5 Years After 'Settlement' - Debt Collectors?

Millz

I'm posting this on behalf of my partner who got contacted by a debt collection agency yesterday.

5 years ago she took out a loan to pay for an operation, but a few days after receiving the money the NHS agreed to perform the operation, so she went to the branch of the company Welcome Finance and asked how much she owed, and paid the money straight off using a bankers draft.

She's now been contacted by a debt collection agency saying there was a nominal fee outstanding, but has accumulated late fee's plus interest, and the balance is now at just under £2000.

My question is, surely this isn't allowed? A debt collection agency should have been contacted within 6 months or a year if it wasn't being paid, are they just trying to fleece my partner for money waiting this long to get more out of her?

Where do we go from here? Shall we just pay the money or who should we contact/turn to, to dispute it?

Any help would be appreciated, and ASAP as they're after the money as I type this.

Millz

Shamless bump, desperate for advice on what to do. Tempted to just pay the loan off for her (even though I can't really afford it myself) just to get them off her back.

DVardysShadow

Send them a 'prove it' letter, suitably modified to state that all money was paid off. There may have been some interest due to cover a short period where she held the money which was not collected, but nothing to justify £2000 now. If any sensible response comes back, put the matter into dispute and insist that Welcome deal with it.

edit: Don't pay these leeches just to get them off your back. Make them pay at least £2500 to get £2000

nottoolate

Dear Sir/Madam

Ref: xxxxxxxxxxx

You have contacted us regarding the account with the above reference number, which you claim is owed by ourselves.

We would point out that we have no knowledge of any such outstanding debt being owed to The Loan Company.

We are familiar with the ‘Office of Fair Trading Debt Collection Guidance’ which states that it is unfair to send demands for payment to an individual when it is uncertain that they are the debtor in question.

We would also point out that the OFT say under the Guidance that it is unfair to pursue third parties for payment when they are not liable. In not ceasing collection activity whilst investigating a reasonably queried or disputed debt you are using deceptive/and or unfair methods.

Furthermore, ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment amounts to physical/psychological harassment.

We would ask that no further contact be made concerning the above accounts unless you can provide evidence as to our liability for the debt in question.

We await your written confirmation that this matter is now closed. Otherwise we will have no option but to make a complaint to the trading standards department and consider informing the OFT of your actions.

We look forward to your reply.

Yours faithfully

Millz

The biggest worry we have is if we take time to drag it out, can she end up getting a default put on her credit history? We're looking to buy a new house together, so if they end up putting a mark on her credit file we'll be stuffed for the next 6 years. They haven't done anything yet, but she's just desperate to hand over the money to not take the risk of marking the credit file.

*Edit* - Also, thanks for the responses so far, much appreciated.

antonia1

[STRIKE]Have you checked her credit record to check that a default has not already been placed on her file?[/STRIKE]

Also, are you in Scotland? Is it definitely 5 years from the date she paid it back? Debts are statute barred in England and Wales after 6 years, 5 if in Scotland.

Millz

She's registered on credit expert. She has a default from 5 years ago (which was due to a Gym not cancelling membership after being instructing to do so resulting in unplanned overdrafts after she moved away). No default has been registered regarding this dispute.

Based in England, so not exempt as they've waited until nearly the last minute to make contact (I presume in an attempt to get as much money as possible out of her!).

magpiecottage

Welcome Finance is actually in administration.

My inclination would be to complain to Welcome Finance in the first instance anyway. Although in administration, it DOES still exist and from 6 April 2007 (which is more than five years ago), consumer credit matters fell under the jurisdiction of the Financial Ombudsman Service.

Your complaint is that you paid the settlement figure they quoted and now after five years without further reference to you they have set a debt collector on to you.

I they do not give you a satisfactory answer within 8 weeks of receipt (allow nine weeks to hear back), you can take them to the Financial Ombudsman Service.

Write (now) to the debt collector, telling them that you deny the debt and have raised a complaint with Welcome Finance over it.

The DCA cannot proceed until the matter is resolved (or if it does, you can make a complaint against it and if necessary take it to FOS too).

FOS would either uphold your complaint and force them to cancel the supposed debt or reject it. This would initially be done by an adjudicator and either party can appeal this to an Ombudsman. The Ombudsman's decision is then legally binding on both parties IF YOU ACCEPT IT - but not if you don't.

This means if it gets as far as an Ombudsman and they find in your favour then, provided you get the acceptance of the decision to FOS within the time limit (usually a month) the debt will not exist.

If they find against you then the debt still exists but, if you do not accept the decision then you have not acknowledged it.

Since you have thus far not acknowledged that you owe anything, or made a payment, the likelihood is that by the time the Ombudsman has made the decision and they have finally attempted to take you to court the six year limitation period will have expired.

antonia1

As for a new default, I *think* they have to issue a default within a reasonable time period after you actually defaulting, so it they added one 5 years later you could dispute it. I will see if I can find some documentation to back this up.

ETA: This document from the Information Commissioner's Office says a default should be issued between 3 and 6 months after non-payment.

http://www.ico.gov.uk/~/media/documents/library/data_protection/detailed_specialist_guides/default_tgn_version_v3%20%20doc.ashx

Millz

Thanks very much for the reply. I couldn't persuade her to not pay the debt (before disputing it) as she's paranoid it will affect her credit report - and that's something neither of us want, so she's paid it (against my will).

It looks like we'll be going down the channel of attempting to claim the money back, which will probably be impossible now as she's effectively accepted the debt.

DVardysShadow

Millz wrote: »

Thanks very much for the reply. I couldn't persuade her to not pay the debt (before disputing it) as she's paranoid it will affect her credit report - and that's something neither of us want, so she's paid it (against my will).

It looks like we'll be going down the channel of attempting to claim the money back, which will probably be impossible now as she's effectively accepted the debt.

I think I speak on behalf of everyone who posted. I'm gutted. £2000? And presumably she did not send it with a letter disputing the claim and indicating she would claim it back?

That is £2000 which has made them bigger and bolder for next time. Expect more spurious claims where they try and stick even more outrageous alleged debts. As it was 5 years ago, the worst damage would be one year with the default on her record and a fair chance of overturning that because it would ....

.... why bother?