Sale of debt to DCA

Movingon5464

Hello,
I have been reading on another forum about the issue of banks selling on debts without defaulting them and would be interested to hear what you guys think on this matter as i think it could apply to me and the other forum just seem to be arguing about it and even the site team don't agree !
The original question was - can a bank sell on a debt to a DCA without issueing a default ? The poster refers to section 87 of the consumer credit act and the debate seems to centre around if the agreement terminated when the debt is sold.
My issue is with Barclaycard (i have another thread on this) who put over 6 years of AP markers on my file and now too are the DCA they sold my debt to. Complaint quoting ICO guidelines pending but just wondering if they refuse should i tell them i think they should have at least defaulted me before selling the debt to the DCA ?

sourcrates

Oh that's a very interesting question, and it seems, on further examination, opinions differ greatly as to whether they can, or cant do so.


I would say it all boils down to the individual terms and conditions relevant to that particular agreement, the consumer credit act 1978 is a very big and complex area of law, if the debt is sold, then all rights are usually automatically assigned to the purchaser, so technically, the contract could feasibly continue to run.
For a DN to be issued, you must break the contract, I don't know if there is any legislation that states a default notice MUST be issued.


Personally I don't think there is any requirement to issue a DN before the sale of an account, companies sell debts for various reasons, not always because a debtor has stopped paying, for example, the creditor may want to get out of the money loan business, so will sell there portfolio of accounts, you would just pay the new buyer, as you did the OC, there would be no reason to issue a DN as the contract had not been broken.

Movingon5464

It is strange that this is not clearly stated somewhere in law because as you said opinions do seem to differ greatly. Will update if i find a definative answer.

Movingon5464

I spoke with Stepchange and they said that a default does have to be issued before a debt can be sold on and they state it on their website.

http://m.stepchange.org/debt-information/what-your-creditors-can-do/court-action/default-notices/

Said it is taken from section 87 of the Consumer Credit Act which lists actions the creditor can take if the debtor has breached the agreement but they need to issue a default first. I think their lawyers translate the law into layman terms.

I asked about banks selling accounts were the debtor has not breached the agreement and she said that is not dealt with under section 87 which deals specifically with situations were debtors had breached the agreement. Live accounts must be sold to a company that can continue to offer the same service I.e. another bank and not a DCA.

[Deleted User]

Technically, there should be a notice of assignment issued, but this happens rarely in my experience.

Movingon5464

The notice of assignment should be sent when the debt is sold to inform you of the sale. The default notice should be sent before this. The default should happen in a "timely" manner and a timeframe is given in the ICO technical guidance. After the account has been defaulted the OC can sell on the debt whenever they want or choose to keep it.