Why do banks sell 'debts' on?

Leon_Telford

Always wondered?

I used to work for RBS in CMS (Credit Management Services) and we used to have 'in house' debt collectors and 'solictors' based in the same place, RBS just under different letter headed paper.

vax2002

Publicity, threatening to stick an old ladies poodle in the microwave sounds better from a debt collector.

Leon_Telford

True,

Who are some of the worst offenders? (as in Debt collections agenices)

Tixy

In general the in house ones are not too bad. Third party debt collectors are all pretty shocking and all seem to break the OFT debt collection guidelines at times/harrass debtors.

Best way to deal with them all is to do everything in writing, don't speak to them on the phone and know your rights and their regulations/guidelines.
If people do all of those then in general you won't have too many issues with them.

Banks sell debts on to third party debt collectors when the cost of trying to recover the debt, and chance of being paid and potential long delay is being paid exceed what they can obtain for the debt today.

Leon_Telford

I don't like the 'bully tactics' third party ones would use.

Thing is not everyone has access to sites like this and knows about how shifty these people can be.

Am I right in presuming a third party debt collector would settle for a much reduced 'full and final' payment?

Tixy

Often/usually they will yes.

Although again it will depend on things like how quick you are currently paying and the size of the debt and whether you have assets etc.

If a debtor is paying £200 a month on a £1000 debt then they may well say no to any reduced offer, as its just as easy for them to wait the 5months and get the money in full.

Its not unheard of for debt collectors to decide to take a debtor to court to try to obtain a CCJ against them. If they think this might net them the full amount and be worth the costs of the court case then again they might not consider much of a discount on a reduced settlement.

Leon_Telford

What tatics are they known for using?

OrkneyStar

Used to work advising on debt, and what was more annoying was the debts being passed from one collection agency to the next....grrrr!

Tixy

Leon_Telford wrote: »

What tatics are they known for using?

The OFT guidance will tell you in a reverse way - i.e. all the things the guidelines states they must not do have been written into the guidelines precisely because there were instances of them doing these things.

UPDATED OFT Guidance on Debt Collection - READ IF YOU ARE BEING HASSLED UNFAIRLY