law or is it just that they believe we all are (admittedly, many of us actually are, sadly)?

 

They will claim that they issue them under the authority of the seller (OC), who gives them permission to have pseudo-letterheaded paper, often just a logo with no legal address or company information - wonder how valid that is in law?

 

At least when it gets to their own 'legal division' or 'solicitors' they put an address on the letter. How can I query the validity of the assignment if I am not given contact details for the assignor ?

 

Anyone could knock up a quick 'letterhead' with just a logo on, and send letters out to suggest they originated with a given company. They don't even pretend that the assignor has given them these letters in bulk, to save postage perhaps. The typeface and everything is often the same on both letters.

[shadowdog]

Hi

 

I have received a letter from a company called arrow global regarding a debt owed to lloyds bank. It states the the debt has been assigned by lloyds and all future payments should be made to them.

 

This debt has been on hold and I did contact them via OFT requesting my charges reduced. I have this week recieved a letter directly from lloyds saying that they will not be reducing the charges and if they do not here from me by the 9th March the account will be closed. Just not sure where I stand legally. Can any one help please

[Guest HeftyHippo]

shadow, you're better off starting a new thread with all your details so that people will see its a new query, and if you can, put up a scanned image of the relevant documents assigning the debt and those from the DCA, as well as any Default Notices you've had (issued under S 87 of the Consumer Credit Act, not notice of default sum)

 

Obviously, obscure any personal details.

[Guest HeftyHippo]

Thinking about this, I can't find anywhere in the Law of Property where the creditor must inform the debtor. Only that he must be informed. The creditor must write/sign the assingment, and inform the assingnee (DCA)

Edited January 26, 2010 by HeftyHippo

[Pinky69]

Not only does the creditor have to inform the debtor of assignment but it must be in writing and it must be sent by Recorded Delivery:

 

S196 4)Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor, or other person to be served, by name, at the aforesaid place of abode or business, office, or counting-house, and if that letter is not returned [F1by the postal operator (within the meaning of the Postal Services Act 2000) concerned] undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.

[theoldgit]

Keep to a low %, no CCA makes the lowest offer and highest bargaining tool.

 

Absolutely right, years ago I cleared all my debts after inheriting some money, I offered them all a payment of 90% of the debt, so a reduction of 10%, and, all bar one, they snatched my hands off. I was pretty pleased with myself at the time but I know now I could have saved even more, but that was before CAG.

 

One wouldn't accept the lower figure, so I said "no probs, I will continue paying you £5 per month", they then backed down.

Edited January 26, 2010 by theoldgit
typo

[Guest HeftyHippo]

Not only does the creditor have to inform the debtor of assignment but it must be in writing and it must be sent by Recorded Delivery:

 

where does it say the creditor (assignee) has to inform the debtor? I can't find any mention of who does the informing.

 

I'm told by another Gagger (but haven't verified it first hand) that Special Delivery is the replacement for Registered Delivery which is quoted (not Recorded) and Royal Mail advise its use where Registered is quoted in any legislation.

 

S196 4)Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor, or other person to be served, by name, at the aforesaid place of abode or business, office, or counting-house, and if that letter is not returned [F1by the postal operator (within the meaning of the Postal Services Act 2000) concerned] undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.

The argument I've seen against the necessity of Registered/Special Delivery is that the legislation says using it is sufficient service and therefore deemed acceptable even if the intended recipient doesn't receive it, but the legislation doesn't forbid or preclude any other postal service, and doesn't prescribe Registered Delivery. I interpret that as meaning that Registered Delivery will always be acceptable for enforcement reasons, whereas anything else is 'at the sender's risk' so that if received at the address but not passed to the named recipient, it will not be deemed served.

[Pinky69]

Fine, Special Delivery it is. Of course if they don't send it by Special Delivery, there is no proof you have received it. It's academic anyway because they never send them or DCAs use the creditor's letterhead and send a concocted NOA with their "welcome" letter. The law is just something to be ignored. It is just something to be used if you are arguing with a DCA that you have no proof they have any lawful right to ask you for payment.

[Guest HeftyHippo]

yep, that's right. but where does it say the Assignor has to send the notice to the debtor? I've seen that said a few times but never be able to find the statement in the legislation

[247orbital]

I'm currently cleaning up my credit file and have a dilema with HFO. The debt still has a few years to run until its SB and drops off my CR file. However.

 

I am happy to pay 10% maybe even 15% but only on the condition that it is a full and final settlement and the default is removed from my credit file. I was thinking of offering the settlement as a gesture of goodwill and not an admission of the debt as I know they can not produce a CCA anyway. People may ask why pay at all, but I consider a percentage a small price to pay to have the default removed a few years early.

 

If these DCA's had any intelligence they would work out the maths, buying debts for 2-5% of the value and being offered 10-20% as a settlement is a profit and makes business sense. What difference does it make to them to remove a default?

[Pinky69]

Law of Property Act 1925

Under section 136 of the Law Property Act 1925 (“LPA 1925”) notice of assignment must be given to the other party to a contract (i.e. the borrower) expressly in writing. There is no prescribed time limit for giving notice but the assignment is only legally valid when the borrower receives the notice.

Until proper notice is given, only an equitable assignment has taken place. An equitable assignment differs from a legal assignment in that where there is a legal assignment the assignee can bring an action (e.g. for recovery of a debt) in its own name against the borrower. On an equitable assignment the assignee would need to join the assignor as a party to the action before an action could be brought against the borrower. Alternatively, notice would have to be served in the correct manner before an action could be brought in the assignee’s name.

Section 136 LPA 1925 is silent as to how the notice should be served. The default statutory provision is found under section 196 LPA 1925. It provides that if notice is given to the other party by registered letter and is not returned undelivered, it will have been deemed to have been served. This means that whilst notice may be given expressly in writing, it will not be deemed served unless it has been sent by registered post.

Section 196 LPA 1925 refers to “registered letter”. The postal service “registered post” no longer exists. Instead, a notice should now be sent either as first class post with a certificate of posting (available through Royal Mail) or by recorded delivery; under the Recorded Delivery Act 1962 any notice which is deemed served by registered post will also be deemed served if sent by recorded delivery.

Section 196 (5) also states that its provisions extend to notices required to be served unless a contrary intention appears. In other words, if there is an express clause in the contract (which would include a lender’s mortgage conditions) that stipulates how any notices necessary under the contract are to be served, that will take precedence over the statutory provision in section 196.