Here’s what’s wrong with the debt purchase industry

[spartathisis]

Unfortunately DD simple is not what the financial sector does

 

Simple would be making lending affordable for all rather than 20%+ pa on CC's. Few people deliberately set out to defraud banks, they get into difficulty and need help, the banks dont want to know and then wonder why folk kick up a fuss about ensuring everything is legal.

[OnMyWayOut]

If the bank can afford to sell the debt on at 4%, why not allow the debtor to pay off 10% and write off the rest in the same way? Of course, with the banks having 'interest' in the debt buying companies they aren't losing out as much as they like you and the taxman to think, are they?

 

OMWO

[OnMyWayOut]

I had a CCJ on a 6K CC debt which they wanted to put a CO on. I offered around 60% to settle which was turned down almost without consideration (I don't believe the solicitors even passed the offer to their client) and within a month the debt with CO attached was sold on - almost certainly for less than 60%, probably less than 10%. On top of that, the new owner wants 8% interest on the CO. And we thought payday loans were a racket!

 

OMWO

[2Grumpy]

If a DCA buys a debt at 4% of its value, presumably it values it as 100% of its value in its accounts as an asset.

 

If it then decides that it can't collect, presumably it writes the whole amount off to tax and then sells the debt to another DCA for about what it paid for it?

 

On that basis, with co-operating DCAs, they could sell to each other with the tax-payer picking up the costs and the DCA making loads of money

 

Have I misunderstood the position?

[madder]

Hi, I hope you don't mind if I add my experience on Debt collectors. I have been through at least 9 debt collectors, all of them mentioned on this site. All of them spouting the same boring "threats"? I have always stood by the motto, "If the original creditor didn't take you to court, why not?"

I found out @ 4 years ago when I was a bit fed up and I thought I would give the latest debt collector a bit of a runaround, I asked for a copy of the original credit agreement, OR a facsimile of the agreement the company would have used at the time of the credit agreement. They replied they didn't have one, I then asked for statements substantiating the amount they were demanding from me, they replied they didn't have any, I'm not joking I have the letters. So from then on I was contacted by at least 6 companies, I always ignore them, I read the boring bits and as usual the words " MAY proceed with court action" MAY have doorstep agents call on me" MAY be passed onto solicitors" and so on and so forth.

So if the original creditor and the subsequent debt chasers did't take me to court, Why Not"?

The law did change a few years ago and a copy of the original credit agreement was not essential to a court summons, BUT the court does insist on a facsimile of the agreement used @ the time of the original agreement or statements supporting the amount asked for.

Think about it ,the people taking you to court have the onus of proving the amount. Otherwise anybody can take anybody to court saying they owe you money.

Apologies if I am parroting the good advice on this site.Its what I tell people finding themselves in the same predicament, I am not a solicitor and can only pass on info from my own experience.

[BRIGADIER2JCS]

If a DCA buys a debt at 4% of its value, presumably it values it as 100% of its value in its accounts as an asset.

 

If it then decides that it can't collect, presumably it writes the whole amount off to tax and then sells the debt to another DCA for about what it paid for it?

 

On that basis, with co-operating DCAs, they could sell to each other with the tax-payer picking up the costs and the DCA making loads of money

 

Have I misunderstood the position?

 

Yes you have!

 

Bad debt relief is not applicable on these 'transactions', it not as simplified as you think.

[labrat]

http://epetitions.direct.gov.uk/petitions/42191

[OnMyWayOut]

I'd like to see something else added to that petition - that a debt purchaser cannot inherit any CCJ or charging order obtained by the OC.

 

OMWO

[BRIGADIER2JCS]

The is a little known or used section of the OFT Guidance 3 .23 in unfair/misleading business parcatice.

 

Sale of statute barred debts, (it is misleading/unfair)' the seller not informing the prospective purchase (of debt) of the status of the debt'.

I use this a 'tag' on statute barred letters, particularly with DCAs which are known to flog off quickly any accounts that have been challenged.

[citizenB]

The is a little known or used section of the OFT Guidance 3 .23 in unfair/misleading business parcatice.

 

Sale of statute barred debts, (it is misleading/unfair)' the seller not informing the prospective purchase (of debt) of the status of the debt'.

I use this a 'tag' on statute barred letters, particularly with DCAs which are known to flog off quickly any accounts that have been challenged.

 

Interesting when their own industry club suggests they mark debts as statute barred when they are made aware in order to prevent these being passed round and round..

 

Stat barred debt[1].pdf

 

 

 

However, if your debtor has stated that they will not be paying a debt because it is statute

barred, these accounts should be closed and your records updated appropriately. This will reduce the

number of accounts that could be placed back out for collection or sale, which in turn could lead to complaint and create further issues for the industry in this area.