Selling Debt

[chiefmegawatty]

I understand that original creditors often sell debts to debt collection agencies for 10 pence in the pound.

Then the debt collection agency chases the debtor for the full amount.

 

Why cant the original creditor offer a 90% discount to the debtor rather than sell the debt to a debt collection agency.

 

This would allow the debtor to buy up and own his own debt cheaply.

 

Maybe then the debtor could send nasty letters to himself to recover the remaining 90% from himself.

[Ian olney]

Why sell it for pennies in the pound though?

 

 

If the debt is genuine then surely it would make more sense financially to pursue the debt through the courts? That's all the debt collectors do, or threaten to do.

[chiefmegawatty]

Yes exactly. Seems to me that there is something dodgy going on.

[renegadeimp]

Nothing dodgy. The oc double dips. They claim it back on tax/insurance and the sell it off.

[intend]

Only takes a few to be bullied into paying and the debt purchaser is in profit. BUT... thanks to sites like this there is no need to be mugged or feel threatened. Most buy the debts in bulk with no paperwork so difficult to enforce payment. If the paperwork existed the OC would take action.

 

nothing illegal but defo dodgy.

[Ian olney]

They actually sell photocopies of the original agreement off in many instances-There is nothing to stop them selling the same photocopies many times over.

 

 

It seems a NOA is all that's required to pursue the debt-If I send you a NOA, will you pay me some money?

 

 

On the other hand, it seems that you need to be a member of some kind of secret society in order to view the deed of assignment which is the legal document proving ownership of a debt.

 

 

The whole thing seems dodgy to me, from start to finish

[intend]

If OC sells debt via NOA and debtor manages to secure PPI refund from the OC - where does refund go??

 

Silly question but does reclaiming PPI constitute acknowledgement of debt?/

[dx100uk]

your pocket

 

the OC sold all rights

 

dx

[chiefmegawatty]

Maybe the secret society is the one with the funny hand shakes.

[Stigman]

It seems a NOA is all that's required to pursue the debt-If I send you a NOA, will you pay me some money?

 

Some DCA's do not need an NOA as they are collecting on behalf of the Original Creditor.

 

The Original Creditor contacts a DCA and the DCA then commences collection on behalf of the Original Creditor for a percentage of what is collected.

 

Golden rule is though that if the debt is unsold - always deal with the Original Creditor.

 

Stigman

[Ian olney]

Seems like sound advice to me & wouldn't argue with it.

 

Would you say a debtor should accept that a debt has changed hands on the basis of a NOA only though?

 

Just delving more into my particular case,

 

it took the DCA 6 months to furnish me with very basic documents requested under a Data Request.

 

This clearly shows they did not have the basic documents at the time of purchase &

 

I would go back to my question of whether due diligence was carried out.

 

You guys working in finance will know the importance of complying with anti money laundering regs.

[dx100uk]

that's the idea of the NOA.

 

theres also the CCA too ofcourse if the debt is covered by it.

 

the whole debt industry is based on nothing more than 'spoofing' most debtors into believing they owe the money

when many a time they do not.

 

just look at the recent cases lowells have lost & what judges have said

 

happily the rules are a changing come april

 

and anyone that holds a CCL MUST record and retain ALL telephone calls and fwd them to the FSA.

 

so atleast we'll have no-more of the kind of threats most debtors get on the phone to spoof them into paying.

[skookum]

Is there a point where they just write off a debt?

 

I mean before it becomes Statute Barred they have either failed to find the debtor or they can see they are really going to recover much or maybe anything at all.

 

I read on another forum that many believe they will CCJ the person and then re-instate the CCJ every 6 years.

[dx100uk]

to be honest , you don't get that now-a-days

that went years ago.

 

its normally a reasonable conclusion that if the OC sells a debt many years old

they are in all effect doing just that.

 

they know they wont get the money so write it off against tax

and sell it for peanuts.

 

not sure where you are reading

but that's utter bowlarks about CCJ's

 

just like defaults

 

CCJ's fall off your cra file after 6yrs and never comeback.

no matter what anyone does.

you cant have 2 ccjs for the same debt anyhow!

 

it is extremely rare that a judge allows enforcement of a CCJ at the end of its 6yrs...that's what the 6yrs is for..

to collect the debt.. if whomever got it cant be bother to enforce it..tough luck!

 

dx

[skookum]

Interesting as I thought if they hadn't recovered the debt in 6 years of the CCJ being issued they could have it re-instated or something? I am probably talking nonsense but I am sure I read that somewhere.

 

On a car forum there was an interesting thread about debt from a chap who worked in the collections of credit card company. From what he said they only put real effort in chasing debts of more than 3k. Even then only 10% of them where the debtor hasn't paid will they apply for a CCJ. Out of that 10% that are CCJ's only 2 or 3% will be non home owners.

 

Obviously I can't confirm he was who he said he was or what he was saying is true but it did sound feasible.

[dx100uk]

as said it is VERY RARE for a CCJ that's reached or is about to reach 6yrs being 'reinstated'

 

theres no such thing, as such, they had 6yrs to enforce it, time enough the judicial system thinks.

dx

[fletch70]

Sometimes if you reclaim PPI there is a resale clause in the deed of assignment and the money due on the PPI is used to buy back a portion of the debt . In that case you see nothing.

 

 

Debt purchase has nothing to do with enforceability, it is all about commerce.

[intend]

Would the resale clause be in the NOA?? or basically how could a debtor check the deed of assignment??

[fletch70]

The resale clause would not be in the NOA .

 

I had a disputed debt that was sold to MMF , after kicking up and making formal complaints it was returned to the OC and cut in half

[firstship]

dx100uk Hi ...Your reply No 8 in this thread on what do you base this reply,as Fletch70 in reply No 17 raises a point that could upset this completely.

 

My reason for asking is that I am in exactly this situation,NOW and am getting conflicting advice

 

Logic tells me when a debt is SOLD by the OC they sell all rights etc to the new owner of the debt

 

FS

[dx100uk]

there have been a couple of examples of the OC buying back debts to offset the PPi

or charges reclaim.

 

typically these have been on creditcards debts.

 

Barclays to name one.

 

I've never seen nor heard of this mystical clause in a deed of assignment [ which you'll never see anyhow]

having a clause to enable this.

 

esp as in most cases the terms and conditions were set in stone when you signed the agreement.

 

probably several years ago too.

 

its only a very very recent thing

 

and prob only to do with very very recent agreements.

 

theres no evidence that old historic agreements [lets say for sake of a time greater than 6yrs ago]

and their t&c's having this clause.

 

dx

[firstship]

Thank you dx for your reply,mine is a Credit Card,MBNA dates back to 1999, which has been sold twice now,however in their letter they state they May recall the debt to apply PPI, ofset.

 

They also in response to CCA 2 years ago only came up with the Application Form and copies of T&Cs,they further said the debt had been Sold and Assigned to Exporto,which was untrue they sold it to Varde Ireland.Varde have since sold the debt on.

 

Bit of a mess I'm afraid

 

FS

[dx100uk]

they said exactly the same on my neighbours one

in a letter

 

they never did.

 

its sometimes just willy waving to again put people off reclaiming

or as mbna are doing

fudging the reclaim figures

again to bring pressure to settle.

 

just remember though.

if the debt was still owned by MBNA they would offset charges reclaim anyhow

as they are just 'notional' charges you've not 'actually paid' them

as theres an outstanding balance.

 

ppi is diff.

 

dx

[firstship]

dx thanks,lets hope this is the case, I am being thick what do you mean by encourage them to accept a short settlement.

 

The offer they have made is acceptable because I do not have records going back to 1999 and if I SAR them I am sure they will pull we only have records going back 6 years

 

thanks again FS

[intend]

Interesting point firstship - in a similiar postion - no cca for loan, been around the block - has ppi on loan but not attempted to reclaim as yet - now debt sold to !st crud.

 

tempted to reclaim PPI from OC but worried it would acknowledge debt but in no position to repay - loan was at over 18% interest!

 

not trying to avoid repaying but LTSb really screwed up son-in-laws bank account that twice made homeless because of set-offs and subsequent charges that I now hate them with a passion.

 

Question I ask is if sold - how can you find out if their is a buy back clause in dded of assignment. From what I have read it is virtually impossible to get sight of this document.

Edited December 16, 2013 by intend
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