Can they really do this is it illegal???

bravedave1

I have recently recieved a letter from a company who acted as a sort of guarantor for a very well known hotelier. I have been told by them that i must pay a charge of £48 because the cheque i made out to the hotelier bounced!

The hotelier when given a payment by cheque have to phone this company so this company can check to see if the cheque can go ahead as payment!

The company then after the go ahead then make the payment themselves so whatever happens the hotelier is always guaranteed payment.

So in affect i am not actually paying a hotel but a contracter to them. I have spoken to this company and asked if they could explain to me how and what the charge was for. The reply was because the cheque bounced and that they had already payed the amount out they have a right to charge me for it. I at this stage was getting pretty annoyed as i had already been charged by my bank over it.

I then said about why they let the cheque go through if there was insufficient funds on my account, their reply was that they basically score you. I then asked if they have my credit rating score i then recieved the iron curtain and told they could not discuss it over the phone under the data protection act!

I would like to know is this company right to do this? and should i pay the charge or seek legal advice first?

Your help guys is much appreciated! dave

changkra

Treat it the same as a bank charge. I wouldn't pay it. I doubt very much that they would take you to court over this. Have a look at

https://www.consumeractiongroup.co.uk and post on there. good luck, just dont back down.

sweep9

A warning sign should have been in place that they use Certegy Transax cheque services. All that Transax do is check that the cheque book is valid (ie not stolen or stopped) and that the person / company presenting it, is financially viable. When presenting the cheque, you personally are saying to the hotel that the money is available in your account and they will be paid (or else it's fraud!).

The charge is a standard debt collection charge from a debt collection company. At the end of the day, you have presented a cheque that has bounced and Transax is chasing the money that is owed to the hotel (In a legal sense, they have 'bought' the debt from the hotel). It WILL affect your future credit rating / score.

Don't treat it as a bank charge and ignore, get it sorted as soon as you can or else the charges will start rising...

Dave_Brooker

bravedave1 wrote: »

I have recently recieved a letter from a company who acted as a sort of guarantor for a very well known hotelier. I have been told by them that i must pay a charge of £48 because the cheque i made out to the hotelier bounced!

The hotelier when given a payment by cheque have to phone this company so this company can check to see if the cheque can go ahead as payment!

The company then after the go ahead then make the payment themselves so whatever happens the hotelier is always guaranteed payment.

So in affect i am not actually paying a hotel but a contracter to them. I have spoken to this company and asked if they could explain to me how and what the charge was for. The reply was because the cheque bounced and that they had already payed the amount out they have a right to charge me for it. I at this stage was getting pretty annoyed as i had already been charged by my bank over it.

I then said about why they let the cheque go through if there was insufficient funds on my account, their reply was that they basically score you. I then asked if they have my credit rating score i then recieved the iron curtain and told they could not discuss it over the phone under the data protection act!

I would like to know is this company right to do this? and should i pay the charge or seek legal advice first?

Your help guys is much appreciated! dave

You bounced a cheque, you owe them the money.

lokiman

Dave_Brooker wrote: »

You bounced a cheque, you owe them the money.

Simplistic, but not necessarily correct - has the hotel been paid? If no, then pay the hotel what you owe. If yes, was that via payment from you, or payment from the collection agency? If the agency paid the hotel, and no funds have come from you, then you should send a cheque to the hotel and ask them to reimburse the collection agency themselves - you have no contractual relationship with the collection agency and it actually doesn't sound as though the debt has been assigned to the agency in the legal sense. If you had no notice of them using this collection agency prior to checking into the hotel, and you haven't signed anything accepting liability for collection fees, then they are on dodgy ground, indeed. What I find infuriating is that people in the UK are very much held financially hostage by collection agencies and the like, who dangle the threat of having your credit rating affected, even for the most spurious of claims.

asharon

ask them to break down the charge and to show why it is so much and once that is done that you will pay.

mpython

Difficult to give sensible advice without some more information.

Was there sufficient funds in your account or overdraft facility to honour the cheque when originally presented? (If not, they could argue you were trying to obtain goods or services by deception which would be a very serious matter).

Assuming there was, then what was the reason for the cheque not clearing? (Words & number not agreeing - in which case you should have the option of re-sending another proper cheque, if it was return to drawer try again in 5 days, the bank should have re-presented it).

I would imagine the company will receive a payment for every cheque they check (no pun intended). From what you have written it looks like the company is holding itself out as having bought the debt from the hotel, except AFIK they are not baliffs or debt collectors and there's been no court order to say there is a debt which can be enforced. That said, if it goes down that route, its going to be very much more expensive for you if there is a genuine debt owed.

I would send the hotel a cheque (or pay via CC etc) for the amount owing, copied to this company, apologise for the inconvenience etc. If the company continue to pursue you, I'd write again to the hotel and ask them to explain how this action fits in with their customer service offer, and ask them to get the company to stop harassing you as you've cleared the debt to the hotel. If the hotel and this company have a separate contract between themselves, that has no bearing on the contract you entered into in staying at the hotel, unless the hotel's T&Cs say they can charge you extra for bounced cheques - which I doubt is in their T&Cs, and even if it is, the hotel hasn't charged you.

Hope this helps.

Dave_Brooker

lokiman wrote: »

What I find infuriating is that people in the UK are very much held financially hostage by collection agencies and the like, who dangle the threat of having your credit rating affected, even for the most spurious of claims.

OP says the cheque bounced, he owes the hotel money, why should other instututions not be warned of him?

Simple solution, don't bounce cheques.

lokiman

Dave_Brooker wrote: »

OP says the cheque bounced, he owes the hotel money, why should other instututions not be warned of him?

Simple solution, don't bounce cheques.

The point was a general one, not specifically related to the OP, although if that 48 pound charge is some kind of spurious collection fee then, yes, my point would apply to him too. The credit-rating network in the UK is completely out of hand and is frequently used or abused, and people are frequently effectively forced into paying up sums of money that they do not legally owe, simply because they are told - regardless of whether the claim is legitimate - that if they do not pay, their credit rating will be affected. Sorry, but that's just not right. Millions of pounds are effectively extorted out of the British public each year, for monies not contractually owed, by the simple threat of libeling them to a system that they know will effect their ability to get a mortgage, credit card or even a non-PAYG cell phone.

changkra

sweep9 wrote: »

A warning sign should have been in place that they use Certegy Transax cheque services. All that Transax do is check that the cheque book is valid (ie not stolen or stopped) and that the person / company presenting it, is financially viable. When presenting the cheque, you personally are saying to the hotel that the money is available in your account and they will be paid (or else it's fraud!).

The charge is a standard debt collection charge from a debt collection company. At the end of the day, you have presented a cheque that has bounced and Transax is chasing the money that is owed to the hotel (In a legal sense, they have 'bought' the debt from the hotel). It WILL affect your future credit rating / score.

Don't treat it as a bank charge and ignore, get it sorted as soon as you can or else the charges will start rising...

My post didn't mean to infer ignore the charge but to write to them stating that it is a penalty charge etc. as you would for a bank charge. i think it may have been late when i posted

Dave_Brooker

lokiman wrote: »

The point was a general one, not specifically related to the OP, although if that 48 pound charge is some kind of spurious collection fee then, yes, my point would apply to him too. The credit-rating network in the UK is completely out of hand and is frequently used or abused, and people are frequently effectively forced into paying up sums of money that they do not legally owe, simply because they are told - regardless of whether the claim is legitimate - that if they do not pay, their credit rating will be affected. Sorry, but that's just not right. Millions of pounds are effectively extorted out of the British public each year, for monies not contractually owed, by the simple threat of libeling them to a system that they know will effect their ability to get a mortgage, credit card or even a non-PAYG cell phone.

OP's actions have lead to the problem and someone is out of pocket.

There has to be a system in place to warn lenders and providers of people who cannot or will not look after their finances in a responsible manner.

If you act responsibly and do not spend money you do not have, then you have nothing to fear from credit ratings....