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  • rog2
    • #2
    • 22nd Aug 07, 9:57 AM
    • #2
    • 22nd Aug 07, 9:57 AM
    Does anyone know how the mechanics of banks passing debts onto colleection agencies works? Do banks sell these debts or still retain the debt on their books? Even when the debtor has reached an agreement with the agency the debt is often still passed to a new debt collector and a new negogiation is required. What is an acceptatable % to offer in full & final settlement of a debt.
    Originally posted by carter91
    Wow - you've certainly packed a lot of questions into such a small post. Let me try to give you my view:

    1. I don't think that ANYONE fully knows how the mechanics of Banks passing debts on to Collection Agencies works, including most probably the banks themselves. There is SO much discrepancy on how individual Banks, even within the same group, approach the question of 'debt' that one could easily be tempted to believe that it is often done on the personal whim of individual managers. However, most banks do have a customer charter which they should, but often don't, follow to deal with debt by offering advice and counselling, with the passing of debt to collection agencies only when all other options fail.

    2. Sometimes the banks will SELL the 'debt' to a collection Agency and sometimes they will retain ownership of the debt, with the collection agency working on a commission basis. Many banks also have their own internal debt collection agencies - whilst operating under different names, these are often 'software' based companies, where letters, purportedly from a dca, can be generated, by any member of the Bank, at the click of a mouse, on a computer.

    3. It is NOT acceptable for the 'debt' to be passed to another DCA, if you have reached an agreement, and are paying that agreement. Debt Collection Agencies SHOULD, but often don't, respect the OFT guidelines for debt collection:



    4. It is not possible to give a definitive answer on the question of 'Full and Final Settlement' offers. There are cases where creditors have settled for less than 30% of original debt, whereas the majority of creditors would try to hold out for as near to the original amount as possible.
    In making a F&F Settlement offer, you should always be prepared to negotiate - that probaby means that you should go in with your first offer, which will almost inevitably, be refused, at a level slightly lower than you can afford.
    BEFORE agreeing to ANY Full and Final Settlement Offer, always make sure that you have, in writing, a letter from the creditor/dca that clearly states that your offer will be accepted 'in Full and Final Settlement' of the alleged debt. Accept no other wording.

    Hope this helps.
    I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
    If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.

    HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7

    DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS
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