Can a DCA charge interest?

[hatesdebt]

Opinions seem to vary on this and despite some serious googling and even a few searches on here, there seems to be nothing which is actually definitive.

 

If the dca does NOT own the debt, it seems they cannot add interest.

If they DO own the debt, the general opinion is that they can only charge it, if the original agreement has the provision to do so, if sold on to a third party (and generally) the agreements don't.

 

This seems to be a common question asked and with idiots like Cabot charging 12%, I think it's vitally important to have a definitive answer to this.

 

Do you guys agree?

[postggj]

You are 100% correct

 

cabot are idiots

 

EVEN THOUGH MR MAYNARD HAS GONE

 

THE CABOT FAN CLUB IS STILL GOING STRONG

 

just ignore them

[jdes26]

Once the debt has been passed on with an official notice of assign ment

and a proper dn has been issued then the debt has been officially terminated

and no interest can be charged

[hatesdebt]

Crapbot don't even explain in what context the 12% is charged. Monthly / APR? etc.

 

You really couldn't make it up with these moron dca's......

[BRIGADIER2JCS]

If a debt has been sold with all the rights benefits

and obligations of the original agreement if the terms

and conditions of the original agreement allow for interest

to be charged then it can be so charged at the rate specified

in the agreement.

[postggj]

But it depends if the agreement has been terminated prior to sale

 

as stated before

 

say barclaycard sell a debt to a dca, the dca then becomes the creditor

 

where the dca slip up is a dca cant give or issue a credit card

[hatesdebt]

Thanks Brig,

 

But this is where you have the confusion arising. There are others that say interest can only be charged if the original agreement has that provision if the debt is sold on?

[postggj]

Depends if the debt has been defaulted and terminated prior to sale

 

dca now as a Rule buy debts with an account still live

[hatesdebt]

.....Not withstanding the fact that many people will receive a DN (some compliant and some not), but NEVER receive a TN?

Although, I know some (inc me) that receive a letter from the OC saying you've done this / that / defaulted etc and a load of other blurb, with a line added "we have terminated the agreement" (which is not a proper TN, No?)

[dadofholly]

Thanks Brig,

 

But this is where you have the confusion arising. There are others that say interest can only be charged if the original agreement has that provision if the debt is sold on?

 

If it is not stated in the agreement then they can not charge it.

If it is in the agreement then they can only charge the amount stated in the agreement, unless you have recieved a prior variation to the agreement. (They must provide evidence if an agreement has been varied - and they can only charge you from the date they notify you).

 

Regardless of the above If a DCA buys an agreement they can only charge interest from the date that you are notified of the assignment.

 

Any company who charges, and claims interest, to which it is not entitled is commiting an act of fraud and should be reported to the OFT immediatley.

[hatesdebt]

Thanks doh,

 

But I'm still confused.

Are you confirming that the original agreement has to have a specific provision, that if the debt is sold on to a third party, that the third party can charge interest?

[Bazooka Boo]

Just to throw another spanner in the works.....as usual!

 

I am of the opinion that....

My agreement is with the OC, if I default and it is passed onto another third party, who then demands full and immediate payment, then that original agreement is now dead.

 

Therefore, I am only liable for the amount up to the time I was asked for full payment, once that happened, then no further interest or charges can be applied as the original agreement no longer exists....

[blueboy1]

Reading this Tread, I thought I would recheck my 3 Cabot Accts. One of them is charging interest.

Cabots balance Dec 2006 was £3,418.32

Now the balance is £4748.91

No mention of interest charged, waiting for CCA from them, just sent dispute letter.

Interesting read though Bazooka Boo.

[stormski]

Hi,

 

I too was wondering about this...stinks of a profiteering racket....similar to the banks...funnily enough.

 

I wonder if we can ever get a concise final answer....

 

Regards,

Stormski

[dx100uk]

surely............

 

if the agreement has been terminated by anyone [typically the OC] then no int can be charged by anyone as the agreement and its T&C's are no longer in-force.

 

a 'buyer' cannot automatically or by default assume any rights to charge anything let alone interest.

 

as stated this is fraud, any agreement they 'assume' is in force has not been signed by the payee.

 

dx

[stormski]

surely............

 

if the agreement has been terminated by anyone [typically the OC] then no int can be charged by anyone as the agreement and its T&C's are no longer in-force.

 

a 'buyer' cannot automatically or by default assume any rights to charge anything let alone interest.

 

as stated this is fraud, any agreement they 'assume' is in force has not been signed by the payee.

 

dx

 

Hi,

 

Ok...i have another few questions....

 

1) Is it not best then to just let the original creditor sell it on...then SAR for final balance....which is what is owed....and sit and wait?

 

2) Can the final balance via this be used in a court of law if it ever does get to a court case...hence the 'new owners' are taking you to court for final balance and illegally added charges....? So part of the defence is that this is a hiked up balance..not the real balance.

 

3) I'm not advocating to evade...i just think ultimately...if my girlfriends creditors ( which are few and not for a lot of money ) say 'bugger off' effectively...and it gets to the £1 a month stage ( it's started as £5 a month of which i will be paying ) and she's not got back on her feet....best to just leave it at that and wait...at the £1 a month part.If it goes to court then she has been paying...and it is then them that are being unreasonable...( thanks bazooka for the £5 starting tip ).

 

4) If it does get sold on...and you continue with your payments with new 'owner' ( ****** ) and they have no rights to add illegal charges...then you are reducing the debt....( in theory ).

 

Feedback appreciated..as always.

 

Regards,

Stormski

Edited September 9, 2011 by stormski
Another question

[hatesdebt]

A shameless bump for some more feedback...

 

Thanks for all the input so far.

 

The problem as I see it...

 

A dca buys a debt for lets say £1k, which has a face value of £10k.

They are only out of pocket by £1k, so they are charging you interest on £9k which they never lent to you!! - shameful!

 

Something definitive would be great, as we would then be able to tackle these **** with their "unlawful" charges. Not only that, there could be a huge influx of complains going off to the oft, which is always a good thing against these companies.

 

Thanks all

[BRIGADIER2JCS]

They can IMHO can only charge interest after the purchase of the debt

if the original agreement specifies that it can be charged.

[hatesdebt]

Brig,

 

Thanks for your continuing input on this subject.

[gezwee]

Is s.86 not the effective section?

 

Gez

[BRIGADIER2JCS]

Not much point in posting that, unless you explain for the OP.

[gezwee]

CCA 2006 s.86; notice of sums in arrears and interest thereon.

 

Gez

[BRIGADIER2JCS]

And????

[gezwee]

And????

 

Read it !!!!!!!!!!!!1

[BRIGADIER2JCS]

The purpose of this forum is to

help others not to show that you

can quote sections of acts of Parliament

without explaining it to the person

seeking advice, to do this is pointless.

BTW I know it you pointed the OP to the

section of CCA 2006 the least you can do

is explain it to them.