CONFUSED Full and final NOT WITH zero balance?

DogandBone_2

mattymoo2014 wrote: »

Can a satisfied, fully and finally settled account show a balance other than zero on credit reports?

Matty, the simple answer is yes (by mistake) ... The vital part is the settlement acceptance letter which is the new contract. If it has a clear & unequivocal statement which discharges/releases the remainder of the debt/liability then thats all that matters.

You can use that letter to have your credit files corrected... no letter, no statement = no correction.

Trying to get anything corrected on a credit file can be a nightmare, if not near impossible! Unless you have a written agreement.

DogandBone_2

mattymoo2014 wrote: »

As some of you know, I'm in the process of doing full and final settlements. I used a pretty standard letter to set out my terms, including that I wanted the balance to show as zero on my closed accounts.

Recently, I had a letter from KPR AKA Nationwide saying they agreed to the settlement and that they would "write off" the balance. So I rang to make the payment, but then the problems started. The man on the phone said the balance would still show on my credit file but that Nationwide would not pursue it. I said that was not my terms and also conflicted with their letter but he would not budge and maintained that was standard practice for his company. He also ominously said that he has had several customers having done the settlement ringing to query this and has had to inform them of the same.

In these circumstances, I refused to pay and said I would contact my Citizens Advice agent before making a final decision. She said that it is either a case of:
a) the guy does not know what he is talking about. Apparently, you can't flag a partially satisfied account without it showing a zero balance.
or
b) this is NOT a full and final settlement and I might be at risk for the balance if I pay now.

Please can I take some views here? Am I at risk? Can you insist on a zero balance? Is it possible to close an account and leave a balance on it?

Many thanks to everyone.

Be Very careful Matty, read my post on partial settlement, if you have time hold out for the necessary confirmation, a closed account has no relation to whether a debt still lawfully exists or not, point this out to your creditor. Also check out the FCA CONC 7.4.1, 7.4.2 & 7.14.14 & the National Debtline which is authorised & regulated by the FCA.

glentoran99

DogandBone wrote: »

Just goes to prove Glentoran that they were effectually accepted as full & final settlements as that's what they are.

Can i ask exactly what was stated i your settlement acceptance letters?

Ill look up the exact wording but 2 stated the accept the offer as full settlement but would be marked as partially satisfied, Halifax were a bit more definite on the partial aspect and they are the only ones that marked as partial on file

DogandBone_2

glentoran99 wrote: »

Ill look up the exact wording but 2 stated the accept the offer as full settlement but would be marked as partially satisfied, Halifax were a bit more definite on the partial aspect and they are the only ones that marked as partial on file

Ok that would help shed some light on it. As any reasonable person will understand, a debt can't be accepted as a full & final settlement unless it is classed as a full & final settlement.

If the other creditor is telling you that anything less than the total outstanding balance can only be taken as a partial settlement is telling porkies.

A partial settlement marker is just a flag the CRA use, unless the creditor is leaving the rest of the debt to exist, in which case you WILL still be liable & it's not a debt 'settlement', its a payment toward an outstanding balance.

Did Halifax tell you that you wouldn't be liable for the rest?

DogandBone_2

stevemLS wrote: »

You can't insist on anything, you are paying less than you owe.

Not sure if that's correct Steve.

If a firm has accepted an offer to settle & has agreed to write the rest of the debt off & informed the customer that concludes his liability, then the firm has accepted the offer as settlement of the customers liability, which is 'as full & final settlement'.

The customer has a right to expect the firm to confirm this in writing as the FCA states the firm MUST do that.

FCA CONC 7.14.14

If a firm accepts a customer's offer to settle a debt, it must communicate formally and unequivocally that the offer accompanied by the relevant payment has been accepted as settlement of the customer's liability. (DEBT)

[Note: paragraph 3.3h of DCG]

FCA CONC 7.4.2

If a debt will still exist then it is not a final settlement of the debt & the firm must clearly communicate this to the customer:

Where:
(1) a customer offers a settlement payment lower than the total amount owing; or
(2) a lender under a regulated credit agreement or an owner under a regulated consumer hire agreement decides to stop pursuing a customer in respect of a debt arising under the agreement;

and the debt (or part of it) continues to exist notwithstanding the acceptance of the customer's offer or the decision to cease to pursue the debt, the lender or owner must ensure that the continuing existence of the debt and the possibility of the customer being pursued by another firm who purchases the debt is explained in clear terms to the customer.

[Note: paragraph 3.3i of DCG]


In all cases CONC 7.4.1 also applies.


FCA CONC 7.4.1

Information on status of debts

A firm must provide the customer or another person acting on behalf of the customer with information on the amount of any arrears and the balance 'owing'.

[Note: paragraph 3.3f of DCG]


Did the Firm explain clearly to the customer the continuing existence of THE DEBT & the possibility of the customer being pursued by another firm who purchases the debt? (BALANCE OWING)

glentoran99

DogandBone wrote: »

Ok that would help shed some light on it. As any reasonable person will understand, a debt can't be accepted as a full & final settlement unless it is classed as a full & final settlement.

If the other creditor is telling you that anything less than the total outstanding balance can only be taken as a partial settlement is telling porkies.

A partial settlement marker is just a flag the CRA use, unless the creditor is leaving the rest of the debt to exist, in which case you WILL still be liable & it's not a debt 'settlement', its a payment toward an outstanding balance.

Did Halifax tell you that you wouldn't be liable for the rest?

Halifax said

'They are prepared to accept my partial offer as partial settlement' then went on to say 'your account will be closed and credit file updated to show the account as 'partially satisfied' the. Blah blah blah this is normal to 'show future lenders that a debt has been settled for less than the full amount owed'

Aktiv kapital said

'Upon receipt of funds your account will be regarded as paid in full and entry with cra would be updated to show partially satisfied'


Bank of ireland (agent) said

I can confirm my client has accepted your offer of £500 as settlement of your account providing payment is made by 30th April 2014.



Once in receipt of cleared funds my client will be updated accordingly and this information will be shared with credit reference agencies. It will show this account as partial settlement reflecting the fact that you have entered into a negotiated settlement amount for a sum less than the outstanding balance.

I then clarified

'Further to your e-mail I can confirm that once the agreed amount has been paid the remaining balance will be written off and not pursued by my client, or any associated third party'

And after paying I recieved a letter stating thanks for payment and its accepted as full and final settlement of the account'

BOI didn't actually update anything and I got the cra's to change it

DogandBone_2

glentoran99 wrote: »

Halifax said

'They are prepared to accept my partial offer as partial settlement' then went on to say 'your account will be closed and credit file updated to show the account as 'partially satisfied' the. Blah blah blah this is normal to 'show future lenders that a debt has been settled for less than the full amount owed'

Aktiv kapital said

'Upon receipt of funds your account will be regarded as paid in full and entry with cra would be updated to show partially satisfied'


Bank of ireland (agent) said

I can confirm my client has accepted your offer of £500 as settlement of your account providing payment is made by 30th April 2014.

Once in receipt of cleared funds my client will be updated accordingly and this information will be shared with credit reference agencies. It will show this account as partial settlement reflecting the fact that you have entered into a negotiated settlement amount for a sum less than the outstanding balance.

I then clarified

'Further to your e-mail I can confirm that once the agreed amount has been paid the remaining balance will be written off and not pursued by my client, or any associated third party'

And after paying I recieved a letter stating thanks for payment and its accepted as full and final settlement of the account'

BOI didn't actually update anything and I got the cra's to change it

Ok, one at a time:

Halifax:

Your offer was full & final NOT partial, but this is fine as Halifax has been clear in stating your debt HAS been settled.


Aktiv Kapital: ( which member by the way?/ (UK) Ltd has a NOTICE OF REQUIREMENTS IMPOSED ON ITS CONSUMER CREDIT LICENCE?)

Completely incorrect... if an account is regarded as paid in full then it has to show fully satisfied not partially satisfied.

Accepted 'as' full & final settlement & paid in full are two completely different scenarios.


Bank of Ireland (agent):

Its initial letter is toilet fodder as it does not mention DEBT/LIABILITY whatsoever, just ACCOUNT.

Its initial settlement acceptance letter therefore MUST state that upon receipt of cleared funds, your offer has been accepted as settlement of your liability.

A statement regarding the partial settlement flag can be added to the letter after the firm has stated its discharge of the debt/liability.

The letter does not mention either DEBT or LIABILITY whatsoever & the legal definition of 'account' has no relation to DEBT OR LIABILITY.

The Letter the BOI has sent you FOLLOWING payment IS the letter you & the OFT/FCA require PRIOR to payment, athough it MUST state DEBT or LIABILTY in place of ACCOUNT.

it is the actual contractual terms & conditions.

If Firms cannot get this right then how is the consumer supposed to have any confidence in the system, as no actual legal protection is being provided?

THE FCA need to address this properly & immediately.

As things stand firms are literally MAKING UP THE RULES as they go along & the consumer really IS unaware of that fact.

Whether a consumer IS actually pursued for an outstanding debt or not is irrelevant. The relevance is that the consumer MUST be made aware that a debt/liabilty STILL lawfully exists if a debt/liability does still lawfully exist.

Being advised by a firm that a liability will no longer exist, just so it can receive a payment, when that is not the case, is SIMPLY UNACCEPTABLE.

glentoran99

As a footnote the letter from aktiv (it is UK) after payment said we are pleased to confirm your accoung has reached zero balance and is now closed

DogandBone_2

glentoran99 wrote: »

As a footnote the letter from aktiv (it is UK) after payment said we are pleased to confirm your accoung has reached zero balance and is now closed

The thing is, each statement from Aktiv Kapital (UK) Ltd mentions account, not debt or liability.

'account' is just the instrument a firm uses to keep a record of payments made to that particular firm & the balance owed to that particular firm.

An actual debt/liability for a running consumer credit debt can ONLY cease to exist if all sums owing are paid, or if consideration has been provided for the whole & the lender/owner discharges the DEBT/LIABILITY (not account) in writing.

Consideration for the whole could be deemed as early payment of a negotiated lump sum in regard to the current terms in exchange for settlement of the customers debt/liability.

What firms are not telling customers is that unless a running consumer credit debt is contractually discharged then the debt/liability still exists & they could (not will) be pursued for it in the future.

AS this is clearly in breach of the Lending code, the OFT & now FCA regulations & the CPUTR 2008 then question is.. WHY are they doing this (what self benefit) & WHAT is happening with the existing debt they leave us contractually liable for?

glentoran99

DogandBone wrote: »

The thing is, each statement from Aktiv Kapital (UK) Ltd mentions account, not debt or liability.

'account' is just the instrument a firm uses to keep a record of payments made to that particular firm & the balance owed to that particular firm.

An actual debt/liability for a running consumer credit debt can ONLY cease to exist if all sums owing are paid, or if consideration has been provided for the whole & the lender/owner discharges the DEBT/LIABILITY (not account) in writing.

Consideration for the whole could be deemed as early payment of a negotiated lump sum in regard to the current terms in exchange for settlement of the customers debt/liability.

What firms are not telling customers is that unless a running consumer credit debt is contractually discharged then the debt/liability still exists & they could (not will) be pursued for it in the future.

AS this is clearly in breach of the Lending code, the OFT & now FCA regulations & the CPUTR 2008 then question is.. WHY are they doing this (what self benefit) & WHAT is happening with the existing debt they leave us contractually liable for?

I see what your saying but if an account balance reaches zero then there is no debt so nothing for anyone to chase Im happy that it's paid off and there is enough evidence of such if by some fluke someone else decides they want the same money