HFC Marbles Card Charges Reclaiming

[tifo]

Cabot's smokescreen re LoP is just to save stamp duty on bought debts.

 

However, assignment under s.136 LoP is absolute and not equitable therefore Cabot's explanation is not valid under their own statements.

[tifo]

what happens to set-off and cross-claim argument if the bank 'buys' back the debt which it had previously sold in full as legal assignment to a DCA?

 

the bank then applies the credit, reduces the debt and sells it back to the same DCA if any balance is remaining.

 

I would assume in the above that the DCA/bank would need to provide documentation re legal assignment as it cannot be done without any, even if the agreement between them for receivables states the bank and DCA can buy/sell anytime between themselves?

[nicklea]

 

Set-off is only available where the following criteria is satisfied –

(i) The cross-claim must be closely connected with the primary claim.

(ii) The cross-claim must be for an amount of money (liquidated debt) that must be capable of being calculated with some degree of precision.

(iii) The claim and cross-claim must be mutual, they must be owned as between the same parties (or their assigns) in respect of the same rights.

(iv) The cross-claim must be due prior to the customer receiving a notice of assignment.

 

Hi Sansho,

 

This is really interesting, and will be useful fo me. Do you mind me asking where this list of criteria comes from? If I'm in court, I'd like to be able quote my source and I don't think it would go down very well if I just said that it came from a post on this website.

 

Regards

 

nicklea

[greendykes]

This is really interesting. Tifo sorry for hijacking your thread but this has just happened to me! Check my thread http://www.consumeractiongroup.co.uk/forum/lloyds-bank/123584-lloyds-buys-back-debt.html. So what I would really like to know is how we can stop the banks & dca passing the debt back and forward and how I can get my refund from the bank. Any advice appreciated and Tifo I will be following your threadand if I come across anything I will let you know.

[tifo]

Is there a new tactic in refunds from banks which means they pay themselves?

 

Recently i have had some complaints completed through the FOS and 2 of these have been that the bank can pay the refund towards the balance it wrote off when it sold the account. That means not to me and not to the DCA but itself. This is seen as 'fair and reasonable' by the FOS because i didn't pay the balance to the bank.

 

The DCA is of course asking for the whole amount, including that written off so it seems unfair to me that there is a 'negative balance' at the bank where it can put my refund into and the DCA is also asking for this same 'balance' from me.

 

The other decisions i've had are that the bank pay me by cheque (a small amount) and the bank can pay the DCA which is also 'fair and reasonable'.

 

So 3 different decisions allegedly based on the same guidelines. An example of the FOS only making decisions based on what the bank says and not guidelines?

[nicklea]

Hi,

 

I don't know about going through the FOS, but if you go through the courts then they have no right of set-off and so they can't do this:-

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/122831-debt-sold-dca-who.html#post1308897

[nicklea]

Sorry, just noticed that that came from your thread originally

[tomterm8]

They would have to pay the DCA the money, and any award by the F.O.S. should reduce your indebtedness.

[tbern123]

Reference can also be made to the case of Edlington Properties v. Fenner & Co. Ltd [2005] EWHC 2158 (QB) which also affirms this position that the assignor has no right of set-off to a third party (assignee) for a damages claim brought against it post-assignment, as any equitable set-off in this regard is personal in nature and the debt sold is not transferred subject to it.

 

There might be a little problem relying on that case. The quoted case was later unsuccessfully appealed. However during the appeal it was noted that:

 

In his judgment Lord Reading CJ said at 287:

 

"It is perfectly plain that we are not dealing here with the right to set off against the assignment of a chose in action, in which event quite different principles apply."

 

I thought in relation to Section 136 of the LOP the chose in action is the actual debt. If the chose in action is the debt, taking into consideration the comments of Lord Reading it could be argued that the outcome of that case has little if any effect on this topic.

[tifo]

as tbern is aware, i have recently posted another thread where the bank wants to pay itself towards the amount it wrote off when it sold the account to the DCA.

 

this is very worrying ... for the simple fact that it may leave the debtor with the whole amount still to pay the DCA or that the bank may be breaking its own agreement with same DCA or a number of things.

 

even more worrying ... the FOS agree with this.

[tbern123]

as tbern is aware, i have recently posted another thread where the bank wants to pay itself towards the amount it wrote off when it sold the account to the DCA.

 

this is very worrying ... for the simple fact that it may leave the debtor with the whole amount still to pay the DCA or that the bank may be breaking its own agreement with same DCA or a number of things.

 

even more worrying ... the FOS agree with this.

 

However, as Citi have a contractual obligation with Cabot to pay pass the refund onto them, there will not be two debts (one to citi and one to cabot).

 

Citi have two options, they either fulfuill their legal obligation and pass this payment to Cabot. Or as stated within their contract of sale they can recall the account from Cabot and pay themselves.

 

Either way, tifo it won't be your problem. Worse case, it will be a contractual dispute between Cabot and Citi. You debt will have been repaid so you will not be a party of that dispute.

[JonCris]

One way to cut to the mustard with the assignee is to tell them that if they refuse to accept that any monies refunded are not theirs & should be paid to you then you will have no choice but to sue them for a refund & then they in turn will have to seek indemnity from their client.

[tifo]

One way to cut to the mustard with the assignee is to tell them that if they refuse to accept that any monies refunded are not theirs

 

As if they're gonna say no to free money that they would not get otherwise!

[JonCris]

All I can say is that from personal experience I have made just such a threat to a couple of DCA's with the effect that they cancelled any attempt at enforcement & returned the account to the OC.

 

In fact I made the same suggestion on this site some many months ago just after my 1st such success

[tbern123]

All I can say is that from personal experience I have made just such a threat to a couple of DCA's with the effect that they cancelled any attempt at enforcement & returned the account to the OC.

 

In fact I made the same suggestion on this site some many months ago just after my 1st such success

 

JC is right (the account becomes a hot spud and they don't want to burn their fingers), DCA's will return the account to OC, Especially in relation to refund of charges this now happens more often then not.

 

In the sales agreements (deeds of assignement) the returning / recalling of accounts is covered in great detail (at least the ones I have seen)

 

In most instances I think people will find that the Banks don't actually pay the DCA's (why would a bank pay a dca more then the dca paid for the debt). The bank simply recall the account and apply the refund.

 

When charges were first being refunded, banks gave no consideration to the repayment of debts with DCA's and were more then willing to send a cheque to the customer. However, this changed a few months before the OFT case announcment and Banks started recalling the accounts back from DCA's instead.

 

I know it is has been argued that they would have to provided relevant documentation. However, in reality they don't have to provide the consumer with anything to recall an account and apply the payment. As the only notification of assignement consumers usually receive is to alledgedly convert the equity assignment into a absolute assignment.

 

They would only write and notify the comnsumer and notify them if after the application of the refund a debt still exists and they wanted to reserve their right to instigate proceeding via a absolute assignment or they wanted to then sell it onto another DCA to collect the remaining debt.

[tifo]

I know it is has been argued that they would have to provided relevant documentation. However, in reality they don't have to provide the consumer with anything to recall an account and apply the payment.

 

I still don't agree, as a legal assignment is just that. There would need to be another legal assignment back to the bank. At the very least they'd have to prove there was a clause allowing this in their sale agreement with the DCA.

 

I would simply refuse to acknowledge any debt to the bank as i would state they have absolutely assigned this to a DCA therefore have no further rights etc. I have proof that they have, how would the bank prove they now own the account?

[JonCris]

I agree with tifo

 

If they have disposed of the debt for a consideration they have effectively relinquished all rights & responsibilities over that debt. - For them to now have any right of recovery there needs to be a reassignment of the debt back from the DCA to the OC otherwise they have no right to try & enforce the debt

 

You can't sue off the back of another it's called Champerty & ain't allowed

[tbern123]

Sorry for any confusion, I did not intend to infer that the account was not reassigned to the OC, or that a bank could take any action at all without the account being reassigned to them.

 

What I intended to say was that the process of the account being returned / recalled was documented within the Sales Agreement (Deed of Assignment). This process is the actual reassignment of the account back to the OC.

 

Once the account is returned to the OC by the DCA or recalled by the OC (reassigned) they can and do credit any refund to that debt.

 

This is taken from a Cabot Sales Agreement (Deed of Asignment)

 

Repuchased and Recalled Accounts

 

25. The Seller will notify the Buyer’s Servicer of accounts it wishes to recall on an ad-hoc basis. This notifcation should provide the minimum level of detail agreed operationally.

[JonCris]

Yes tbern but if they haven't sent a reassignment letter to the alleged debtor that clause only remains a contractual agreement between those 2 parties - & not the debtor.

 

As the debtor may have only signed T's & C's permitting the transfer from the OC to another they may not have agreed to the reversal - once sold it's sold Any indemnity offered by the OC is a matter for those 2 parties & NOT the debtor

 

In other words the whole process starts again & they should exhaust every avenue before disposal otherwise if they sell it the DCA is stuck with a worthless piece of paper IMHO

[tifo]

Yes tbern but if they haven't sent a reassignment letter to the alleged debtor that clause only remains a contractual agreement between those 2 parties - & not the debtor.

 

My point exactly.

 

I need to be notified of the reassignment etc.

 

Also, if the DCA has not complied with a CCA request or the matter is the subject of intended litigation and i have requested details under CPR, how can they re-assign it to someone else? First they'd have to prove to me they legally owned it before they could re-sell it, otherwise they have nothing to sell and the bank has bought the same lemon they sold in the first place.

 

I know most people will just agree with the bank and accept it but that's a personal choice.

[tbern123]

Isn't a letter to the debtor to notify them of the assignment only requried to change the assignment from equitable to absolute.

 

If the debt is returned to the original creditor as you say it would start the process again and whilst the account is back with the OC they can credit any refund against the outstanding debt.

 

I am going to post some details of the agreement that relates speciify to one of the op's accounts which may further explain my previous posts. I would respectfully ask that people bear with me as I have to type this information first

[JonCris]

IMHO once the bank sell the debt they relinquish all rights & responsibilities they would have had to exercise any authority over that debt & even if it is reassigned back to the bank as part of their contract with the DCA it's still become a worthless piece of paper

[tbern123]

I am on dodgey ground on this, so I am only thinking out loud (trying to cover ones backside)

 

In the t&c's they usualy state something along the lines of they may any any time assign or transfer their rights under the agreement.

 

Is the right to assign a right under the agreement ? If so does not the right to assign also be assigned to a DCA ?

[tbern123]

Ok this is the first bit, sorry I am a slow typist

 

4.2 Seller s Call Right

In the even that the Seller, acting reasonably and exercising good faith in reviewing the totality of the circumstances, determines in relation to any particular Account that the Buyer’s ownership of such account is likely to lend adverse publicity to the Seller, the Seller shall have the right to repurchase such Account at the relative price (in terms of percentage of the Face Amount) paid by the Buyer there fore in respect of the Face Amount then outstanding on the Account. Any such re-assignment by the Buyer shall be without recourse and without warranty. For the avoidance of doubt, the Buyer shall retain all sums received by the Buyer in relation to any Account to be re-assigned.

 

As I type it I will add more

[tifo]

Is the right to assign a right under the agreement ? If so does not the right to assign also be assigned to a DCA ?

 

Wouldn't they first have to prove they legall owned it?