Selling Debt During Dispute

mr113

I hope someone can help. I have an account with Alliance & Leicester, which is currently overdrawn to the tune of £40. The unauthorised overdraft is disputed, and they have been informed that it is so, as I have not received any statements or my online banking details (despite five requests). I believe they have levied charges outside of the terms and conditions when I have not paid in more than £1000 in a calendar month (there is nothing about this in the T&C).

Whether the charge is justified or not, whilst they are in default of my request and they have been informed by me that I am disputing the status of the account, are they permitted to sell the debt to a collections agency?

never-in-doubt

mr113 wrote: »

Whether the charge is justified or not, whilst they are in default of my request and they have been informed by me that I am disputing the status of the account, are they permitted to sell the debt to a collections agency?

No they are not. No action can be taken, in line with your demand, i.e. the account is formally in dispute.

mr113

Thanks for your response.

If the bank do sell it, as they are threatening to do despite the dispute, where would that leave me? Does it make the debt null and void or would I be in a worse position?

If the latter, I would rather settle as I am only fighting this on a point of princ-ple.

Thanks

Extant

mr113 wrote: »

Thanks for your response.

If the bank do sell it, as they are threatening to do despite the dispute, where would that leave me? Does it make the debt null and void or would I be in a worse position?

As far as I am aware, the commitment not to sell a debt in dispute exists only in the Banking Code, and is not a point of law. The closest I know of is the Consumer Credit Act of 1974, where it becomes a legal matter to continue demanding payment if you cannot provide details of the debt.

never-in-doubt

mr113 wrote: »

Thanks for your response.

If the bank do sell it, as they are threatening to do despite the dispute, where would that leave me? Does it make the debt null and void or would I be in a worse position?

If the latter, I would rather settle as I am only fighting this on a point of princ-ple.

Thanks

Yea, basically the CCA (1974) stipulates that a lender cannot sell a debt whilst the account is in dispute, its all linked through s.10 of the CCA which is a cease & desist instruction that means the lender cannot do much whilst the debt is queried, i.e. in dispute.

That said, some lenders do add a default or sell the debt and if they do its irreversible so you can get the default removed and it can never be added again. If they have done this then great, means you're in the clear.

Hope that makes sense.

Legal terms, that would be used, are as follows:

This account is now formally placed into dispute and you should also consider this letter as a statutory notice under section 10 of the Data Protection Act to cease processing any data in relation to this account with immediate effect. This means you must remove all information regarding this account from your own internal records and from my records with the three (3) Credit Reference Agencies. Should you refuse to comply, you must within 21 days, provide me with a detailed breakdown of your reasoning behind continuing to process my data. It is not sufficient to simply state that you have a ‘legal right’; you must outline your reasoning in this matter and state upon which legislation this reasoning depends. Should you not respond then I expect that this means you agree to remove all such data.

Furthermore you should be aware that a creditor is not permitted to take ANY action against an account whilst it remains in dispute. The farcical way in which I’ve been treated gives a clear basis for dispute and as such the following applies:

* You may not demand any payment on the account, nor am I obliged to offer any payment to you;
* Any payment previously made should be refunded immediately;
* You may not add further interest or any charges to the account;
* You may not pass the account to a third party;
* You may not register any information in respect of the account with any credit reference agency;
* You may not issue a default notice related to the account.

mr113

Many thanks for your response, I have now issued them with a notice to cease and desist.

pink_fairy_5

hi sorry to hijack this but was just wondering if this legislation applies to mobile phone contract debts? i am being harassed after telling them over and over that it is in dispute, could i use this? they have already told me that the cca request i sent does not apply to mobile contracts. thank you.