Can a DCA charge interest?

[stormski]

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

if the original agreement specifies that it can be charged.

 

Hi,

 

Surely though..you made an agreement with the original creditor...so once it is 'sold' the agreement is terminated....full stop.

 

They can't have their cake and eat it..It's either their debt...

 

OR

 

they sell the debt...and no more agreement..hence no more charges...that is the final value that is owed.

 

At no point have you signed an 'agreement' with the new owner...

 

Regards,

Stormski

Edited September 11, 2011 by stormski
bad english

[BRIGADIER2JCS]

They sell the whole thing the rights benefits and obligations

of the original agreement, or simply they owned it now some one else

dooes.

[stormski]

Hi,

 

Ok...so in reality then...you want the account 'terminated'....before sale....

 

Then there is no agreement? Agreed?

 

Just a debt.

 

Regards,

Stormski

[BRIGADIER2JCS]

I think so most of these accounts seem to

be sold off at the default date without

termination.

[gezwee]

Consequence of amendments to CCA 2006 at chapter 14

 

http://origin-www.legislation.gov.uk/ukpga/2006/14/pdfs/ukpga_20060014_en.pdf

 

s.86D [page 13 of the above link/pdf] 'failure to give notice of sums in arears' and apparent creditor 'penalty' for non compliance.

 

The OP would need to decide [based on correspondence with the DCA] whether default of s.86 was probable or could be evidenced

 

Note, reference to 'owner'...... a DCA short of assignment [full legal title] would not fall into owner category.

 

Gez

[gezwee]

Sorry, should have said........ in essence, you need to question everything: assignment, assignment date, previous correspondence, previous DCA [if any] value [if any] of default fees [simple interest from day 29 only] etc etc.

 

Its long winded and hard work at times but if you ever get to sit in a court room you'll want all the ammo [stand down Brig, and apologies for earlier curt response ] available to you

 

Gez

[rhos123]

I think so most of these accounts seem to

be sold off at the default date without

termination.

what about accounts that have been charged off by the o/c then passed/ sold on to the dca muppets?

[stormski]

Hi,

 

I'm just gathering info on all of this and learning as i go along..i don't think most of it will apply to my girlfriend as her debts are relatively small...( few k )...

 

I'm working on the reclaiming charges ( apart from overdraft ) and will be paying off the 'real debt' asap to give her a clean slate ( even if the CRA's look like they're riddled with bullet holes ).

 

Vodaphone sorted....next step...Halifax credit card....

 

Once these are all sorted..i will be hanging around here trying to help out with any info i have learned from all the great information from other peeps on the site.

 

Regards,

Stormski

[BRIGADIER2JCS]

It appears to matter not, the

business practices of the creditor/ DCA / debt purchaser

are it seems irrelevant, they have a property they get

a tax benefit and sell the obligation/benefit on, and

round and round it goes.

[stormski]

It appears to matter not, the

business practices of the creditor/ DCA / debt purchaser

are it seems irrelevant, they have a property they get

a tax benefit and sell the obligation/benefit on, and

round and round it goes.

 

Hi,

 

So what happens if the account is Terminated....and then sold on...and they still try to use the 'original agreement'

 

Surely this isn't legal as the agreement has been terminated already....but the debt remains...

 

Regards,

Stormski

[rhos123]

It appears to matter not, the

business practices of the creditor/ DCA / debt purchaser

are it seems irrelevant, they have a property they get

a tax benefit and sell the obligation/benefit on, and

round and round it goes.

 

should this tax benefit be taken into account with the original amount on a debt?

[BRIGADIER2JCS]

I doubt there is any obligation for that

to happen.

Good Night,

 

Brig.

[rhos123]

I doubt there is any obligation for that

to happen.

Good Night,

 

Brig.

 

maybe a good question to ask the county court judge if and when the time arrives:madgrin:

[gezwee]

maybe a good question to ask the county court judge if and when the time arrives:madgrin:

 

A DJ will have no interest in a companies output tax, focus must be on the facts at hand and poc....... depending on value and Cpr regime this will have to be argued on probability or evidenced.

 

gez

[postggj]

Is s.86 not the effective section?

 

Gez

 

if a dca has not sent a notice of default sums as to s.86

be it they can or cannot charge interest

 

any interest would be unenforceable

[stormski]

Hi,

 

Can you elaborate a bit?

 

Cheers,

Stormski

[gezwee]

Stormski

 

Is that pointed to me or post??

 

Gez

[stormski]

if a dca has not sent a notice of default sums as to s.86

be it they can or cannot charge interest

 

any interest would be unenforceable

 

Hi,

 

That bit...can you explain what you mean...in quite a bit more detail in laymen terms so that people can understand ( that does mean me too! )

 

Regards,

Stormski

[gezwee]

Hi Stormski

 

Its in my link in earlier post, have a good read of s.86, It details when an owner/creditor MUST give notice of sums in arrears and defaults, it also details maximum/minimum period of notice [fixed and running credit] along with penalty if they do not comply. In basic terms, no statement at month 6, no encumbering of interest [rolling 6 months]

 

It is highly unlikely that a DCA has full legal title [ever], most, if pressed in litigation will present an undertaking from the OC rather than attempt to evidence assignment.

 

Simple interest on default is also effective, hence you will often see claims on Cag where a DCA will err on the side of caution and try to apply simple interest from day 1 if they are unsure or cannot evidence default fees/dates and their impact on total balance.

 

Gez

[stormski]

Hi,

 

Thanks for that..it makes it a lot clearer...It also shows that a lot of 'underhand' work is going on......regarding creditors / DCA's too.

 

I bet most SAR's are 'vetted' before they go out...

 

Regards,

Stormski

[gezwee]

That would be the safest bet you'd ever make

 

Gez

[Ricardino]

Probably irrelevant to your thread great tho it is.

I was reliably informed by a DCA that they cannot charge interest

once the loan period has ended.

[fightingback99]

Excellent thread and question . And one people prob wonder about. Espec if according to Brig creditors are selling 'live' accounts on token payments to DCA's who can add interest if agreement allows it. . Peeps won't stand a cat's chance to ever get out of debt. Ex they repay £2 and the DCA adds £20 interest every month.

 

Could people use BCOB legislation against the original creditor in a case like this ? Creditor obv knows person's in financial difficutly if they're making token payments. Instead of treating them fairly they've put the person into spiralling debt by selling the account to a DCA with further interest allowed. Ber they get more money from the DCA for this type of account then.

 

How would a T&C which allows further interest be worded. Crapbot just use ' account can sold without prior notice etc to a 3rd party' to try and justify doing it. Never been able to get full set or correct T&Cs using either a SAR and CCA request to orig cred or the DCA.

 

Thought defaulted accounts couldn't have further interest added. So Re - if a T&C does allow interest after default it can't be more than interest rate stated in original agreement. How does that work with a credit card, as terms would say interest rate can be varied? Would it be the last interest rate in use jsut before sale?

 

Sorry for the questions, just trying to understand this.

[Bazooka Boo]

IMO if an OC 'or' a DCA demands payment in full, then that terminates the agreement you originally signed with the OC.

 

Therefore NO interest or charges can be added as NO agreement exists for them to do so, until, if ever, it goes to court and then stat % is applied by the DJ.

 

The process of agreements is that, when you fail to make the agreed payment, you enter a default period,

the creditor then issues a DN and explains how you can rectify said default,

you fail to rectify the default in the manner they have outlined, and then in accordance with the DN,

the account is terminated, so once the account is terminated, it no longer exists, so even if the T&C's state

that interest will still be charged, HOW are they going to do that when no agreement exists?

 

I may be wrong, but I'm pretty confident I'm in the right ball park...

[Duffers Mum]

Subbing..as i'm in this position with Cabot..they have been adding interest at approx £100 per month and my debt has increased loads...with no chance of me ever repaying as unemployed with a disability which means finding work (especially in the present economic climate) is virtually impossible. I offered a 10% f&f which somebody in the family would have lent me, but it was turned down with them saying they'd only accept what amounted to approx 70% of an outstanding balance which is £1200 more now than when they bought it...(bangs head against wall!)