Can Barclaycard pay my refund direct to DCA

Little_Mo_70

Hello
The good news is Barclaycard refunded £800 charges this week. Great.
Bad news is they are informing DCA to reduce my debt by this amount. Not great. I have a dmp set up with DCA and it is operational. Had planned paying off quite a few debts with this inc.extra monthly amount to DCA as above.

My question: If the DCA have bought the debt from Barclaycard can the bank do this as it is no longer theirs? Also, just wondering what would a DCA pay the bank for a debt of 2k?

If Barclaycard still owned the debt the 'Right of set off' would then apply but surely it doesn't if it now belongs to the DCA.

Is this just a case of Barclaycard paying themselves £800?

dunstonh

If the DCA have bought the debt from Barclaycard can the bank do this as it is no longer theirs?

How do you know that the DCA have bought the debt from Barclays? Is it not possible that Barclays contract out that sort of work to a DCA ?

There is mixed success on this at the FOS. Some cases where the debt was sold has resulted in the FOS ruling that the DCA cant have it. However, if the DCA is acting as contractor for the lender then it would not or where there is a contract that states money received has to be repaid to the debt.

The FOS would also likely view it under fairness. Initially that will work against you as effectively you have not paid them the money as you defaulted on it. Now you are are asking for a refund of money that you have not paid. That can appear greedy. However, the amounts involved and the status would have an impact on the decision.

Little_Mo_70

dunstonh wrote: »

How do you know that the DCA have bought the debt from Barclays? Is it not possible that Barclays contract out that sort of work to a DCA ?

There is mixed success on this at the FOS. Some cases where the debt was sold has resulted in the FOS ruling that the DCA cant have it. However, if the DCA is acting as contractor for the lender then it would not or where there is a contract that states money received has to be repaid to the debt.

The FOS would also likely view it under fairness. Initially that will work against you as effectively you have not paid them the money as you defaulted on it. Now you are are asking for a refund of money that you have not paid. That can appear greedy. However, the amounts involved and the status would have an impact on the decision.

Hi Dunstonh. Thanks for your reply.


I know the debt was sold because Cabot purchased it from B'card who then passed it on to a collection agency to whom I am paying a monthly fee to pay if off.

So, if the bank have sold the debt, legally, are they entitled to inform their buyer & the buyers agent to deduct the amount fo the refund from the outstanding balance?

I know it does seem greedy but it was health issues and not bad account management which caused the problem (just so you know)
and I understand the debt must be paid - which I am doing - but, there are lots of other debts too and I wanted to use the refund to pay something off them all plus I am financially very poor at the moment.

I phoned the FOS to explain all this but they said they don't give advice and I would have to start with the bank and go through the complaints process. Up to now it's taken me 6 months to get a refund and that's without involving the FOS.

So, the bank sold the debt. The bank have agreed to issue a refund. The bank are knocking it off the outstanding debt amount.

Just wanted to know my footing before I complain to the bank.
What do you think?

dunstonh

I know the debt was sold because Cabot purchased it from B'card who then passed it on to a collection agency to whom I am paying a monthly fee to pay if off.

How do you know that the debt was sold? Just because a third party collection agency is being used does not mean they sold the debt. A lot of the lenders use third party companies to contract out that work to. They dont sell the debt but pass the responsibility to the collection agency. Some will sell the debt but its impossible for the borrower to know the business arrangement the bank has with the collection agency.

I phoned the FOS to explain all this but they said they don't give advice and I would have to start with the bank and go through the complaints process. Up to now it's taken me 6 months to get a refund and that's without involving the FOS.

FOS are taking 6-18 months (getting quicker now but still will slow it up).

Little_Mo_70

dunstonh wrote: »

How do you know that the debt was sold? Just because a third party collection agency is being used does not mean they sold the debt. A lot of the lenders use third party companies to contract out that work to. They dont sell the debt but pass the responsibility to the collection agency. Some will sell the debt but its impossible for the borrower to know the business arrangement the bank has with the collection agency.

Hello Dunstonh.

"The Cabot Financial Group, which was established in 1998, buys consumer debts from banks, building societies and other major lending organisations. The company, which is owned by venture capitalists, has acquired portfolios from various well-known financial institutions, including HBOS, Royal Bank of Scotland, HSBC, Barclays and Capital One." (This copied from Cabot employee benefits site)

Cabot website states clearly they buy the debt from banks etc. and the fact that they are now using another DCA indicates to me that they own the debt. Perhaps I'm making wrong assumptions though.

ALIBOBSY

Here is the official fos guide to the set off rights which the banks base this sort of offset on.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm

Both this and legal precedence state absolutely that the refund CANNOT be paid to a third party-in this case a DCA.

However you need to establish who owns the debt. Duns is right that often banks ect use DCA's to collect on their behalf as opposed to selling the rights in full.

Cabot are mostly a DCA who buy debts in full, but I think they do do the other type of action as well.
It should be fairly clear from your latest correspondance from them. If cabot own it in full they refer to what you "owe them" and "our debt". If they are acting for the OC they keep refering to "acting on behalf of" and "our Client".

The FOS should be following the law in this respect there are definately cases where this has gone to court and been proven/upheld by the judge. BUT you need to work out if it was sold or not.

Even if they own it though the premiums and interest can be held against the account, but the extra 8% interest is for compensation so should come to you separately.

I suppose there is an arguement that the account should be taken back in house by the OC and any payments made to the DCA should be taken into account in the redress calcs. TBH the DCA are scum anyway and should just get a refund of the money they paid for the debt in the first place and any payments made should go to the OC with the account so the whole thing can be reset.

This would probably be the fairest thing for all parties as well as the removal of any defaults.
This is the only way really to ensure all parties are where they were had the PPI/charges not existed.

BTW was there PPI on this account as well as charges as both can be reclaimed?

Ali x

Little_Mo_70

ALIBOBSY wrote: »

Here is the official fos guide to the set off rights which the banks base this sort of offset on.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/40/40_setoff.htm

Both this and legal precedence state absolutely that the refund CANNOT be paid to a third party-in this case a DCA.

However you need to establish who owns the debt. Duns is right that often banks ect use DCA's to collect on their behalf as opposed to selling the rights in full.

Cabot are mostly a DCA who buy debts in full, but I think they do do the other type of action as well.
It should be fairly clear from your latest correspondance from them. If cabot own it in full they refer to what you "owe them" and "our debt". If they are acting for the OC they keep refering to "acting on behalf of" and "our Client".

The FOS should be following the law in this respect there are definately cases where this has gone to court and been proven/upheld by the judge. BUT you need to work out if it was sold or not.

Even if they own it though the premiums and interest can be held against the account, but the extra 8% interest is for compensation so should come to you separately.

I suppose there is an arguement that the account should be taken back in house by the OC and any payments made to the DCA should be taken into account in the redress calcs. TBH the DCA are scum anyway and should just get a refund of the money they paid for the debt in the first place and any payments made should go to the OC with the account so the whole thing can be reset.

This would probably be the fairest thing for all parties as well as the removal of any defaults.
This is the only way really to ensure all parties are where they were had the PPI/charges not existed.

BTW was there PPI on this account as well as charges as both can be reclaimed?

Ali x

Thanks for that Ali
No PPI.
So, at least all is not lost and in the worst case scenario, the interest can be refunded to me.
I'll write to the bank and ask for all refunds to be paid directly to me as they sold the debt. I'll see what happens. Is the bank legally bound to disclose whether the debt has actually been sold or not? On the last (and only surviving) letter from Cabots they refer to Barclaycard as the original debtor and that C/Financial will be passing 'your account' out to *........* , a debt collectiion agency, as no mutual agreement has been met' so perhaps B'card is no longer the current debtor. What do you think?

di3004

Hi

Sorry to but in, and hope you don't mind me posting.
I understand it's been some time since anyone posted on this thread, but a friend of mine, well a friend of a family member, had an illness and finally he came out of work, doctors orders and is unable to work anymore, so eventually went into hardship difficulties.

I cannot recall the problems, but aware he did put in a complaint, maybe a reclaim, ppi or charges of some kind etc...

His debt was sold on by Lloyds TSB, and he received 2 letters at the same time enclosed in the same envelope.
The one from Lloyds to state they no longer hold the account and have sold the account to Cabot.
And a letter enclosed from Cabot to confirm this as Lloyds no longer has any ties to the account, so everything must be dealt with via Cabot.

The Lloyds letter he received says something in the lines of "the bank has fully assigned all of its respective rights, title and interest in regards of the account"

Now would that mean this is absolute? so the bank has no part in it - does anyone know?

I don't want to tell him the wrong info, as there seems to be mixed opinions on this here and there.

Thank you in advance.

dunstonh

I don't want to tell him the wrong info, as there seems to be mixed opinions on this here and there.

That is because there is no hard and fast rule. Only bankrupts have a published method. The rest is left open to interpretation and opinion. Generally, the position is that if the lender had to write an amount off then they can choose to use the redress against the write off. However, some do, some dont. You are not going to get much more than that I'm afraid Di.

di3004

Cheers Dunstonh
And I have to agree.

In his case I believe if he was successful, then he would want them to use any refund towards the debt, and in my opinion I would too and would not want it hanging over me.

Here below was his letters he received a little time ago, he left here with me.
........................................................................................

Lloyds letter).
Dated 14 September 2012.

Dear Mr

We are writing to notify you that Lloyds TSB has assigned all of its respective rights, title and interest in respect of the above referenced account (including the outstanding balance) to Cabot Financial (UK) Limited effective 03/08/2012.

The total balance was £XXXX.XX, as at the date of the sake 03/08/2012. Any payment made towards your account after that date will be forwarded to Cabot Financial (UK) Limited, and will be deducted from the balance shown.

Under the terms of this assignment, and as defined in the Data Protection Act 1998, Cabot Financial (U) Limited is now the Data Controller of your personal data contained in the records of this account.

Cabot Financial (Europe) Limited has been appointed by Cabot Financial (UK) Limited to manage your account in line with the arrangements agreed with BLS Collections. It is essential that all future payment and correspondence regarding this account now will be directed to Cabot Financial (Europe) Limited.

.................................................. ..................................
(Cabot letter)

Dear Mr

Welcome to Cabot.
The Cabot Credit Management Group has recently bought the account you held with Lloyds TSB and we're now responsible for answering your queries and receiving payments.

According to your records you currently owe £XXXX.XX. If you wish to repay this amount in full now, please contact how to make your payment,

Your agreed monthly repayment plan with Lloyds TSB now needs to be maintained with Cabot. Please ensure that with immediate effect all future payments are made directly to us.

We regularly review the arrangements on our records, including the monthly payment amount.