Default Notices Question

ScaredWitless

I just wanted to ask a question to clarify something.

Before a debt can be sold on to another, am I right in thinking that the original creditor has to place the account in default and send the debtor a default notice?

If this isn't done, does it then make the sale of the debt legal or not?

sourcrates

ScaredWitless wrote: »

I just wanted to ask a question to clarify something.

Before a debt can be sold on to another, am I right in thinking that the original creditor has to place the account in default and send the debtor a default notice?

If this isn't done, does it then make the sale of the debt legal or not?

The relivant section of the consumer credit act is open to interpretation on this matter, it's a gray area.

FOS and FCA say a default notice does not have to be sent in order for a debt to be sold.

Look it up for yourself, sec 87 consumer credit act.

This is the latest from the FCA :

https://www.walkermorris.co.uk/publications/fca-publishes-finalised-guidance-consumer-credit-firms-regarding-requirement-serve-default-notices-enforcing-guarantees/#

StopIt

ScaredWitless wrote: »

I just wanted to ask a question to clarify something.

Before a debt can be sold on to another, am I right in thinking that the original creditor has to place the account in default and send the debtor a default notice?

If this isn't done, does it then make the sale of the debt legal or not?

No, because then a company could never sell a loan book to another company, something that happens all the time.


The difference is that any accounts not in breach of the original T&Cs cannot be treated any differently from before the sale as the contract stays the same. A defaulted account can be treated differently, hence the recommendation, but not the requirement that a Default Notice be sent.


After all, if you haven't paid an account for 6+ months, claiming you haven't received a notice making the agreement invalid isn't a defence when you've already breached it anyway. A default notice is a technicality, defaulting by non payment is an absolute, and one a court would recognise as fulfilling the requirements of a T&Cs breach to enable for debt collection activity, including sale of debts to a DCA to commence.

ScaredWitless

Thanks for the kind replies.

Just another question.

What happens if the account has NOT be defaulted, but has still been sold on!?

Whats the procedure then!?

[Deleted User]

The procedure is that you continue to pay just as before, safe in the knowledge that the debt is legal and above board.

ScaredWitless

Deleted_User wrote: »

The procedure is that you continue to pay just as before, safe in the knowledge that the debt is legal and above board.

No payment has been made towards the debt since 2015.

sourcrates

ScaredWitless wrote: »

No payment has been made towards the debt since 2015.

Limitations act requires six years of non payment before a debt is statute barred, you have only managed two, so far.

A lot can happen in the next four years.

StopIt

ScaredWitless wrote: »

No payment has been made towards the debt since 2015.

Then the account is in default.


You seem to be unaware what defaulting is.


An account isn't defaulted by the creditor. It is defaulted by the debtor.


By not paying an account for a period of time set out in the T&Cs of the credit facility, you fall into default.


You do not need to be told that you have defaulted for you to have done so. The criteria of default are in the T&Cs of all credit products. Meet those terms, and you've defaulted.

sourcrates

There are two types of default, the one "stop it" describes above, and the other, which is when the creditor places a default on your credit file for non payment, by breaking the terms of the contract.

They are both separate issues.