Help please with a Social Fund Loan

serendipity102

I got a letter today from DWP saying that I owed £785 and demanding immeadiate payment. I had no idea what it was about but when I called them they told me that they had given me a social fund loan in 1999. To be honest, I have no recollection of this but it was 1999 that i split with my hubby so i guess i may have had a loan. I explained that I have just been made redundant and they are wanting a minimum of £25 a month to repay it. I dont have anything like that available but where do I stand? 13 years seems like a bloody long time to take before they tell me I owe them money but its the first letter I have had from them!

fermi

If yours, then it is statute barred. Meaning that they are barred from taking court action for it.

They can ask you to pay. They can recover it by deducting from any benefits you receive now or in the future. But that is all they can do.

fermi

If you don't recall having the loan, then make them prove it.

Dear Sir/Madam

Reference number :

You have contacted me regarding the account with the above reference numbers, which you claim are owed by myself.

I would point out that we have no knowledge of any such debt(s) being owed to DWP.

Please provide by return proof that these debts are owed by myself.

Failure to do so, or you passing the debts to an external collector while in dispute, will be treated as harassment.

We would further note that based on the information you have supplied, this account would also be statute barred under the Limitation Act 1980

Under the Limitation Act 1980 Section 5 "an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued".

Consequently any legal action you may contemplate will be barred, and will be defended in full.

Should you attempt to pass these debts to and external debt collector, I would point out that they are bound by the guidelines issued by the Office of Fair Trading.

The OFT say under their Debt Collection Guidance on statute barred debt that "it is unfair to pursue the debt if the debtor has heard nothing from the creditor during the relevant limitation period".

Furthermore that the OFT Debt Collection Guidance states further that "continuing to press for payment after a debtor has stated that they will not be paying a debt because it is statute barred could amount to harassment contrary to section 40 (1) of the Administration of Justice Act 1970" and the Consumer protection from Unfair Trading Regulations.

Attempting to collect these debts via an external collector WILL result in that collector being reported to the OFT and trading standards, and the accounts returned to yourselves.

We would ask that no further contact be made requesting payment concerning the above accounts unless you can provide evidence of both:

(1) proof of my liability regarding this debt.

and

(2) payment or written contact from me in the relevant period under Section 5 of the Limitation Act.

I look forward to your reply.

Yours faithfully

Apples2

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=25_liability_for_debts_and_the_limitation_act

Benefit overpayments and social fund loans

The Department for Work and Pensions (DWP) has six years to take action through the courts to recover benefit overpayments and social fund loans. This time starts running from the date of the final decision made on the overpayment and from when the social fund loan was due to be paid. But the DWP are still allowed to make deductions from your benefit for a debt over six years old as they don't need to go to court to do this. This applies to overpayments of benefit such as Income Support, Jobseeker's Allowance, Employment and Support Allowance, Pension Credit, Housing Benefit, Council Tax Benefit and paying back social fund loans.

big question I suppose, when was the loan due to be paid (I assume they mean repaid to them)?

serendipity102

Thank you for your help - it really is much appreciated! Had I have received this letter a couple of months ago I would have just dug deep and coughed up. I really have no re-collection of it but tbh around that time I had quite a lot of stuff going on! The letter they have sent me says 'please pay back the money owed by 14/03/2012. If you cannot pay this amount in full we can discuss terms for repayment' ................. 'if we do not hear from you by 14/03/2012 we will consider taking further action to recover this money from you, therefore please do not ignore this letter.'

My circumstances now mean that, despite my redundancy, I am unlikely to claim any benefits in the foreseeable future.

From your replies am I right to assume that I should send the letter quoted above and there isnt anything they can do to collect this until some future time I claim again?

I dont want to sound like someone who runs away from debts, but right now I have no re-collection and no money!

fermi

Apples2 wrote: »

big question I suppose, when was the loan due to be paid (I assume they mean repaid to them)?

Social fund loans are technically due for repayment as soon as they have been made, or at least very shortly afterwards. Certainly not 13 years later.

Anyway, the "cause of action" for these is either when the loan is made or shortly afterwards. There is no case for it being within the last 6 years.

fermi

serendipity102 wrote: »

I dont want to sound like someone who runs away from debts, but right now I have no re-collection and no money!

That is the point.

You tell them...

(1) You have no recollection of the debt, so you require proof that you owe it.

(2) That on the info they have given, it would also be statute barred.

You can use a letter similar to the one above, write your own, or whatever makes most sense to you.

serendipity102

Just done another google search and Shelters website says its not statute barred - I am not allowed to post links as a new user but my google search criteria was:

can social fund loans be statute barred

fermi

The info on that shelter page is wrong/misleading.

Thanks though, as I will get on to them to correct that.

Apples2

serendipity102 wrote: »

Just done another google search and Shelters website says its not statute barred - I am not allowed to post links as a new user but my google search criteria was:

can social fund loans be statute barred

I think it is a little grey. As fermi has described, it CAN become SB in as much as they cannot drag you through the courts, appoint bailiffs etc, but they CAN still reclaim the money via benefits.

McKneff

Good old Ferni, excellent advice once again.:T