Old Settled Credit Card Debt

lizzie73_2

Hi I wonder if anyone can help me. In 2007 I was paying my credit cards by token payments of 1 - 2 pound a month. A friend loaned some money to help. On my behalf he wrote to the cards offering a full and final settlement figure as per CCS calculations. One company capital one wrote me a letter stating the following- To satisfy your account balance you need to pay £1000.oo by 18 Dec. Your account will be closed once your payment has cleared and show as satisfied with credit reference agencies. If the amount you are paying is less than the full outstanding balance your credit file will also show a special flag of 'partial settlement'.
The payment was made that day by the third party my friend from his account. I assumed that I no longer owed the balance as they stated on the phone that this account would be satisfied and they would not be chasing me for the remainder. I have not heard anything else from the company re any outstanding debt. What I do not understand is that I claimed ppi that I didn't know I had and capital one have took the ppi off the remaining balance. Why have they done this when they said the debt was satisfied and they have not contacted me regarding payment of outstanding amount if I still owed it. Thanks

MPH80

Let's put it this way - if your mate owed you £1000 ... said 'hey bud - I can't pay you all £1000 - can I give you £100?', you take it ... and then a day later he says 'Oh yeah - can I get the money for the drinks I bought last week?'. Would you give him the cash or would you just say 'lets take it off what you owed me'?

M.

lizzie73_2

Thanks
See the point, but what confusing me is that I thought that I had paid the settlement. I don't understand why if I owed this have they not asked me for the remaining balance.

[Deleted User]

They agreed not to chase you for it.

They didn't agree you didn't owe it.

PDF

It does state in the OP that the account would show as satisfied!

Also, if the ppi money covered the original outstanding balance, should Cap 1 update the credit report and take off the partial settlement flag?

(Before any high and mighty MSE'ers start, I'm all for people paying what they owe but this is an interesting case as they said the account would show as settled?)

chattychappy

I expect the CC's logic is this: Money was owed. You were in breach. PPI had been missold (even if this wasn't realised at the time). A deal was done on the basis of some cash in "full and final settlement". So the contract was finished with both parties discharged from their liabilities. So neither side can re-open it.

Of course it seems they "entertained" the claim for a while, determining the amount of PPI involved. But given the F+F setttlement, they probably don't see why they should pay it over.

Whether their position is valid depends on whether the original deal is legally sustainable what precisely it was. In general there is always a risk that a F+F deal can unwind if the cardholder offers part payment. It should be watertight if a 3rd party is involved (as is here), but then it's a bit complex.

lizzie73_2

I know a debt has to be paid but I think they should be more clearer i.e say you will not be chased and that you the balance is still owed. This deceives people when they state a settlement will be accepted. The following is a definition by Experian: Entry- Partial Settlement. Meaning a smaller amount has been agreed and accepted as full or final settlement of the account and the amount owed will not be recovered. They ought to make their minds up.
Thanks for posts just don't want people to make same mistake.

bigadaj

lizzie73 wrote: »

I know a debt has to be paid but I think they should be more clearer i.e say you will not be chased and that you the balance is still owed. This deceives people when they state a settlement will be accepted. The following is a definition by Experian: Entry- Partial Settlement. Meaning a smaller amount has been agreed and accepted as full or final settlement of the account and the amount owed will not be recovered. They ought to make their minds up.
Thanks for posts just don't want people to make same mistake.

Do you know and can you quote the actual sums involved, as it would put things into context. Original debt value at initial default, length of arrangement to pay and ppi payment.

I agree that they could be clearer but it may well be the case that the credit card company has still lost money on the account overall.

Hanky_Panky

I have emboldened the appropriate parts - 'To satisfy your account balance you need to pay £1000.oo by 18 Dec. Your account will be closed once your payment has cleared and show as satisfied with credit reference agencies. If the amount you are paying is less than the full outstanding balance your credit file will also show a special flag of 'partial settlement'.'

So they agreed to 'close' the account based on the payment on £1k and agreed to show the account as 'satisfied', possibly if there was a default listed but only as 'partial settlement' so not a full and final at all.

Seems entirely reasonable to me that they took the remaining balance from the ppi payout.

lizzie73_2

Thanks guys
What did not make sense is the same letter etc was sent to all cards. I made a settlement on other cards and the ppi was sent to me. Mind you at least capital one cant chase the debt I owed anymore as I don't owe it.


Took me a long time to get straight finally on that road now.

lizzie73_2

MPH80 wrote: »

Let's put it this way - if your mate owed you £1000 ... said 'hey bud - I can't pay you all £1000 - can I give you £100?', you take it ... and then a day later he says 'Oh yeah - can I get the money for the drinks I bought last week?'. Would you give him the cash or would you just say 'lets take it off what you owed me'?

M.

Plain and simple great example