When an account has been sold on...

[clonedeux]

I got myself in a financial pickle a couple of years back and unfortunately defaulted on a number of my creditors.

 

Obviously I've been reamed over for charges - some of which have increased the total amount oweing by as much as 25-30%.

 

I was very interested and encouraged to read through this site - and I am already taking some of the steps outlined here to see if I can recoup some of these exorbitant costs.

 

My question is: some of my accounts have been "sold on" to collectors - so that the amount currently oweing is no longer "owned" by the bank or CC that made the charges.

 

I'm therefore wondering to whom I should be making my requests for charges to be credited to - the current debt collector/owner - or the original bank?

 

Would this also apply to DPA request for details of all charges made against my account?

 

assistance or advice will be greatly appreciated.

[Bookworm]

Welcome.

 

DPA requests should be made to the bank, not the debt collectors.

 

I'd suggest you make the request for the money to be paid back to you directly, not to the bank or the collectors. Once refunded, you can then use it to pay some or all of the debt.

[clonedeux]

thanks.. so even if the debt has been purchased by a collector, I should still be asking the bank for the charges back?

 

technically I never paid the charges, although I still owe them - to the collector now, rather than the bank.

 

Presumably since the bank sold the debt to the collector, they have been "Paid" for the extra charges, even though not directly from me?

[Candice]

Sometimes debts are sold to DCA's, other times the DCA Is employed to collect on behalf of the creditor - it can get very confusing. I do believe there is a legal requirement for a DCA to write to the debtor when the debt has been bought. Personally nobody has ever done this (and will form part of my clam in upcoming action against several DCA's).

 

Does anybody know which law actually stipulates that a DCA must write when a debt has been sold on?

[clonedeux]

I'm not sure if they have to or not.. at least one of mine has written to say they have purchased the account - hence my questions above.

 

Incidentally if any of your accounts do get purchased DHUK have some good sample letters you can send to the purchaser http://www.debthelpuk.co.uk/cgi-bin/yabb/YaBB.cgi since if they dont have all the paperwork done correctly the debt may be unenforceable. Off-topic a bit but possibly helpful to others.

[Candice]

I'm currently seeking action against 25 DCA's :-\

[vix2000]

from my experience today on a claim with ge capital and debenhams on contacting debenhams we were told that we had to contact the solicitors for the statements. they have agreed to send them.

[Candice]

As I mentioned, I'm writing to 25 DCA's at the moment asking for information on when they got the debt, how much it was for, payments made, interest added and charges applied, and the dates/amounts/reasons when/why debts were sold on to other DCA's.

 

So far, only 2 have replied satisfactorily (case closed from my point of view), leaving 23 still to comply. The other day I got a response to my letter from a DCA not even on my list (I was like WTF!? Who are you!? How did you get my letter?). I'm trying to put a timeline on each debt to work out what's happened to it during it's lifetime, who had it and so forth. When I've pieced it together I will have a huge dilema though:

 

When one of the first DCA's had it and put charges on the account but later went to sell it on, and a DCA later down the line was charing interest in the balance (and the unfair charges as part of the total), what am I to do?!?

 

I have a program called kMyMoney which is good at working out these sort of things but legally I don't know what to reclaim from who. I mean if a DCA further down the line bought the debt then their starting figure was wrong but is it between the DCA's to argue over the legality of the total sum owed or what?

 

Highly confused is an understatement.

 

 

That's why I'm keen to know how you get on see

[alanfromderby]

I mean if a DCA further down the line bought the debt then their starting figure was wrong but is it between the DCA's to argue over the legality of the total sum owed or what?

 

 

Your confused!!!

 

My gut feeling on this (and please accept that it is no more than that), is that the DCA's would be just as confused.

 

I would imagine (again surmising), that a large number of debts that are handled by DCA's are never defended at County Court - and so are never tested. By challenging the legality of a debt, it could well be that the DCA decides it is not worth the expense of arguing, and they will give up - especially where the debt has been sold more than once.

 

I think what needs to be done in cases such as yours is to just make it clear that you do not accept that the debts are legally correct, or enforceable. At the end of the day they have to prove that you owe this money - not the other way round.

 

My opinion (again, my opinion) is that the original bank must be liable to refund the charges - or contra against the original debt. The question is what is the knock-on effect of that.

 

Clearly the original debt they sold was not correct - since it contained unlawful charges. On that basis the bank must have a duty to contact the DCA to whom they sold it. They must also have a legal duty to remove any default, and remove any CCJ that has been obtained.

 

Please understand I am thinking aloud here. I would certainly welcome the views of other, more learned, members.

[Candice]

I very much appreciate your thoughts, and I am partially heading in the direction you've touched on.

 

First of all I've now written to them all asking for a complete breakdown of information (trying to avoid the £10 DPA charge (eek, £10 for 26 companies I don't think so Shazeece!) by claiming that I made a payment to them that seems to have gone missing. So far they seem more inclined to help me if I say this). If no response, I am sending a followup letter.

 

Failing that I've started sending the statutory £1 PO and asked for them to send me a copy of the original credit agreement and so forth. Plus, as I found out, the CCA 1974 says they also have to provide me with a statement of account so it's cheaper to get my information for £1, as opposed to £10. If I hit all the companies with the same request all at once, it's going to be paperwork mayhem for them all trying to talk to each other to share information lol.

 

I think this is where (I hope) they will give up, realising what a mess they are in. I would still like to pursue any DCA's that owe me charges though, as I can prove these even if they can't prove the debt. Where do I stand with this?

 

Basically my interest is to give them all the royal screwjob and get out of my debt, default's and CCJ's all in one foul swoop. Is that bad? lol

[alanfromderby]

I will be watching with interest.

[Seminole]

Where responsibility lies is an interesting legal question. However, from a consumers point of view the answer is quite simple. When a debt is sold, this is done under the terms of the original agreement. All of the rights and obligations of the company and the consumer are transferred when the debt is sold. Your argument is with whoever owns the debt. Their argument is with the company that sold it to them and so on. The current owner of the debt cannot avoid their legal obligations to you by trying to pass the buck to one of the previous owners in the chain.

 

If there are unlawful charges, you are fully entitled to get your moneb from whoever owns it not. If those guys want to recover the money they pay you then they've got to get it back from whoever they bought if from.

 

Personally I'd love to see some of these parasitic debt buyers engaging in a little cannabalistic feeding frenzy.

[andrew1]

I have posted another aspect of DCA's on 'Debt Collection Agencies' thread which relates to this and Seminole has responded there too.. You should take a look at the penalties imposed by the DCA but you should also look at the interest aspect. DCA's such as Cabot buy these debts @ about 7-12% of the debt value when they bought them. So for a £1000 debt there's a maximum they pay of £120. However, if you miss a payment they charge you interest of circa 12% on the overall balance of £1000 you owe which to my mind is immoral as it is not a ' loss ' to them. Ask what interest you've been charged and if you can get it out of them ask them what they paid for the debt. Also, you can buy off these debts if you are a good negotiator for a fraction of the debt because anything over the £120 is a profit so weigh that against the charges you are claiming because you might be better off doing a deal with the DCA if you can afford to. The debt is usually in trouble before it is sold anyway so there's a write off value calculated by the seller.

[Seminole]

Do the Terms of the original agreement state that they can sell it on? If they've made illegal charges, what exactly are they selling on? It must be their responsibility to sell on the correct amount.

 

It depends on what the original agreement says. Most consumer credit agreements will permit assignment. You are quite right to ask what they are selling on but this actually isn't a question for the consumer as it's a matter between the company selling the debt and the company buying it. Bear in mind that these charges are unlawful and not illegal. They are a civil matter and there is no criminal conduct. They are unlawful and unenforecable but under contract law.

[Candice]

Thanks for the response folks, I shall checkout the other thread.

 

Also something just occurred to me, would it be possible to buy back your debt from the current DCA by offering more than they paid? Can one set themselves up as a DCA to buy debts at 15% for example, covering the loss of the current DCA. Of course, when you own it you can satisfy the debt lol.

 

Is that crazy talk or actually feasible?

[michaelhossack]

i had an account with providian credit card and i missed a couple of payments and the debt was sold on to CABOT FINANCIAL.

my debt when it was sold was £266(febuary 2003) ,the first time cabot contacted me was october 2003 ,8 nearly 9 months later and my debt had risen to £951.

 

i sent off a letter to complain to no avail and was forced to pay back this amount at an agreed rate or face court action.

 

i have since payed off the debt but ...which ****..sorry company should i try and reclaim from....BOTH?.

[Seminole]

If, as is very likely, Cabot purchased the debt start with a DPA request to them.

[dw190]

If I were in the position of having a debt sold on to a DCA I would be tempted to send correspondence to both, ie. holding them both responsible. Letter Before Action to both and if it got that far issue proceedings against both as First & Second Defendants.

 

That way you will certainly get the one responsible.

[michaelhossack]

If I were in the position of having a debt sold on to a DCA I would be tempted to send correspondence to both, ie. holding them both responsible. Letter Before Action to both and if it got that far issue proceedings against both as First & Second Defendants.

 

That way you will certainly get the one responsible.

 

 

i have posted a letter to both PROVIDIAN and CABOT asking for the relevant information relating to my charges.

 

i will probably claim both anyway

[Candice]

I have sent the CCA request to Cabot yet they haven't replied, they are totally useless. That was over 12 days ago and they keep sending me standard responses asking for money. I'm highly intrigued to know how you get on with your litigation, I want gory disgusting details please

Good luck matey

[invernessguy]

i had an account with intelligent finance, started in late 2001.I hardly used it, as i intended usung it as a savings account, but it was too handy! I had a 300 overdraft, which i know i never exceeded.... but in 2002, i had some domestic trouble that meant me and my partner went our seperate ways....both to new addresses.

 

In all the trouble, i 'forgot' to inform IF i had moved address...I couldnt have been more than 150 - 200 overdrawn... (i will find out exactly when dpa arrives)

 

However, last december, I recieve a letter demanding payment from a debt collector, of £1450, as a debt on my intelligent finance account.... I hit the floor, and demanded statements, etc.... I have since paid the whole debt, but they provided a list of charges, back to 2004, at 25.00 monthly, 'excess overdraft', and also around 20 - 25 in interest on the whole amount.

 

I know i can reclaim all the charges at 25 a month, my question is, can i do anything about the interest on them? Bearing in mind the initial debt has rocketed because of charges,before it was sold on? Also, as has been queried elsewhere in this post,who do i chase for the refund??

 

donnie

[lee6370]

Yes you can reclaim the interest added as a result of the charges.

 

When calculating the interest, check the rates they would have applied to your account, if you where exceeding your OD limit, they would have added interest at their unathorised rate.

 

If you reach the stage where you have to take them to court, remeber you can then add interest at 8%, on both the charges and interest they have added.

[Guy]

This thread has started some very interesting trains of thought for me and i have a a question to ask if anyone has any ideas.

 

1. From earlier in the thread if charges were accrued by the original debt owner, eg MBNA do you go after MBNA or the current debt owner?

 

If you go after MBNA and they pay up then potentially you will recieve enough money back to pay a full and final settlement to the current owner (based on the 10% they pay for the debt). ((If you look around the debt buster sites you can clear your debts in 60 months and they usually do this by agreeing a full settlement along the lines of 15 to 20%. If you have the telephone manner you can do this yourself plead poverty, leaving the country or whatever and they will settle.))

 

If you go after the current owner they could end up paying more out than you owe.

 

Either way the potential for the bottom to drop out of the debt business is tremendous and i would therefore think that when the penny drops they will circle the wagons and defend to the penny!!

 

I have always been one to pay my debts (when possible) and one half of me thinks that it is wrong to try to 'lose' a high proportion of debt which they were so kind to give me, lol, On the other hand the potential to take back the charges and use them to clear the current final total is just too good an opportunity to resist.

 

So back to the question - who do you go for??

[lee6370]

It has to be the current owner of the debt, although as has been pointed out it couldn't hurt to have the original owner of the debt as a 2nd defendant.

[Guy]

So the process would be to firstly request the 6 yr history for each card / debt in question and calculate the total.

Calculate the interest on this.

Then request that this amount is repaid by the current debt owner.

 

As i understand it from earlier, you may have a debt of £1000 which the current owner has paid say £100. He is entitled to £1000 but you want £300 in charges repaid. If you get the 300 he will most likely reduce your balance and still demand teh £700. Which is in fact quite reasonable as you do actually owe the £700.

 

having said all that surely as teh original charges were applied by MBNA or whoever surely it is thier problem?

Surely they should re pay the charges and if they want to recover the rest of the debt buy it back and pursue for the remainder?.

 

I think this one has more potential hoops and drawbacks than the banks. However i will watch this thread and other similar actions with great interest. I will also do some more reading regarding sold on debts.