Can a debt be passed to a DCA without a default ?

[BobbiB]

Hello,

I am currently on a DMP and trying to clean up my credit file.

 

 

I have plans to do CCA / SAR requests later as I need to establish current balances and total charges and interest

but first things first I want to clean up my credit file.

 

 

I currently have one account showing on my file as Arrangement to pay.

I know they should have marked me as defaulted in line with ICO guidelines 6 months into my DMP

but I have been told on the phone they don't need to follow ICO guidelines.

I have now put in a written complaint and am waiting for a response.

 

 

While waiting I have done a lot of research and am now thinking they might actually have breached the Consumer Credit Act

as section 87 states that service of a default notice is necessary before the creditor can become entitled,

by reason of any breach by the debtor of a regulated agreement (a) terminate the agreement.

 

 

5 years into my DMP the original creditor passed my debt to a collection agency who are have continued to record AP markers rather than default me.

 

 

Am I right to believe that by law they should have defaulted me before passing the debt to a DCA ?

Does it makes difference if they sold the debt or if the DCA are acting on behalf of the OC ?

I am not sure which applies in my situation.

 

 

If they have broke the law according to the CCA how do I go about rectifying this

- do I need a solicitor and to take them to court ?

 

 

Thanks for any advice as I can't find anything online about this just the CCA itself.

[silverfox1961]

Hi

First of all, if a DCA is collecting 'on behalf' of the creditor then the original creditor still owns the account so no default is required. It is only when a debt is sold to a DCA that a default should be placed before sale.

 

Regarding the arrangement. 'IF' you are paying an agreed amount which is higher than a token payment then an ARP is sufficient for the CRAs and there is no requirement to default if they choose not to.

 

If you are paying a token amount (as little as £1 per month) then a default should be automatically placed.

 

More info

 

http://www.scoronline.co.uk/sites/default/files/high_level_prinicples_document_final.pdf

[unclebulgaria67]

They can use a DCA when they want.

 

Did you ever get a default notice ? Can you make the payments required under the terms of the account or do you need a reduced payment arrangement ? If they originally defaulted you, they should have issued notice and then when you came to a reduced payment arrangement, noted your CRA record. If your CRA record is not accurate, then complain to the Data Protection officer of the Bank concerned and if they don't rectify, complain to the CRA. If neither Bank or CRA correct the record, you can go to the FOS.

 

When did you take out this credit account ?

[BobbiB]

I can see I need to find out if the debt was sold - fingers crossed it was !

 

 

My payments have always been less than 1% of the original balance so I would class that as a token payment personally.

 

 

I have read the guidelines linked but see they was published in 2014.

I started my DMP in 2003 so not sure if the guidelines are retrospective.

I understood that other guidelines were in place at that time.

 

I can't recall ever receiving a default notice from them but didn't open all my post at that time.

 

 

I joined Stepchange to make the letters stop.

And because I could not afford to continue the contractual payments on my debts due to divorce and the resulting chaos.

I think I first got the credit card in 2000.

[unclebulgaria67]

I cannot see any issue here. Not sure how it helps you ?

 

Guidelines should be followed, if they are required to follow them by regulators. So does not matter when the DMP was agreed.

 

Speak to Stepchange again. Time for a review ?

[BobbiB]

If the DCA are reporting the debt does that mean they own it i.e. they bought it from the OC ?

The issue is I want them to add a backdated default to this account and if they won't do it under ICO guidelines I want them to do not under CCA. Spoke to Stepchange and they was not much help.

[unclebulgaria67]

You should have had notice of assignment from either the original creditor or DCA. They then take over the account and responsibility for CRA record.

 

CRA record should be the owner, so yes it looks like it was sold. Ask DCA for proof of assignment.

[BobbiB]

I just spoke with the DCA and they confirmed that they own the account and it has never had a default notice issued on it.

They was very helpful.

 

 

Am I correct therefore that the OC broke the law (section 87 of the Consumer Credit Act 1974) when they sold my debt without issuing a default ?

[unclebulgaria67]

Consumer debts can be sold that are not in default. There will be other laws that cover this. It happens all of the time, but they should have wriitten to you.

[BobbiB]

Can you tell me which laws please. I have only really been looking into the Data Protection Act and Consumer Credit Act.

[unclebulgaria67]

Debt is an asset the same as any other. Law of property act 1925. Plus parts of others acts as they are relevant to financial matters.

[BobbiB]

Sounds like I need to consult a lawyer as this is all getting a bit beyond me. If silverfox1961 is reading I would appreciate your opinion on this. When you wrote that if a debt is sold to a DCA a default should be placed before sale did you mean should morally or legally ?

[dx100uk]

there no legal remit at all to default a debt before sale

you really need to stop phoning fleecing DCA's too

 

 

they'll tell you any ole rubbish to keep you paying.

 

 

your target here is the original creditor..who is?

 

 

you write to them nicely and ask them why they did not register a default after your third missed/short payment.

 

 

you have been faithfully paying the debt

and feel that their actions have not helped you improve your outlook.

also I assume other creditors did default you and they've gone off the file now

so this OC is being very unfair to you.

 

 

the fact that on your credit file the debt is named with a DCA proves it was sold on.

 

 

I also question your wisdom upon not firing off CCA/SAR request to whom you pay and whom the OC was respectively

 

 

 

 

the results of those could change your whole bargaining outlook.

 

 

list your debts please

 

 

dx

[BobbiB]

You should question my stress levels not my wisdom I have a young baby and am not ready to go down the CCA / SAR route at the moment as I need to deal with one thing at a time or my stress levels will go through the roof. I am just focusing on this issue at the moment.

 

Wondering why we have the CCA if section 87 is not a legal remit ????

[catquest]

A default notice is necessary before a creditor can ask you to pay the whole debt in full , following breaches of the agreement, no other reason.

[BobbiB]

Thanks catquest, can you please tell me where this comes from ?

[catquest]

Section 87 of the Consumer Credit Act 1974, easy to google

[BobbiB]

In my original post I refer to this:

 

Section 87

Need for default notice.

 

(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, or

(b)to demand earlier payment of any sum, or

©to recover possession of any goods or land, or

(d)to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or

(e)to enforce any security.

 

My point is they terminated the agreement when they sold the debt.

[catquest]

No they didn't. Selling a debt does not mean the agreement is terminated.

[unclebulgaria67]

In my original post I refer to this:

 

Section 87

Need for default notice.

 

(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, or

(b)to demand earlier payment of any sum, or

©to recover possession of any goods or land, or

(d)to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or

(e)to enforce any security.

 

My point is they terminated the agreement when they sold the debt.

 

They did not terminate the agreement. If you follow that argument then all loans, credit cards etc which are transferred to another Bank are automatically terminated when there is a change to the owner of the Bank. When the Banks went bust in 07/08 and were taken over, all the existing credit accounts still existed.

 

Your debt would have been sold as a non performing asset, as they were not receiving the payments due. The agreement still exists and will be administered by the DCA.

 

Section 87 above says creditor or owner. So the DCA can issue a default notice as they are the owner, taking the place of the original Bank.

[dx100uk]

My point is they terminated the agreement when they sold the debt.

 

 

did they?

 

 

I'm not sure where why you are worrying about all this stuff..

to what end?

your stress levels...

 

 

seems like to me you might be reading a few other sites that beef up silly bravado on/importance

on these things when there is not really anything there in the first place.

 

 

 

 

 

 

 

dx

[BobbiB]

Hmmmmm ! Seen conflicting advice on this site, ICO guidance, Stepchange website and Compact Law website. Think it is time I contacted a solicitor as I am totally confused now. Was hoping to avoid having to pay out to fight this.

[catquest]

There was the curious case of Egg Card in February 2009 when they "ended" many agreements even though there was no default, ie they didn't allow the use of the card any longer but it wasn't termination.

[BobbiB]

Sorry - did they what ?

[BobbiB]

Sorry the rest of your message just appeared. My point is that i am questioning if the OC have terminated their agreement with me as they sold on the debt to a DCA. If they have I believe they should have issued a default before doing so. You ask to what end. I want a backdated default. The continuing AP markers are causing considerable stress as they will prevent me moving forward in my life for a lot longer than a backdated default would.