Removal of 3rd Party (DCA) Defaults

the_worm_that_turned

In 2011 I made an offer to Bank to settle a debt for a credit card. The offer was accepted. The debt was written off. (I will explain my process in a separate post). The validity of any Default applied by the Bank is a separate matter that is irrelevant to these matters I feel.

A 3rd party interloper (referred to on here commonly as DCAs) claims that the account has been transferred to them via assignment.

The latest letter from the DCA that I have bothered to read (all others returned to sender - see separate post on this too) does not mention an amount they claim is owing. I wonder what they have actually bought from the Bank?

What is most intriguing about this is that upon settlement of the account, the Bank were instructed by me to remove any derogatory remarks. Instead they deleted ALL history from the Credit Report! And it would appear subsequently sold the account on. Why they did this one can only speculate upon but I have raised my concerns with the Bank after receiving threats from a DCA for a settled account.

The DCA, according to their correspondence, has their registered office in Guernsey. So my first question is:
1) Do companies registered in Guernsey have any jurisdiction/right to attempt to collect alleged debts with individuals in England who may be subject to English Law?

I recall no receipt of a Notice of Assignment from the Bank, which in light of the above is not surprising.

The alleged default dates back to mid-2011 and is applied to the Credit Report by the DCA. So Question 2:
2) Can a DCA apply a previous default (i.e. one that existed with the original creditor) or do they need to request payment and then serve their own Notice of Default as per requirements set down in legislation?

And finally, call me an old cynic, but I find it highly unlikely that the Bank will thoroughly investigate this, hold their hands up to the "mistake" and offer an apology, or compensation, or both. So question 3:
3) If my investigations lead me so far, do I take the civil, or criminal or both route(s) to gain some form of justice/compensation for the Bank and DCA's actions?

Tixy

1) Do companies registered in Guernsey have any jurisdiction/right to attempt to collect alleged debts with individuals in England who may be subject to English Law?

yes

2) Can a DCA apply a previous default (i.e. one that existed with the original creditor) or do they need to request payment and then serve their own Notice of Default as per requirements set down in legislation?

yes, when a debt is past to a debt collection agency one of 3 things happen
a) they original creditor continues to report and the DCA puts nothing on your file
b) the original creditor removes their entry and the DCA puts on a new entry in their name but with all other details the same - i.e the same default date.
c) the original creditor marks their entry as debt assigned and the DCA puts on an entry in their name, still with the same original default date. You see both entries but potential lenders searching your file only see the second 1.

A DCA is not required to send out a new notice of intention to default, equally they are not allowed to change the default date.

3) If my investigations lead me so far, do I take the civil, or criminal or both route(s) to gain some form of justice/compensation for the Bank and DCA's actions?

If your complaint is not dealt with satisfactorily then your next step would be to complain to the financial ombudsman and the FSA

Tixy

If you settled the debt for a reduced settlement did you get a written letter from the creditor that the payment was in full & final settlement of the debt and that you would not be chased further for the balance by them or by any other parties?

the_worm_that_turned

Tixy wrote: »

If you settled the debt for a reduced settlement did you get a written letter from the creditor that the payment was in full & final settlement of the debt and that you would not be chased further for the balance by them or by any other parties?

Interesting that you should ask Tixy, and thanks for your earlier comments too - btw, what are your thoughts on the Bank deleting all information (inc payment history etc) from Credit Reports?

Settling a debt can be done in a number of ways. The way I approached it was totally honest, upfront, unambiguous and explicit.

I should be noted that I challenged the alleged debt and put the account into dispute BEFORE any Notice of Default was issued.

I sent an OFFER (not letter) to the bank that clearly stated my intentions and of course the offer. It said (paraphrased as correspondence is at home):

I [my name] offer £[amount] as an ex gratia payment to [bank] as full and final settlement for the alleged balance outstanding on account [number added] to be paid in five (5) equal monthly installments with the first payment attached to this offer. Your removal of the attached cheque is your acceptance of the offer. Upon receipt of the final installment you shall mark the account as settled in full with all external Credit Reference Agencies and you shall not attempt to sell, transfer or assign it to any third party whatsover.

The Bank removed and cashed each cheque (1 to 5), which were stapled to the offer and subsequent payment letters, and the debt become extinguised, account settled. Of course they attempted to deny it was settled upon receipt of a letter after the last cheque payment that confirmed the situation but I stood firm, explained the situation to them again.

At this point all information of payments received by the Bank mysteriously disappeared from the Credit Reports. A while later a DCA attempted to chase for a non-existent debt.

I have all the evidence to prove what has happened. Immoral in my opinion.

Tixy

the_worm_that_turned wrote: »

btw, what are your thoughts on the Bank deleting all information (inc payment history etc) from Credit Reports?.

If the bank had not agreed to your settlement request, then when they sold the debt on it is quite usual for them to remove their whole account entry and for a debt collector to put on an entry in their name at a later point.
I suspect that is what happened and why the whole record of the account went.


As to the way you did your settlement offer and whether they are bound by it is a separate issue.
You could complain to the FOS and/or FSA about the entries on your file.

If the DCA attempt to take commence court proceedings against you then I guess at that point the court would decide whether or not the bank were bound by the conditions of your settlement offer and whether the debt was fully settled at that point.

the_worm_that_turned

Tixy wrote: »

If the bank had not agreed to your settlement request, then when they sold the debt on it is quite usual for them to remove their whole account entry and for a debt collector to put on an entry in their name at a later point.
I suspect that is what happened and why the whole record of the account went.


As to the way you did your settlement offer and whether they are bound by it is a separate issue.
You could complain to the FOS and/or FSA about the entries on your file.

If the DCA attempt to take commence court proceedings against you then I guess at that point the court would decide whether or not the bank were bound by the conditions of your settlement offer and whether the debt was fully settled at that point.

But the Bank DID accept my offer and are therefore bound by it. A separate contract was created at the point that the Bank chose to remove the first stapled cheque and therefore ACCEPT my OFFER. Consideration was provided by both parties and a meeting of minds cannot be denied i.e. a machine didn't take off the stapled cheque, the offer MUST have been read and therefore accepted. If the Bank didn't want to accept the offer all they needed to do was return the offer with the cheque still attached.

At this stage there is no information about my previous impeccable payment history (prior to the account going into dispute) and only a single entry by the DCA for a default.

Just because a Bank doesn't send a letter confirming acceptance of an offer doesn't mean they do not accept an offer. There are plenty of ways to skin a cat, or in this case accept an offer.

Thrugelmir

the_worm_that_turned wrote: »

But the Bank DID accept my offer and are therefore bound by it. A separate contract was created at the point that the Bank chose to remove the first stapled cheque and therefore ACCEPT my OFFER.

You owed money under a contractual arrangement.

You cannot unilaterally change the terms and conditions of that agreement.

Sorry the law does not work in the way you describe.

MisterBaxter

This sort of thing really interests me. I don't have an answer but it does beg the question as to whether or not by putting new contract terms to them which they took payment for without challenge serves to amend the original contract or create a new contract.

Is it a unilateral amendment or extinguishment of the contract where new terms are proposed and does taking payment following the proposal if new terms have the affect of accepting those terms.

The bank could have simply returned the cheque(s) and letter(s) stating that they did not accept the new terms. They could have kept and cashed the payments and written back advising that they didn't accept the new terms but were keeping the payments as consideration under the old terms but they chose to keep the payments without challenging the new terms and insisting that the original contract was in force.

To the OP, if you take this all the way please post your outcome, I would like to know what the ombudsman view is.

the_worm_that_turned

MisterBaxter wrote: »

This sort of thing really interests me. I don't have an answer but it does beg the question as to whether or not by putting new contract terms to them which they took payment for without challenge serves to amend the original contract or create a new contract.

Is it a unilateral amendment or extinguishment of the contract where new terms are proposed and does taking payment following the proposal if new terms have the affect of accepting those terms.

The bank could have simply returned the cheque(s) and letter(s) stating that they did not accept the new terms. They could have kept and cashed the payments and written back advising that they didn't accept the new terms but were keeping the payments as consideration under the old terms but they chose to keep the payments without challenging the new terms and insisting that the original contract was in force.

To the OP, if you take this all the way please post your outcome, I would like to know what the ombudsman view is.

I'm glad it interests you too because I feel it is MASSIVELY important. It is very simple to do and it shows that, regardless of what the banks or other authorities might want us to believe, we do have equal (and in my opinion more) power in contracts. At the end of the day, we are the living breathing men/women and they are the legal fictions i.e. Ltd companies, LLPs or PLCs (in other words pieces of paper). Only we can breathe life into these contracts or suffer actual genuine loss.

With regards to the Ombudsman, I am not sure this is the best approach, as I will attempt to explain...

In a separate situation with a separate bank I was being requested to make additional payments to a "Private" current account (i.e. one that you pay monthly for) that had an overdraft facility in place (that wasn't maxed-out). For genuine reasons I felt this was an unfair and unaffordable request, so I requested proof that I was under any obligation to do so. For over 2 years the bank failed to produce any such evidence but nevertheless put the account into default, despite my dispute.

I decided to remain in honour with the bank by making monthly payments of what I could afford. I used the following process and text, with a cheque [postal order could have been used] attached (stapled *IMPORTANT*) to the offer:

Official Offer
Offer to [bank] by [my name] to now operate on account [number] £[affordable amount] effected monthly as satisfaction on all account demands/obligations

This is, IMO, an extremely powerful (and to the bank frightening) process as I feel it ensures that one cannot be found to be in dishonour or breach of contract. As to whether this offer amends the existing contract or creates a new one, I cannot be certain.

The bank continued to accept these monthly payments for 6 months and then began returning them. I used a similar process as before by saying that "I do not agree to your attempts to amend the contract that is currently in place" and "I will continue to make monthly payments as per our contract and if you return the cheque again then both parties shall agree that the debt no longer exists and that I will no longer be pursued for it [etc.]", paraphrased as correspondence is at home.

I had to stand very firm here and rebut any allegations that I deemed as false/inaccurate in their correspondence. It is my opinion that the bank was constantly attempting to re-amend the contract in their favour.

They threatened court action and eventually took out a claim via Northampton County Court (Bulk Centre); again very very sneaky as I had raised an official complaint prior to court proceedings that remained unresolved (i.e. they were not in a position to commence proceedings). They apologised and agreed not to proceed any further until the complaint was resolved (including any decision by the Financial Ombudsman Services (FOS)).

Naturally the bank didn't uphold my complaint, and neither did the adjudicator (non-qualified) nor ombudsman (solicitor) at the FOS. This alone caused me concern because the FOS have admitted to me in writing that the decisions reached by the adjudicator and solicitor are NOT based on law and involve their opinions!! I argued that this is unacceptable and that if a different adjudicator or solicitor read my case a different outcome may be reached, they did not deny this outcome!! So that is why the FOS is not, IMO, the correct approach. The Official Offer above, and the original offer in the opening post are based on my interpretation of law, not opinion. So a court, is, again IMO, the preferred route here.

What was interesting though is that following the "non-binding" outcome of the FOS, the bank have not taken any further action and the court case is sitting in limbo since November 2013, without a defence being entered by me. And the official outcome published by the FOS on their website states in the background:

Mr F has an overdraft on his current account with [bank]. He sent a cheque for £[monthly amount] with a letter saying that if the bank returned the cheque “we shall both agree” that no obligation would remain and that the debt would not be enforced or pursued and that he would be released from liability. [Bank] returned the cheque. Mr F says he was therefore released from liability to repay the overdraft. [...] The bank had accepted his offer and there was a contract. [...]

I believe it is this FACT that has stopped the bank from taking it any further, or it could be they are accepting they have not been very fair, or are just waiting!

BillJones

the_worm_that_turned wrote: »

But the Bank DID accept my offer and are therefore bound by it.

That's not necessarily the case. People will often try to insert a clause such as "by opening this letter you've agreed to my terms", but this is often not enforceable in law. It's pretty likely that you saying that if they do X then they are agreeing to Y is not enforceable in law.

The opposite view is often expressed by "freemen on the land" type of people, who will tend to demand that company is bound by whatever terms the person chooses to state, but that they themselves are somehow exempt, and can just choose not to be bound by rules that they don't agree.

These arguments tend to be ineffective when a case does eventually come to court, and they often seem to be based on some very shaky interpretations of the aw of the land.

the_worm_that_turned

BillJones wrote: »

That's not necessarily the case. People will often try to insert a clause such as "by opening this letter you've agreed to my terms", but this is often not enforceable in law. It's pretty likely that you saying that if they do X then they are agreeing to Y is not enforceable in law.

The opposite view is often expressed by "freemen on the land" type of people, who will tend to demand that company is bound by whatever terms the person chooses to state, but that they themselves are somehow exempt, and can just choose not to be bound by rules that they don't agree.

These arguments tend to be ineffective when a case does eventually come to court, and they often seem to be based on some very shaky interpretations of the aw of the land.

I am not a freeman on the land or an advocate of their beliefs.

However, I think we must be careful to not broadly dismiss individual actions like mine due to what others may choose to do.

In my case a contract was already in place. This is very important. As both parties are already in a contract either party has the right to attempt to amend the contract or terms within to form a new or updated (effectively the same thing) contract.

In relation to the OP, the bank will clearly claim that they took the payments as "token payments" towards the debt, which they are fully entitled to say. The fact remains however that the letter that the payments were stapled to made it clear that they were not token payments. It is down to the party that claims they are not token payments to continually rebut the other party's claims, otherwise they stand as fact.

If both parties do not reach an agreement then it may well be down to a judge to adjudicate and produce ruling/judgement binding on both parties.

When considering the amount that was originally outstanding, prior to the settlement, I would suggest that the bank felt they would lose if proceedings commenced (particularly as the same bank took me to court for a lesser amount). This is why, IMO, they sold the settled account to a 3rd party interloper. Neither party has attempted to take me to court since 2011.

Whether any of this amounts to fraudulent activity, I cannot be certain and my investigations continue.