Debt collectors profit while children go hungry.

[PAWS]

When you read these two articles one after another you know there is no justice in the world. All my campaigning, emailing and badgering the government and OFT may seem like a waste of time but one cannot read the children’s society article without trembling. I strongly recommend you click the link to the animated bit which states some shocking statistics.

 

Sorry, cant post links yet!

 

1st read: This is money, at thisismoney.co.uk news article 2592434.Title: Debt- collectors-set-cash-consumer-borrowing-spree

 

Then go to

 

childrenssociety.org.uk press release 8th may 2014. Title: Report reveals debt's true damage to children, families

[BankFodder]

Problem debt is putting stress on family relationships, damaging children and trapping families in a downward spiral of borrowing, according to The Debt Trap: Exposing the impact of problem debt on children, a new report from The Children's Society and StepChange Debt Charity.

Two and a half million children live in families with problem debt, who are behind on £4.8 billion of household bills and loan repayments. A further five million children are in families that are struggling to keep up with repayments and risk falling behind.

This new report – backed by the Archbishop of York – for the first time lifts the lid on the devastating impact debt can have on children. Their findings show that children are suffering worry and anxiety, bullying and going without essentials as their families are trapped in problem debt.

The impact

 

The report reveals the numerous ways that debt affects children's lives:

 

• Bullying - Children in families with problem debt are more than twice as likely to be unhappy at school and be bullied because they don’t have the same things as their friends.
  
• Worry - More than half of children (58%) in families with problem debt say they worry about their family’s financial situation
  
• Family - Half of children in families with problem debt (47%) say it causes arguments in the family.
  
• Going without - Nine out of ten families in problem debt say they have had to cut back on essentials like food, clothing or heating for their children in order to keep up repayments.
  
• Early exposure to debt - More than half of children aged 10 to 17 said they saw advertising for loans ‘often’ or ‘all of the time’. But only one in five children said that their school had taught them about money management and debt.
  

 

 

http://www.childrenssociety.org.uk/news-views/press-release/report-reveals-debts-true-damage-children-families

 

 

Debt collectors are set to spend £1.5 billion a year buying bad debt from banks and other lenders by 2017, almost doubling their business over five years, according to leading credit ratings agency Standard & Poor’s.

 

The agencies, which buy unpaid debts cheaply in the hope of collecting more than they pay for them, have seen business boom during the past decade, with even more rapid growth to come if interest rates start to rise next year, as is widely expected.

 

The agencies typically pay as little as 10p for every pound of debt they buy.

 

S&P said that collection agencies will increase their spending from just over £800 million in 2012 to almost £1.5 billion in 2017. The face value of the debt they buy in 2017 is expected to exceed £10 billion.

 

 

 

http://www.thisismoney.co.uk/money/news/article-2592434/Debt-collectors-set-cash-consumer-borrowing-spree.html

[unclebulgaria67]

Government could kill the debt industry with one step. Make it law that a DCA can only collect what they have paid for the debt, plus say 50% extra of what they have paid. If this were to happen, banks would keep hold of their debts and deal with them properly. The banks would then perhaps make better decisions on risk.

[BRIGADIER2JCS]

Government could kill the debt industry with one step. Make it law that a DCA can only collect what they have paid for the debt, plus say 50% extra of what they have paid. If this were to happen, banks would keep hold of their debts and deal with them properly. The banks would then perhaps make better decisions on risk.

Unfortunately this would only get the same response as that given when it was proposed that the limitations period should be reduced in line with Scotland the industry would cause chaos.

[PAWS]

Spot on unclebulgaria -I appreciate what the Brigadier is saying but we have to keep hammering away!

[PAWS]

Thank you so much BankFodder for posting up the info.

I feel like emailing Tom Drury at Arrow and asking him if he is proud of his work!

[unclebulgaria67]

Thank you so much BankFodder for posting up the info.

I feel like emailing Tom Drury at Arrow and asking him if he is proud of his work!

 

Did you know that RBS part owned Arrow at one time, they might still do so ?

 

I have a feeling that there is a bit of financial trick being played. Banks write off debt fairly easily, without taking much action themselves. They then write off the debt against tax liability, selling it on to debt buyers, some of whom do not hold onto the debts within the UK tax area. From what I gather some of these debt accounts are held in the offshore tax havens, such as the Channel islands. The debt buyers then work on a batch of debts, collecting what they can and through clever accounting they avoid UK taxes, with the money going back offshore.

 

If George Osborne was to get HMRC to investigate the DCA/Debt buyers, he might find that there is a lot of tax being missed. But cynical me might think that some of the people investing in these debt companies had connections with senior people in government. I think Lowell at one time were offering a 10% return to investors, which is pretty good at the moment.

[PAWS]

Absolutely true. Unclebulgaria. The whole system is rotten to the core. Even the government are selling their bad debts on to Arrow and therefore promoting the very system that leaves Children in poverty. People often argue that DCA’s loose so much money on the debts they cannot collect that they have to make those they really terrify make up the short fall but I say why do they exist at all? As you said earlier the original lenders should make better lending decisions and take the consequences or work in a more constructive way with the debtor when things go wrong. How many layers of companies do we need to feed on the misfortune of others? What’s next? Someone licensed to sell anti-depressants, rope and razor blades to those who the DCA’s cannot bleed any more money from?

[BRIGADIER2JCS]

The RBS involvement with Arrow Global was through a special projects investments arm unconnected with the high street banking set up.

[citizenB]

Government could kill the debt industry with one step. Make it law that a DCA can only collect what they have paid for the debt, plus say 50% extra of what they have paid. If this were to happen, banks would keep hold of their debts and deal with them properly. The banks would then perhaps make better decisions on risk.

 

 

I have always said that banks/original creditors should do their own debt collecting. However, this will neve happen. How can they portray themselves as the borrowers friend , if when, the borrower hits a financial hiccup they then have that same banker who persuaded them to take out that extra finance for those little extras were then threatening to see them under the railway arches ??

[renegadeimp]

Stop the banks and lenders double dipping when selling debts and only allow debt buyers to chase the amount they paid for the debt.

 

Allowing the current way of doing things is corrupt in the extreme and this 1920's outdated law really needs to be updated.

[BRIGADIER2JCS]

I have always said that banks/original creditors should do their own debt collecting. However, this will neve happen. How can they portray themselves as the borrowers friend , if when, the borrower hits a financial hiccup they then have that same banker who persuaded them to take out that extra finance for those little extras were then threatening to see them under the railway arches ??

 

 

Such things are being looked at.

[PAWS]

In an article in credit today Tom Drury said he moved from working in Shanks (he changed jobs but the smell still lingers!) because the commute to Milton Keynes from his home in Cheshire left him with little time to spend with his children. Has he ever thought about the number of children living in misery because of the industry he represents? How would he feel as a father when someone calls his home every day to threaten legal action? How would he feel if he could not feed or clothe his children because debt collectors have first ‘dabs’ at his income? How would he feel if every few days he received letters from Fredrickson international, Drydensfairfax or Arrow themselves telling him that they want more money or they will humiliate him in the courts and may even take away his possessions or indeed his home?

 

Up hands everyone who is delighted that Mr Tom Drury has a lovely cosy peaceful life now that he does not have to commute all the way toMilton Keynes.

[dx100uk]

debt collectors only profit if mugs pay them

 

dx

[BRIGADIER2JCS]

debt collectors only profit if mugs pay them

 

dx

 

 

How true!!.

 

 

Don't hesitate to challenge DCAs at their level robust responses to their nonsense claims and threats is the way forward, if one believes that the DCA is wrong, misleading or even downright dishonest say so!!

[ScarletPimpernel]

Another way to stop lenders selling debt would be to prevent them from claiming tax relief on debts they sell, and only allow them to claim relief on the amount they do not collect.

[PAWS]

Good point ScarletPimpernel!

[hillards]

Another way to stop lenders selling debt would be to prevent them from claiming tax relief on debts they sell, and only allow them to claim relief on the amount they do not collect.

 

As in OC sells debt of £1,000 for £100 (10%) and claims tax relief on this yet the DCA demands the full 100% of the original debt when they contact the (alleged) debtor ? Someone failed their maths O level I think. They can't both be right.

[2Grumpy]

As in OC sells debt of £1,000 for £100 (10%) and claims tax relief on this yet the DCA demands the full 100% of the original debt when they contact the (alleged) debtor ? Someone failed their maths O level I think. They can't both be right.

especially when the DCA sells on the debt for £90 to another DCA, can they claim tax relief on the 910 or just the 10? I suspect that it's the full 910!

 

How many DCAs do you need before the tax payer has paid the debt in full?