Welcome Finance Final Settlement Offer

Irreverant

Two and a half years ago, my girlfriend took out a loan with Welcome Finance for 7 grand. For various reasons she is now paying that back at £150 per month through a debt management plan and there's about 3 years left to pay it back. I believe the interest is frozen at the moment and her statement from Welcome has her owing about £5400.

Having read about Welcome's Financial problems, I wrote a letter on her behalf offering them a full and final settlement of £2200 (approx 40p in the pound). She has had a response from them saying that they'll accept an amount of £6400, which is most generous of them as it's £1000 more than she'll pay them via the debt management company.

I'd appreciate any advice on how to proceed from here. Their response seems to be a joke (even though I'll accept the lowness of the offer was a bit cheeky) and doesn't give me any cause for optimism. I'd hoped they'd come back asking for closer to £3500 as I've read elsewhere that they're routinely accepting 65% final settlement offers. Should I just write them another letter offering a bit more?

Welcome has been so totally obstructive in a number of ways to my girlfriend sorting out her debt problems (she's been making real attempts to get it under control) that I'm tempted to drag it out as long as possible until their operations are completely wound up and they sell the debt on to another company.

DarkConvict

That does seem odd, I would ask for a statement on the account to see what the outstanding balance is.

confused90

i happen to know that welcome finance are happy to accept 45% as settlement on most defaulted accounts once they reach doorstep collection stages, therefore if they'll accept it for those cases they will probably accept it in your case too if you push your offer.

Offer them 45% as full and final settlement and see what they say, point out that you think there was a mistake in the offer they made you as it is more than you currently owe.

Keep dangling the carrot and they'll take it, just don't increase the offer.

DarkConvict

Have you had a chance to read http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

Did you use their template?

Mr A N Other
1 High Street,
Newtown,
Kent
R21 4RH
February 25, 2010

The Loan Company
Company House,
Church Street,
Newtown,
Kent,
R1 7HG

WITHOUT PREJUDICE:

Dear Sir/Madam

Re: 4563210025897412

We write with reference to the money which you are claiming on the above account.

We can confirm that we are unable to offer to pay the money which we owe in full.
However, I can raise £_____ and I want to offer this an ex-gratia payment in full and final settlement of the
account. This offer is made on the clear understanding that, if accepted, neither you nor any associate
company will take any other action to enforce or pursue this debt in any way whatsoever and that we will be
released for any liability.

We also request that, if accepted, you will make an entry on a credit reference agency file relating to the above
account as "satisfied" in full.

Payment can be made within 2 weeks of receiving your written agreement of this offer and method of
payment.

We look forward to receiving your reply.

Yours faithfully

Mr A N Other

Irreverant

Thanks for the responses. I did use the given template as a basis for the offer. I also pointed out how long it'll take to pay off the loan at the current rate and stated that there's no chance that the current monthly payment will increase.

As the interest is currently frozen (probably a voluntary gesture from Welcome, though they didn't do it immediately), the settlement figure probably has some sort of extra interest squeezed in there.

I'll write them another letter asking them to reconsider the offer.