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  • FIRST POST
    • ScaredWitless
    • By ScaredWitless 6th Sep 17, 3:36 PM
    • 105Posts
    • 11Thanks
    ScaredWitless
    Default Notices Question
    • #1
    • 6th Sep 17, 3:36 PM
    Default Notices Question 6th Sep 17 at 3:36 PM
    I just wanted to ask a question to clarify something.

    Before a debt can be sold on to another, am I right in thinking that the original creditor has to place the account in default and send the debtor a default notice?

    If this isn't done, does it then make the sale of the debt legal or not?
Page 1
    • sourcrates
    • By sourcrates 6th Sep 17, 3:45 PM
    • 11,959 Posts
    • 11,445 Thanks
    sourcrates
    • #2
    • 6th Sep 17, 3:45 PM
    • #2
    • 6th Sep 17, 3:45 PM
    I just wanted to ask a question to clarify something.

    Before a debt can be sold on to another, am I right in thinking that the original creditor has to place the account in default and send the debtor a default notice?

    If this isn't done, does it then make the sale of the debt legal or not?
    Originally posted by ScaredWitless
    The relivant section of the consumer credit act is open to interpretation on this matter, it's a gray area.

    FOS and FCA say a default notice does not have to be sent in order for a debt to be sold.

    Look it up for yourself, sec 87 consumer credit act.

    This is the latest from the FCA :

    https://www.walkermorris.co.uk/publications/fca-publishes-finalised-guidance-consumer-credit-firms-regarding-requirement-serve-default-notices-enforcing-guarantees/#
    Last edited by sourcrates; 06-09-2017 at 3:49 PM.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • StopIt
    • By StopIt 6th Sep 17, 3:59 PM
    • 880 Posts
    • 811 Thanks
    StopIt
    • #3
    • 6th Sep 17, 3:59 PM
    • #3
    • 6th Sep 17, 3:59 PM
    I just wanted to ask a question to clarify something.

    Before a debt can be sold on to another, am I right in thinking that the original creditor has to place the account in default and send the debtor a default notice?

    If this isn't done, does it then make the sale of the debt legal or not?
    Originally posted by ScaredWitless

    No, because then a company could never sell a loan book to another company, something that happens all the time.


    The difference is that any accounts not in breach of the original T&Cs cannot be treated any differently from before the sale as the contract stays the same. A defaulted account can be treated differently, hence the recommendation, but not the requirement that a Default Notice be sent.


    After all, if you haven't paid an account for 6+ months, claiming you haven't received a notice making the agreement invalid isn't a defence when you've already breached it anyway. A default notice is a technicality, defaulting by non payment is an absolute, and one a court would recognise as fulfilling the requirements of a T&Cs breach to enable for debt collection activity, including sale of debts to a DCA to commence.
    • ScaredWitless
    • By ScaredWitless 6th Sep 17, 4:53 PM
    • 105 Posts
    • 11 Thanks
    ScaredWitless
    • #4
    • 6th Sep 17, 4:53 PM
    • #4
    • 6th Sep 17, 4:53 PM
    Thanks for the kind replies.

    Just another question.

    What happens if the account has NOT be defaulted, but has still been sold on!?

    Whats the procedure then!?
    • zx81
    • By zx81 6th Sep 17, 7:33 PM
    • 13,196 Posts
    • 13,509 Thanks
    zx81
    • #5
    • 6th Sep 17, 7:33 PM
    • #5
    • 6th Sep 17, 7:33 PM
    The procedure is that you continue to pay just as before, safe in the knowledge that the debt is legal and above board.
    • ScaredWitless
    • By ScaredWitless 6th Sep 17, 7:35 PM
    • 105 Posts
    • 11 Thanks
    ScaredWitless
    • #6
    • 6th Sep 17, 7:35 PM
    • #6
    • 6th Sep 17, 7:35 PM
    The procedure is that you continue to pay just as before, safe in the knowledge that the debt is legal and above board.
    Originally posted by zx81
    No payment has been made towards the debt since 2015.
    • sourcrates
    • By sourcrates 6th Sep 17, 7:37 PM
    • 11,959 Posts
    • 11,445 Thanks
    sourcrates
    • #7
    • 6th Sep 17, 7:37 PM
    • #7
    • 6th Sep 17, 7:37 PM
    No payment has been made towards the debt since 2015.
    Originally posted by ScaredWitless
    Limitations act requires six years of non payment before a debt is statute barred, you have only managed two, so far.

    A lot can happen in the next four years.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • StopIt
    • By StopIt 11th Sep 17, 8:45 AM
    • 880 Posts
    • 811 Thanks
    StopIt
    • #8
    • 11th Sep 17, 8:45 AM
    • #8
    • 11th Sep 17, 8:45 AM
    No payment has been made towards the debt since 2015.
    Originally posted by ScaredWitless

    Then the account is in default.


    You seem to be unaware what defaulting is.


    An account isn't defaulted by the creditor. It is defaulted by the debtor.


    By not paying an account for a period of time set out in the T&Cs of the credit facility, you fall into default.


    You do not need to be told that you have defaulted for you to have done so. The criteria of default are in the T&Cs of all credit products. Meet those terms, and you've defaulted.
    • sourcrates
    • By sourcrates 11th Sep 17, 11:40 AM
    • 11,959 Posts
    • 11,445 Thanks
    sourcrates
    • #9
    • 11th Sep 17, 11:40 AM
    • #9
    • 11th Sep 17, 11:40 AM
    There are two types of default, the one "stop it" describes above, and the other, which is when the creditor places a default on your credit file for non payment, by breaking the terms of the contract.

    They are both separate issues.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. I'm a volunteer to help the boards run smoothly, and I can move and merge posts there.
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
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