Vampyra -v- Various DCA's

[thinksmart]

I don't understand how "charging off" a bad debt would mean that an original creditor didn't lose any money. I can see that there might be a saving of a few pence in the pound in tax relief on a bad debt but surely the bulk of the debt would still be lost. So even if the debt was then sold for say another 10p in the pound there would still be a considerable loss to the OC. Can anyone please explain what I'm missing?

[Rhia]

My understanding is that the LPA 1925 is such that even a very informal letter can be accepted by the court as a notice of assignment ( even if it was not intended as such, i.e. "Joe Blogs sold your £510.50 debt to me, pay up." ).

 

Hmm, yes this isn't very clear either is it? I have to say as it is such a potentially important letter it should be clear, direct and not misleading in any way so that the recipient can be in no doubt of its intentions.

So although the official requirements may be vague I would think a court would want such a document to be clearly and correctly presented.

 

Can I also say that whilst we are correct in pursuing the assignment and who owns what I think it would be folly to take the eye off the ball in terms of a correctly executed agreement, Unfair Terms, unlawful processing of personal data. In other words keep all bases covered as you may trip up on one angle but need to make sure as much as possible all arguments stack up.

[thinksmart]

I think we're getting towards the idea of a Frequently Asked Questions page here - which would be brilliant - if we knew the answers! But we're likely to have FAQs with frequently replied opinions, guesses, hopes, fears, and anecotal evidence as their answers. Not that all those things aren't valuable as they are the nuggets from which answers may eventually come, but unfortunately as we are all seeing the law is so far from black and white as to be indiscernable at times. So how do we boil all this down into answers whch we can all undertsand and better still apply? Sad to say, I don't have an answer to offer yet.

[Vampyra]

Thinksmart - Let's work on this "charge off" thing slowly. I have been led to believe it is almost written off against tax, thus a written off debt shouldn't be reclaimed at full amount. It is an accepted practice in the USA but not, I am led to believe necessarily in this country.

 

I think it's better if we all do do this, not to argue, which I can see happening, rather track down the facts and use them. What we don't know we must say we don't know, but I feel that if we do not rush this process things will slowly slot into place. You need an open mind, lateral thinking and as regards wording of things, make sure nothing written can ever be confused for something we don't mean.

 

I am busy today but let's all work slowly through the thread and make it clear, then maybe Richard can advise us on the missing parts.

[remus]

Please do not feel disheartened. Some people and this is not to cast dispursions, find it a little difficult to look at answers laterally and see what is being said.

I am one of these people, (although aspersions might be better cast)

and as I have said in a previous post, everyone's posts are enabling me to better understand the laws, and how they are used, (abused?)

I found reading this http://www.b-mag.org.uk/memos/Cascading%20Memo%2032.doc (thank you Richard) non hi brow, and very relavant.

And I concur with all of Vampyras post, 171.

 

When I was first past to a dca they were very evasive when pressed, (this was pre CAG, and I was just confessed/worried) as to who I should be dealing with.

Now I know why:rolleyes:

[Vampyra]

Spelling isn't always my strong point

[remus]

bless:) Vampyra, have you had your responses from your DCA's?

 

I am following this thread with much interest, as like everyone else I have a vested interest:D

 

I'm even wondering in my simple way, if it would be worth putting a case up (mine if needed ), and work through it, step by step to see the way forward.

Just a thought:)

[Shoestring]

Thinksmart - Let's work on this "charge off" thing slowly. I have been led to believe it is almost written off against tax, thus a written off debt shouldn't be reclaimed at full amount. It is an accepted practice in the USA but not, I am led to believe necessarily in this country.

 

I doubt that all the debt is written off against tax.

 

To be clear. Banks are compelled to write off as losses, loans that are judged to be "non-performing" - that is to say, where regular payments of principal and interest are not repaid according to the agreed schedule. This is something that is judged in-house but can also be judged by the external firm of Auditors at the time of the annual audit.

 

What happens is that if a debt is sold off as non-performing, then to the extent that profits are accordingly reduced, then less tax becomes payable.

 

But we should all bear in mind that losses are expected as a percentage of overall lending and factored into the general lending strategy. The higher the risk of non-payment the higher the interest rate that is charged for the loan. That's why you and I always pay a premium above lending rate LIBOR/BaseRate - to reflect the level of risk the bank assign against us.

 

In other words, the margin of profit on the vast majority of loans that are repaid in full and in good time, include a portion of additional profit to compensate the banks for those that do not perform.

 

If there weren't any bad loans ever, then the banks would have to lower the cost of lending to reflect that. But it'll never happen. One might argue that since the banks are charging higher premiums against all their other performing borrowers, then those who get into difficulties and cannot repay their loans should be forgiven -- or those who perform whould be given a discount when the loan is repaid. But this'll never happen either.

 

Hope that helps a little.

 

Shoestring

[hitback]

Hi All,

 

We seem to be shooting off in a tangent again, lets get back to tomterms letter and make it fit for purpose.

 

FAQ's pages are excellent for an site but take a great deal os time and management, a repository of letters to fit any occasion would be priceless.

 

Its a good letter and as Tomterm is the author, we should be adding suggestions/sentences/paragraphs until we feel we have simple but effective letter, with references to whatever laws apply that will if needs be stand up in court.

 

Then perhaps someone with a in-depth handle on the law could dot the i's and cross the t's???

[hitback]

Excellent shoestring I think this explains exactly, or at least all we have to know from this aspect. The taxes, the higher premiums that if they go full-term cover the losses from write-offs - And how the banks at the end of the day very seldom lose out!!

 

Bravo....

[dannyboy660]

I don't understand how "charging off" a bad debt would mean that an original creditor didn't lose any money. I can see that there might be a saving of a few pence in the pound in tax relief on a bad debt but surely the bulk of the debt would still be lost. So even if the debt was then sold for say another 10p in the pound there would still be a considerable loss to the OC. Can anyone please explain what I'm missing?

 

You have to consider underwriters. Even loans are insured. The creditor claims on the 'insurance'. Tax and sale are a bit of a bonus.

Underwriting - Wikipedia, the free encyclopedia

 

A good site to refer to is Services at Marlin Financial Services although just because a company say they have bought your debt, this may not be true. I had a link for a great company based in Antwerp, but I can't find it now. Vampyra will have to be my witness on that one!!

 

Debt purchase is also used to bypass DMP's Arrow Financial | Consumer Credit Counseling Services (CCCS) which is absolutely proof positive these companies are targeting those who are already attempting to pay off their debts (Caro take note!!) and the intentional dodgers are still likely to get off the hook. It's pointless even trying to do things by the book, because the purchase companies exist to undermine serious attempts to clear debts by harassment, bullying and probably illegal means for their own profit. They love debtors!!!

 

Why are so many of the purchase companies based overseas - Tax reasons perhaps??

[Shoestring]

You have to consider underwriters. Even loans are insured. The creditor claims on the 'insurance'. Tax and sale are a bit of a bonus.

 

Insuring debt is not usually an activity of high street banks lending to the individual, but rather are more specialised for lending to big companies and sovereign nations. The amounts involved make it considerably more "prudent" for a bank to get an insurance wrap. Lending a few grand to you or I bears far less risk (in the scheme of things) and can be simply covered by a higher rate of interest charged.

 

Insurance wraps for sovereign loans is where things start to get dirty so far as the taxpayer is concerned. Financing UK arms sales to nasty third world dictators like Saddam, was very often insurance wrapped by the ECGD - the government Export Guarantee Scheme. For a fairly modest premium paid to the government (ECGD) the financing bank could sleep assured. If the nasty tinpot dictator didn't pay for his weapons, we the taxpayers picked up the bill.

 

One reason this activity is not overly reported by the media.

 

Shoestring

[make them aktiv runners]

I had a link for a great company based in Antwerp, but I can't find it now.

 

I remember reading that some time ago. As you mentioned Antwerp it was easy to find - East-West Debt

An international financial company specializing in purchasing and recovery of overdue trade or bank debt in emerging markets.

[Shoestring]

I remember reading that some time ago. As you mentioned Antwerp it was easy to find - East-West Debt

An international financial company specializing in purchasing and recovery of overdue trade or bank debt in emerging markets.

 

Most major banks have a department that purchase transnational and sovereign debt at a discount. The one above is a relative newcomer I would venture, but I like its name "East West", which harks back to the cold war days when these units were first set up. Of course, the debt is now spread across the planet...

 

Shoestring

 

PS, it has nothing to do with personal lending in the UK which is an altogether different sector of banking (the one most of us here are concerned with).

[dannyboy660]

PS, it has nothing to do with personal lending in the UK which is an altogether different sector of banking (the one most of us here are concerned with).

 

 

Can you find a better explanation of "purchase in option" than the East-West website?? (Thank you MTAR)

 

This thread seems to have done a full circle and we're back to around Richard's post 18, legal or equitable.

 

It's all good stuff though, and I'm sure many will put it to good use.

[make them aktiv runners]

Can I also say that whilst we are correct in pursuing the assignment and who owns what I think it would be folly to take the eye off the ball in terms of a correctly executed agreement, Unfair Terms, unlawful processing of personal data. In other words keep all bases covered as you may trip up on one angle but need to make sure as much as possible all arguments stack up.

 

I agree that everything should be covered. Tomterm's letter is well written but judging by other letters that have been issued in the past, the response is going to be a muddled explanation of what they want to say rather than a direct answer.

 

In my own opinion, we should be writing to OC after all they are the ones we dealt with originally, why, after they chose to allow us to be treated like sh1t, should we let them off lightly. The OC does have all the answers/ is regulated by FSA and subject to FOS for unsatisfactorily dealt with complaints/ may or may not be as evasive as DCA and wants to be seen with a clean caring image. Gently forcing OC's hand may also produce enough evidence to take to the authorities to prove DCA defaults etc.

[rory32]

Good point Aktiv.

[make them aktiv runners]

There are many people who can write much better letters than me, so it certainly needs improving especially to make it read that not acknowledging debt. I am submitting this as a general concept. The idea is to appear confused why DCA writing, give OC benefit of the doubt that they may not realise the DCA’s actions are by default reflecting on their image too, questions show there is legal knowledge so will not be pushed around, questions and later paragraph make it clear what type of answers want, DOA cannot include commercially sensitive information so kindly telling them exactly which parts to omit to avoid confusion, cover Data Protection & CCA, lack of the CCA and the knock on effect to the other answers may well encourage (hopefully) them to pressurise DCA into closing the case.

Me, being cruel would be tempted to ask the same questions of OC & AC, and then if they do not match instigate a dispute between the 2 of them while the limitations clock is ticking away!

I am writing to you about the above assignment/agreement/contract you appear to have entered into with XXXXX.

At the present time I am unwilling to enter into any further correspondence with anyone other than yourselves as I am receiving little clarification from XXXX.

You will no doubt appreciate that suddenly receiving demands for money from a company totally unknown to myself raises concerns over their entitlement. Furthermore before taking legal advice I must establish exactly what has happened to justify whether XXXXX are indeed the only party I am able to deal with. In order for the dispute to be sorted in an amicable and transparent way will you please forward me answers to each of the following:

• Who is the creditor/owner for the purpose of S189 of CCA 74?
  
• Who is responsible for responding to a CCA request under S77-79?
  
• Was the sale of this account/debt made by Equitable or Absolute assignment?
  
• What evidence of my permission has been given to XXXX in order to allow them to process data?
  
• Where have I agreed to allow you to assign the debt/account?
  
• I am not party to a novated agreement therefore who is responsible for the duties under CCA 1974 and who should be performing those duties?
  
• Who holds the rights under CCA 1974 and who should be exercising those rights?
  
• Why have I not received a fully executed CCA?

Obviously I am aware that there is a possibility that you no longer have any involvement in the above debt/account. As a result I have phrased the questions in a way that only simple answers are required rather than expansive explanations.

Finally as my legal advisor may have other questions, will you please forward me a copy of the above assignment/agreement/contract, less details of the consideration paid/payable and other accounts/debts.

Thank you for your time.

[rory32]

Don't think you're cruel Aktiv - just prudent. I like the letter - any other thoughts?

[Shoestring]

 

Can you find a better explanation of "purchase in option" than the East-West website?? (Thank you MTAR)

 

I skimmed the East West website but could find nothing about "purchase in option" and have never heard of that term. "Purchase an option" is somethng else again, but as I said the sort of business the above firm is engaged in has nothing at all to do with UK high street banking but rather is highly specialist international "niche" banking in its scope.

 

Hope this helps.

 

Shoestring

[dannyboy660]

Shoestring,

 

View haloo....

 

East-West Debt: Debt purchase - financial services

 

 

The issue was about ownership. Vampyra was told by TS (perhaps on an earlier thread) that just because an agency tells you they own a debt, it doesn't mean that it's true, in the real sense of 'own'. Now there's a surprise;) . This raises the issue of assignees being legal or equitable, and I'm not going to go over that again as its already extensively covered i.e Richard Spud post 18 and others since. Equitable assigness who 'purchase in option' have the right to pass the debt back to the OC if their recovery attempts are unsuccessful. This applies in law just as much to UK personal debt and high street banking, as to the highly specialist international niche.

 

I can assure you without shadow of a doubt, the firm mentioned is involved with Debt Purchase at all levels, as are the huge US companies like 'Sallie Mae' who you may be familiar with, and our friends in Antwerp can be surprisingly helpful on explaining the process if you wish to give them a call.

 

Good hunting

[Shoestring]

Shoestring,

 

View haloo....

 

East-West Debt: Debt purchase - financial services

 

 

The issue was about ownership. Vampyra was told by TS (perhaps on an earlier thread) that just because an agency tells you they own a debt, it doesn't mean that it's true, in the real sense of 'own'. Now there's a surprise;) . This raises the issue of assignees being legal or equitable, and I'm not going to go over that again as its already extensively covered i.e Richard Spud post 18 and others since. Equitable assigness who 'purchase in option' have the right to pass the debt back to the OC if their recovery attempts are unsuccessful. This applies in law just as much to UK personal debt and high street banking, as to the highly specialist international niche.

 

I can assure you without shadow of a doubt, the firm mentioned is involved with Debt Purchase at all levels, as are the huge US companies like 'Sallie Mae' who you may be familiar with, and our friends in Antwerp can be surprisingly helpful on explaining the process if you wish to give them a call.

 

Good hunting

 

I'm now on the same page as you on the "purchase in option", in other words a purchase of debt with recourse to the seller if they are unable to collect, as opposed to a purchase of debt "without recourse" which is also a specialised area of banking and finance.

 

From what I read of East West's website their business is focused on trade and sovereign debt. I saw nothing to suggest that they are dealing at "all levels" - (i.e., with you and I rather than a big business or a sovereign nation) which is why they speak about establishing "solutions involving claims on emerging markets..." and then name countries: "Iran, Iraq, Angola, Russia, Nigeria and Congo" - in other words dodgy soveriegn risk that demand a high premium due to the risk of non performance.

 

I don't need to phone them. I'm speaking from extensive personal knowledge and experience. However, that experience does not include any domestic (high street) banking where I remain pretty much clueless as anybody else.

 

I posted on this thread only because the post by RichardSpud about an assignment needing to be "in writing and signed by the assignor" struck me as being very interesting, if it is true that a lot of debts are assigned in batches.

 

I wondered (and still do) if there might be a weakness here that could be taken advantage of. If the collection agent cannot demonstrate ownership of an individual debt but only a batch of debts, this might be a legal loophole. I imagine this is something that has been covered by the selling and purchasing parties -- but you never know. Look at other glaring cock-ups that have been reported on this site... I'm thinking of the banks being unable to provide copies of the original signed credit agreements which means collection of a large numbers of debts are effectively legally unenforceable.

 

This "signed assignment" is still worth worth pursuing in detail, I think.

 

Shoestring

[dannyboy660]

We are undoubtedly aiming at the same goal, but I don't think you are picking up on the point I am trying to make to you.

 

EWD collect debts at all levels, under different names.

 

Sallie Mae is a huge clue.

 

Look at their website and you will find they are the leaders in student loans (US) and all round jolly good chaps....however...Arrow Financial DCA that crops up on these boards time and again as the bane of so many lives are, Sallie Mae. They are one and the same, an OC and a collector/purchaser, operating mainly in different countries.

 

 

I wondered (and still do) if there might be a weakness here that could be taken advantage of. If the collection agent cannot demonstrate ownership of an individual debt but only a batch of debts, this might be a legal loophole. I imagine this is something that has been covered by the selling and purchasing parties -- but you never know. Look at other glaring cock-ups that have been reported on this site... I'm thinking of the banks being unable to provide copies of the original signed credit agreements which means collection of a large numbers of debts are effectively legally unenforceable.

 

This "signed assignment" is still worth worth pursuing in detail, I think.

 

 

The signed and witnessed assignee creditor doc is indeed the key point (legal or equitable), but agencies claim ownership whether they actually own it or not.

 

Take the Sallie Mae example. (Purely hypothetical)

 

If Arrow'head' fail to respond to your CCA request, the debt goes back to Sallie Mae and pursuit begins by other means, if the CCA exists.

 

If Arrow'head' write to you claiming to own the debt....but can't produce the legal docs...what then?? Sallie Mae may have claimed 'insurances' etc and can take no further part in pursuit so Arrow are left with an unenforceable debt. Unlikely in this particular case as the two are the same entity in all but name.

 

And if the purchaser is a totally unconnected company, an assignee with a bulk portfolio of risky debt.........the situation will depend on several factors if it came to a legal challenge. All the answers are on this thread, but as I've said before, there is no 'one size fits all', it has to be adapted to your own situation and a lot will depend on who you are dealing with, but they could actually be led into it.

 

I'm beginning to feel very uncomfortable with this subject because it's a legal minefield, and although I can see a way ahead in my own mind, it's impossible and very unwise to speculate with something which could lead to serious consequences for some. And if there is a loophole, is it wise to make it so publicly obvious???

 

I'll take a backseat again.

[Shoestring]

And if there is a loophole, is it wise to make it so publicly obvious???

 

Do you not think that that comment is a little disingenuous, if for no other reason than that it was you who openly discussed this very same point earlier in this thread. It also remains a post that you could easily have edited if you wished to invoke confidentiality. If blame is to be allocated you might start by looking in the mirror...

 

Anyway, for the sake of brevity I'm going to PM you on other the issues as I very much doubt the list has any further interest in squabbles over minutia

 

Shoestring

[Richard Spud]

Regards to All