Do any of these debts actually exist

[Rhia]

Now a couple of us have had what we consider to be a lightbulb moment and would like thoughts/opinions as to if there is any merit in our musings.

 

There is a long thread re what happens when either DCA or original lender cannot produce the full signed agreement and it seems that many lenders and DCAs are attempting to pass off application forms as agreements so we won't go into that again (although it does have a bearing obviously) but this is our scenario but only when they "sell" the debt not hand it over for management.

 

We started to ask why, if we owe the banks/credit cards, they don't make proper attempts to recover over and above the telephone harrassemnt and computer generated letters. Even if they don't have an inhouse legal them they could outsource the work to lawyers and professional fees can be set against tax. If they write off the debt this also means they can offset it against corporation tax too so their loss is virtually wiped out.

 

They have deliberately allowed sloppy credit agreements (i.e. just the card application) in their frantic race to win customers over. They will employ actuaries/stats experts to come up with figures that show that the majority of agreements don't default. Those that do get into difficulties through health or employment reasons then a high number will have insurance from which they have made a huge profit. The rest will just default. The law of averages now tells them that it doesn't matter as during the lifetime of the agreements they have made so much profit in penalty charges, insurance and interest that the number that does default is justifiable and anyway can be reclaimed.

 

So are the Banks etc selling the DCAs a non-existant debt? Hence the flimsy agreements (these guys can afford top lawyers it doesn't make sense that they send out shoddy agreements unless someone high up has just said soddit we write it off, we've made a heap of cash and it will cost us far more to chase...dump it) If it has been written off surely it doesn't exist to sell on to DCAs. Answers/opinions please

[payingonlyencouragesthem]

This is a very interesting question Rhia - similar but rather more eloquently put than the thread I started below about DCA's suing. I strongly suspect;) that if you simply deny these debts they are in most cases unenforceable. The exceptions are vehicle HP agreements which are indubitably tied to a car and it's registered keeper. I had about £70k of card/finance debts and have only been taken to court once - over an HP agreement. Make of that what you will.

[lookinforinfo]

Some months ago I had a not dissimilar debate with Andrew. Couple of points.

Corporation tax is 40 -50% so the most that can be written off is half the

unpaid debt and half their legal costs.

 

Also, the fact that a debt is written off does not absolve the debtor from

their legal responsibility. In addition, bear in mind that many solicitors charge in excess of £100 for sending debt repayment letters.

[me_n_my_kids]

if a debt being written off doesnt absolve the debtor from responsibility, what does the debt 'being written off' actually mean?

 

im sorry, only trying to learn, not try your patience - lol

[payingonlyencouragesthem]

It means the creditor has written it of as a loss on his accounts. Probably (see above) because anyone with two brain cells to rub together can make it legally uncollectable.

[me_n_my_kids]

so what does that mean to the debtor?

 

again, im sorry lol

[payingonlyencouragesthem]

Probably that they'll sell it to some high pressure phone hassle outfit like Capquest. Just tell them you will only communicate in writing and follow the usual prove it / SAR routine.

[lookinforinfo]

It means that the creditor doesn't think that they will get their money back,

but it does not mean that the debtor does not still owe the money.

[Gingerheid]

I've seen this disastrous phrasing in letters issued by a clueless DCA on behalf of Cr*pital1:

 

"If you do not pay the amount in full within 7 days, the full amount on your account will written off as a bad debt and passed to GrottyDebtWholesale Ltd."

 

If I employed a debt collector to get money in for me and they used wording like "written off" I'd be looking for a refund + damages.

[me_n_my_kids]

LOL thats a major mistake surely

[Vulture_Bank]

if a debt being written off doesnt absolve the debtor from responsibility, what does the debt 'being written off' actually mean?

 

im sorry, only trying to learn, not try your patience - lol

 

they group the debts together it's called securisation and someone buys them cabot pay about 10 %

 

 

 

European Business Law Review 39 - 42

 

(Vol. 11, No. 1, January 2000)

 

Legal Developments in Debt Securisation

[me_n_my_kids]

so the one who buys them starts pursuing the money?

[Vulture_Bank]

so the one who buys them starts pursuing the money?

yeh check the "form " out and rule out the "non runners" but please don't base any decision until we get a general conclusive opinion.

[me_n_my_kids]

funnily enough one of our accounts has just been bought by cabot... its £664, does that mean they bought the debt for around £70?

[lookinforinfo]

Depending on the age of the debt, and other factors, even that may be too

high an estimate of what they paid. Obviously a pretty high percentage of

the debts they buy never get paid. [i am just making a statement of fact,

not asking that you feel sympathy for them.]