partial settlement v full and final

[Kraken1]

I think you could touch him with a barge pole if you did it repeatedly and with 'enthusiasm'.

[diddydicky]

Quote "he takes the 10% plus the 350)?/

 

I have not been to one of these meetings but let me guess at what is happening here:-

 

first he requires a copy of the agreement?

 

does he make a charge for obtaining it for you if you have not got it

 

Having got the agreement he ONLy agrees to buy those which are clearly defective?

 

if so then this would clearly be just a variation on the "we can get you debts written off" [problem]!

 

If this is the case he is probably relying on

 

a/ getting an upfront fee for checking out the agreement (like all the others)

 

 

b/ if his company buys the debt how do they buy it? if he prepared to actually give you cash up front for it (i very much doubt it) or do they agree simply to take a "cut" when it is disproved?

[diddydicky]

from their website it appears that YOU pay them FEES" up front

 

oh yes- and WHEN and what does this outfit actually pay YOU

 

 

"The benefit to debt owners like you is that the transfer is almost immediate; as soon as the sale documents are signed and the administration and transfer fees are paid, within about two weeks you would have transferred your rights to us, and all rights will pass to us".

[diddydicky]

"Through our personal experience (click here for proof), we can provide this service. There has been lots of talk in the past about loopholes which were incorrect; what we can guarantee is a vigorous legal challenge on your and our behalf."

 

if they have bought the debt and assumed the rights in it what is all this "on your and our behalf" crap

[diddydicky]

they show this as their successes:-

 

Our Successes

 

Legally Unrecoverable...

 

Agreement

Amount Written-Off and Legally Unrecoverable

Date

HSBC Credit Card

£9,381

14 Apr 2005

Capital One Credit Card

£1,600

01 Jun 2005

Barclaycard Business

£5,308

03 Mar 2006

Halifax Credit Card

£11,046

19 Jan 2007

MBNA Credit Card - Court of Appeal

£5,296

14 Mar 2007

MBNA Credit Card - Court of Appeal

£4,161

14 Mar 2007

HSBC Overdraft

£2,422

Jan 2008

HSBC Flexi-loan

£2,087

Jan 2008

HSBC Credit Card

£1,850

04 Dec 2007

Bank of Scotland Credit Card - Default Charges

£150

06 Dec 2007

Halifax Credit Card - Default Charges

£505

06 Dec 2007

CapQuest Ltd (Egg) Credit Card

£3,205

06 Jun 2008

American Express Loan

£11,000

25 May 2007

American Express Credit Card

£10,350

13 May 2008

Car Finance

£9,940

03 Apr 2007

Egg Loan

£19,310

May 2008

Credit Card

£2,972

13 May 2008

Halifax Credit Card

£12,220

13 May 2008

Total

£112,803

 

 

pity they forgot to say that it cost them 120,000 to do so!!

[fermi]

they show this as their successes:-

 

Our Successes

 

Legally Unrecoverable...

 

Not exactly impressive.

 

What about a list like that for CAG? Achieved without any obviously false legal claims?

 

HOW many times longer would that be?

[pedross]

Firstly they have the £350 upfront.

 

Then there is the 10% (I think it's 20% if you pay in installments)

 

Finally, they complete all the legal paperwork and buy your debt for £1.00

 

In most of the advertising I have seen they say it takes about 14 days, I believe, which straight away starts the alarm bells ringing.

 

The fact is that if they are only offering to buy unenforceable debts it is not much different to any other claims management company, except that they are more expensive than many.

 

I believe the main issue is that by encouraging people to stop paying at an early stage there will be more defaults issued to people with otherwise good credit records.

 

In addition, I agree with what has been said before and that is the lender is the person who needs to agree with the assignment as they are the ones who own the debt.

 

It appears to be just another twist to what we are doing here, but more expensive and probably under investigation from the OFT if their announcements can be relied upon.

[diddydicky]

not only that but they KNOW FULL WELL that they have not in fact bought the debt and that the original creditor will not recognise the fact and still pursue the debtor, so basically it is a total con

[ploni2007]

Yes - the have legal costs of £120k !!

 

This is what they do: They legally buy your debt for £1.00. They then charge you a transfer fee of 10%. It sounds really good. Clear your debts for 10% of the value - I would definately have some of that. My problem is that I don't trust them. How can I sell this product to my clients when I am pretty sure it is going to blow up in the very near future ?

[diddydicky]

Yes - the have legal costs of £120k !!

 

This is what they do: They legally buy your debt for £1.00. They then charge you a transfer fee of 10%. It sounds really good. Clear your debts for 10% of the value - I would definately have some of that. My problem is that I don't trust them. How can I sell this product to my clients when I am pretty sure it is going to blow up in the very near future ?

 

the point being that they DONT legally buy your debt!! the purchase is not worth the paper it is printed on

 

but why should they care you have paid them 10% of your debt for a return of your quid and you STILL are the owner of the debt!

[pt2537]

ah so they pay £1.00 for a debt of say £1000

 

ok then that cannot work as it would fall foul of the Pinnels case and also Foakes and Beer which was a House of Lords decision which held that payment of a smaller sum in satisfaction of a larger sum is not good consideration

 

so on that basis, payment of a smaller sum to satisfy a larger sum in my view fails straight away. unless of course im missing something here

[pedross]

In my opinion you are not missing something pt2537

 

In fact I think you have just put the final piece in the jigsaw. The agreement is unenforceable so no debt. No debt = no value + £1.00 would make it legal.

 

Diddydicky appears correct and you are still the owner of the debt. The lender may agree to the sale in the end as part of a settlement but whats the point at that stage.

 

However, the post by ploni2007 regarding clearing your debts for 10% is different and I have mixed feelings. Firstly although I agree that clearing your debts for 10% sounds really good the reality is that if your debt is £5000 it costs 17% (£350 + 10%) and £10,000 costs 13.5% which is not cheap to do what can be done a lot cheaper, by yourself or using other companies.

 

Regarding selling the product to clients you can only look at the information readily available. It appears unproven, only one company seem to be taking this route, the OFT have warned that it does not work and from what I have seen of the Matrix website it blatantly breaks the MOJ rules.

 

What they are doing appears complicated but I was always taught KISS - Keep It Simple Stupid.

 

Time will tell.

Pedross

Edited July 6, 2009 by pedross
misleading calculation error

[pt2537]

In my opinion you are not missing something pt2537

 

In fact I think you have just put the final piece in the jigsaw. The agreement is unenforceable so no debt. No debt = no value + £1.00 would make it legal.

 

incorrect,

there is still a debt, the House of Lords confirmed this point in Wilson and First County Trust

 

so there is still a value, the debt is unenforceable, not void or voidable, there is a serious difference between the them

[pedross]

Oops - You are right of course pt2537

 

I take that bit back but I am pretty sure the rest of my post is accurate.

[ploni2007]

Firstly although I agree that clearing your debts for 10% sounds really good the reality is that if your debt is £5000 it costs 27% (£350 + 10%) and £10,000 costs 13.5% which is not cheap to do what can be done a lot cheaper, by yourself or using other companies.

 

Pedross

 

Call me stupid, but I don't follow your maths. 10% of £5000 = £500 + £350 = £850 = 17% of the loan (not 27%).

[pedross]

On no I am really having a bad day. More haste less speed comes to mind.

 

You are right 17% but it's still not cheap. I will now edit the post to avoid any further confusion.

 

Some people may think I have just made 2 mistakes, others may think I am just testing people. Me, I think I am cracking up.

Pedross

[tifo]

ok then that cannot work as it would fall foul of the Pinnels case and also Foakes and Beer which was a House of Lords decision which held that payment of a smaller sum in satisfaction of a larger sum is not good consideration

 

so on that basis, payment of a smaller sum to satisfy a larger sum in my view fails straight away. unless of course im missing something here

 

isn't this what DCA's do when they buy our 'debt' from the bank? i.e. pay a smaller sum to satisfy a larger sum? Why is it acceptable for them?

[fermi]

isn't this what DCA's do when they buy our 'debt' from the bank? i.e. pay a smaller sum to satisfy a larger sum? Why is it acceptable for them?

 

I assume because the Law of Property Act allows them to do that, but does not provide any provision to do it the other way.

 

If the OFT is prepared to publically label this a "[problem]" than says a lot really.;-)

[tifo]

I assume because the Law of Property Act allows them to do that, but does not provide any provision to do it the other way.

 

I meant about the cases referred to in the post, in that a smaller sum in satisfaction of a larger sum is not good consideration, which is exactly what DCA's do when they buy a debt. Do the cases specifically say they do not apply to a debt assigned under LoP?

[pt2537]

Foakes v Beer [1884] UKHL 1 (16 May 1884)

 

D & C Builders Ltd v Rees [1965] EWCA Civ 3 (12 November 1965)

 

Selectmove Ltd, Re [1993] EWCA Civ 8 (21 December 1993)

 

these cases all confirm the point i made

[Kraken1]

they are not satisfying the debt, they are buying the rights to claim it.

[tifo]

they are not satisfying the debt, they are buying the rights to claim it.

 

but the debt is satisfied with the bank, you can only have one debt ....

[diddydicky]

i would say that although i see pt's point the fact that the transaction itself is incapable of being fulfilled (ie it is an illegal contract ) then there can be no sale and therefore no question of consideration since the whole thing is pie in the sky nonsence

 

it would be rather like me selling my mortgage to the rankines- the only people that would beleive i had just sold the mortgage would be me and the rankines!!

[pedross]

Let’s see if I can get something right before the day ends.

The way I see it is that as pt says there is a debt, whether it is enforceable or not is another matter. The debt is owed to the credit card company who is the creditor. If they choose to sell it to a DCA at a lower value then they are allowed to do so as the debt belongs to them. It does not satisfy the debt but the money is now owed to the DCA

Again pt has the answers with the case law and I believe the point is well made.

This is different. The debt is £1000 and they buy the liability for it for £1. This does not satisfy the debt because the debt is still £1000 but they are claiming that legally it is now owed by Rankine or whoever.

The million dollar question is: have they found a legal loophole to transfer the debt and I don’t believe that they have. Nor do the OFT by the look of it.

Time will tell

Pedross

[Kraken1]

but the debt is satisfied with the bank, you can only have one debt ....

It's not though, is it? The Rankines or whoever don't pay off the debt do they?

 

I think Pedross' summary is fairly accurate.