Debt Collection Agencies & Consumer Credict Act 1974

[lookinforinfo]

The first part of my post was devoted to answering your point why you felt dca's had to provide documentation-

"I am of the opinion that they do have to provide documentation and I will set out my argument below."

 

And I was saying in post 8 that for the reasons stated, there didn't appear to be any justification for them to supply such information.

[tbern123]

The first part of my post was devoted to answering your point why you felt dca's had to provide documentation-

"I am of the opinion that they do have to provide documentation and I will set out my argument below."

 

And I was saying in post 8 that for the reasons stated, there didn't appear to be any justification for them to supply such information.

 

Ok, this is how I would justify it further to the posts from myself and Zoot.

 

If a credit agreement is defaulted but not terminated and then assigned to a DCA, under the CCA the DCA becomes the "Creditor"

 

189. Definitions

"Creditor" means the person providing credit under a credit consumer agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer credit, includes the prospective creditor'

 

So the rights and duties under the agreement are passed to the DCA, thus the DCA must comply with S77 /78 (providing the original agreement was not terminated)

[lookinforinfo]

I read it that the debt had been defaulted, terminated and sold to the DCA. Forget

I said anything- sorry.

[tbern123]

That's ok, that is where we are all getting confused..

 

It was only with your and Zoots help, I was able to work it through and understand my own situation... so thanks

[JonCris]

Unless it is specified in the T&C's (& I don't just mean the creditors right to use a DCA as an employed agent to collect) if an agreement is terminated & the debt sold to a DCA then no contract exists between the debtor & the DCA. If a debtor then refused to agree to repay the debt to the DCA would the debt be still enforecable in the absence of such a contract..........Thoughts please.

 

Before commenting it should be remembered that only in the last couple of decades has it become usual for lenders to use outside agencies. Before then most if not all had their own in house credit control dept so there could be no dispute who owned the debt..

[nathal]

Simple, question really. Once a debt has been purchased by a DCA, does all the original creditors obligations under the CCA pass onto the DCA ?

 

 

 

answer from fsa

 

 

Once a debt has been sold, all the provisions of the Consumer Credit Act will apply to the DCA in the same way that they had done for the original creditor e.g duty to supply a debtor with a copy of an executed agreement.

As stated previously, this is a standard commercial business practice. A debt is an asset and can be legitimately sold from one party to another

[tbern123]

Thank you, I really appreciate that. If you was a woman I would kiss you:lol:

[JonCris]

If I have a contract with a company & that company decides, for whatever reason to sell the contract to another then I have the right to terminate.......unless that right is incorperated in the T&C's. In most T&C's the only agreement is that they may use a DCA to collect their money.........Thoughts again please? & don't quote the FSA they are already being sued by the plumber who may well bankrupt them. They keep getting it so so wrong all the time

[tbern123]

Most T & C's only really deal with the right of the company to terminate the agreement.

 

The only right you really have if you terminate the agreement is the right to pay the debt back

 

From FirstDirect.com

If this Agreement ends:

1. you must ensure there is no further use of the Card, and cancel any payment authorities and standing orders;
   
2. you will be liable for transactions made before or after this Agreement ends (apart from any referred to us for authorisation after it ended);
   
3. the terms of this Agreement will continue to apply until we have been paid in full; and
   
4. we may require immediate repayment of the balance on the Account.

[Kev_GT]

Ok I have read this thread and tried to take it in

 

But I have just had a conversation with a DCA which went like this

 

I asked them to add to the credit reference that payments are being ,ade to the account.

 

They did not say if the agreement had been ended or not

 

but if it has then there should be no default from the DCA if they are recieving regular payments of a set amount over a set period of time

 

If it hasnt and the account was a credit card account then payments are being made as per the contract so therefore it should be updated on your credit file as such

 

But a default states that the credit aggreement has ended and there is no interest etc applied to the account so I am guessing the credit aggreeement has ended SO their should be no defaults from a DCA if they have not set up a credit aggreement with you!

 

I am trying to find some more information on this as it is not fair to default a willing payer especially if you have set up your own agreement with the DCA

 

Just my 2ps worth

 

Kev

[andybhoy]

answer from fsa

 

 

Once a debt has been sold, all the provisions of the Consumer Credit Act will apply to the DCA in the same way that they had done for the original creditor e.g duty to supply a debtor with a copy of an executed agreement.

 

 

As stated previously, this is a standard commercial business practice. A debt is an asset and can be legitimately sold from one party to another

So does this mean that in fact the DCA has to supply you with a signed agreement as the original creditor would?

 

I have been readint this thread with interest. I really fail to see how a company can ask you for money, threaten you with court if they have no paperwork to back it up.

[lookinforinfo]

answer from fsa

 

Once a debt has been sold, all the provisions of the Consumer Credit Act will apply to the DCA in the same way that they had done for the original creditor e.g duty to supply a debtor with a copy of an executed agreement.

 

Errrrrrrrmmm..........don't know if Nathal picked up on the FSA statement in the

wrong way, or whether he was partly misinformed by the FSA.

 

All the provisions of the Consumer Credit Act DO NOT always apply to a DCA buying on a

debt.

For instance, as initially there is no agreement between the DCA and the debtor,

then charges and interest cannot be applied immediately to the debt. Nor does the

DCA have a duty to supply a copy of the executed agreement, though it must be

produced in Court if demanded.

 

What should happen is that the original creditor should inform the debtor that he

has sold the debt on, and name the DCA that bought it, confirming the date of

transfer and the amount of the debt [not the amount that the DCA paid for it].

 

Then the DCA should contact the debtor, confirming them as the new owner

and asking for the debt to be paid. By law they are entitled to claim the whole amount, but in view of the fact that they normally would not have paid that much

for it, they may well agree to a much lower cash lump sum in settlement, rather

than wait years for the lot to be paid off.

[tbern123]

Can't resist getting into this debate...

 

Just read this though from :

http://www.consumeractiongroup.co.uk/forum/showthread.php?p=354883#post354883

 

With all due respect this advice is incorrect. I am a trading standards officer witch specialised in consumer credit and you are giving out bad advice.

 

The agreement it is still within the currency of the agreement

 

And the DCA does have to comply with sec 77/78 CCA1974.

 

The agreement only ends when both parties are back to the same position they were prior to the agreement or if a court rules otherwise.

 

So the debate goes on

[lookinforinfo]

I am not sure that his [?] statement gets us any further. Even apart from the fact that I am not sure what he means at times.

 

For instance "the agreement is still within the currency of the agreement". I take that to mean the agreement that was in place with the original creditor has still

kept its same conditions in the hands of the DCA?

 

And "The agreement only ends when both parties are back to the same position they were prior to the agreement or if a court rules otherwise.

 

Does that mean that the two parties are the original creditor and the debtor, and

that for the agreement to end, the debtor either pays off the debt, or the Court

decides that the debtor does not have to repay it?

 

Whatever the situation, the DCA is obliged to respond to whatever information is

required under a CCA request, but is not required to show the deed of

assignment.

[tbern123]

I am not sure that his [?] statement gets us any further. Even apart from the fact that I am not sure what he means at times.

 

For instance "the agreement is still within the currency of the agreement". I take that to mean the agreement that was in place with the original creditor has still

kept its same conditions in the hands of the DCA?

 

And "The agreement only ends when both parties are back to the same position they were prior to the agreement or if a court rules otherwise.

 

Does that mean that the two parties are the original creditor and the debtor, and

that for the agreement to end, the debtor either pays off the debt, or the Court

decides that the debtor does not have to repay it?

 

Whatever the situation, the DCA is obliged to respond to whatever information is

required under a CCA request, but is not required to show the deed of

assignment.

 

I am getting more confused, anyone a solicitor ???

 

Ok I dont know what the debt is so I will try and answer on limited knowledge. The agreement could NOT have been terminated by the original lender, they may wish to terminate the agreement by issuing a default notice.

 

Termination of an agreement under section 98 only applies to non default cases where the debtor is in breach. Therefore the account will be in default and the agreement is still current.

 

Default and termination are not the same thing

 

If they are saying the agreement is no longer current then why are they pursuing you? Remember everyone has rights and remedies under the CCA1974.

 

If you want my advise Link are trying it on and have shot themselves in the foot a bit by using incorrect terminology and denying you your rights.

 

Go back and ask Link.

 

I refer to your letter dated ??? where you advised me that the agreement was terminated by the original lender. Can you please advise me how the original lender terminated the agreement in accordance with the terms of the consumer credit act 1974. (They should come back and say a default notice was issued in accordance with section 87)

 

If you are saying that the agreementt is no longer current then I can only assume that no debt is payable. Can you plesae confirm that the agreemnet is no longer current.

 

This will play with there heads.

 

Let me know how it goes

[stiffnuts]

Can't resist getting into this debate...

 

Just read this though from :

http://www.consumeractiongroup.co.uk/forum/showthread.php?p=354883#post354883

 

 

 

So the debate goes on

 

Please disregard last paragraph "The agreement only ends when both parties are back to the same position they were prior to the agreement or if a court rules otherwise.

". It is confusing and I did edit my post to delete this.

 

There is no obligation in law to show a deed of assignment however if not shown I would argue that it is good evidence for the debtor in a county court.

 

The final upshot is that the DCA definitely has to comply with section 77/78 CCA1974. The agreement is not terminated because it goes over to the DCA.

 

The account will be in default (this does not mean termination of the agreement).For a big clue look at section 77(4)(a) for instance it states "If the creditor under an agreement fails to comply with subsection(1)--(a) he is not entitled, while the default continues, to enforce the agreement.

 

We know the defintion of creditor from sec 189, and we know what default means.

 

Section 98 termination - does not apply to cases of default. (In other words get this definition of termination out of your heads only under very few circumstances will an agreement be terminated, for the vast majority of credit agreements the account will be in default).

 

Taking that above and in laymans terms if the account is in default (this is not the same as termination)

 

and the DCA (the creditor) have taken over the debt.

 

Then sec 77/78 applies.

 

Learn more and read

 

There is massives of information here Credit agreements – publications

 

have a look at the various headings

[zootscoot]

The final upshot is that the DCA definitely has to comply with section 77/78 CCA1974. The agreement is not terminated because it goes over to the DCA.

 

 

 

No, but it may well have been terminated by the creditor because of a repudiatory breach by the debtor before being assigned to the DCA.

[stiffnuts]

No, but it may well have been terminated by the creditor because of a repudiatory breach by the debtor before being assigned to the DCA.

 

IT WONT HAVE BEEN TERMINATED by the creditor the act DOES NOT allow for this. There are very very few instances where a credit agreement can be terminted in accordance with section 98 of the CCA . You seem to be talking from a contract of law point of view. If there has been a repudiatory breach then the account is in default, IT IS NOT TERMINATED. Like I say I am a Trading Standards Officer with a legal qualification and specialise in consumer credit.

[zootscoot]

IT WONT HAVE BEEN TERMINATED by the creditor the act DOES NOT allow for this. There are very very few instances where a credit agreement can be terminted in accordance with section 98 of the CCA .

 

Could you perhaps indicate the statutory provisions relating to this as this seems to contradict what is written in the text books I have on the Consumer Credit Act.

[stiffnuts]

Could you perhaps indicate the statutory provisions relating to this as this seems to contradict what is written in the text books I have on the Consumer Credit Act.

 

The statutory provisions are contained within the CCA 1974. Both sections 87 88 and 98.

 

Read this it may be of use

 

In section 87 (1) (a) it speaks about terminate the agreement. But the creditor in the circumstances wont just terminate the agreement. He will ask for certain sums to be repaid in order to rectify the breach. There are very very limited occassions when a creditor can go straight to termination.

 

If you find me a default notice which terminates an agreement I will eat my hat.

 

http://www.oft.gov.uk/NR/rdonlyres/758A497C-254B-4A23-AC96-9B97B8C978B1/0/oft020.pdf

 

Sorry but in what way does it contradict what is written in the text books you have on consumer credit. Please tell me the book you have and if you can the ISBN number,so maybe we can get to the bottom of this.

 

Termination in civil law does not have the same meaning as termination within the CCA 1974

[rosierose]

Hi all

 

I don't suppose anyone knows where I can find a copy of the "Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983"?

 

Been googling without much success.

 

Rosie

[lookinforinfo]

IT WONT HAVE BEEN TERMINATED by the creditor the act DOES NOT allow for this.

 

I hesitate to jump in when the heavyweights are involved-but here goes

anyway. It looks as if the Act does allow for it here-

 

"

87.—(1) Service of a notice on the debtor or hirer in accordance with section 88 (a "default notice ") is necessary before the creditor or owner can become entitled, by

reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement,

[stiffnuts]

I hesitate to jump in when the heavyweights are involved-but here goes

anyway. It looks as if the Act does allow for it here-

 

"

87.—(1) Service of a notice on the debtor or hirer in accordance with section 88 (a "default notice ") is necessary before the creditor or owner can become entitled, by

reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement,

 

With all due respect read my very last post I said exactly the same thing. Yes they can ask for termination but the agreement wont actually terminate (there are limited circumstances where a creditor will ask to terminate the agreement). An example of where a creditor might go for termination is mainly in hire purchase agreements, where there really isnt a sum of money outstanding).

 

A creditor in your bog standard loan or credit card agreement could not go straight to termination because if you read other parts of 87 there are other sections such as getting all sums repaid etc etc, that would be more applicable.

 

Asking to terminate the agreement does not mean that the agreement automatically becomes terminated.

 

When I said the act does not allow for this what I meant was that in the original context of the thread the act would not allow for the creditor to go straight for termination. As there would have been sums outstanding then a default notice would be served asking to either catch up on payments or repay the whole balance. You see if you comply with a default notice then any breach is to be treated as if had not happened.

[tbern123]

This begs the question, what action will Trading Standards take against a DCA who is in breach of the CCA by not providing a copy of the original agreement ?

[zootscoot]

IT WONT HAVE BEEN TERMINATED by the creditor the act DOES NOT allow for this. There are very very few instances where a credit agreement can be terminted in accordance with section 98 of the CCA.

 

Sorry but in what way does it contradict what is written in the text books you have on consumer credit. Please tell me the book you have and if you can the ISBN number,so maybe we can get to the bottom of this.

 

 

 

"At common law a creditor will be entitled to terminate a credit agreement if the terms of the agreement allowed him to do so or if the breach by the debtor was such that it amounted to a repudiation of the contract. The Act does not prevent the creditor from terminating the Agreement" - Business Law, Ewan Macintyre, ISBN 0-582-89422-0 (p.423)