credit card debt passed to third party

clanger66

Hi, I am not sure if I am posting in the right place so apologies if I'm not! My partner has credit card debt and had contacted Virgin money to say he was having difficulty making payments. He filled out an income and expenditure form and Virgin said he could pay more than he said he could. He is self employed and on a zero hours contract and has also just started a part time university course and is waiting to hear about finance(he has applied for a student loan) . He had continued to make a reduced payment to Virgin and they have now told him the debt has been passed on to a third party First Credit, even though he has been making payments. Can they do this?

StopIt

Yes they can.


If you do not meet the payments set out in the T&Cs, this is classed as a default, and means the debt can be passed to a DCA (Debt Collection Agency).


This looks like what has happened. Original Creditors do not need to accept a payment plan, and generally once people enter one, they sell the debts on.


Contact the DCA in question, set out your payment offer and they should accept it, as long as it is reasonable. Affordability is a factor here and DCA generally will accept most offers if you show that's what you can afford.

sourcrates

clanger66 wrote: »

He had continued to make a reduced payment to Virgin and they have now told him the debt has been passed on to a third party First Credit, even though he has been making payments. Can they do this?

1st credit don't manage debts, they buy them, so the money once owed to Virgin, is now owed to them instead.

This is normal practice when a debtor fails to make the contracted payments.

I can almost guarantee they will be dead easy to deal with, why am i so sure of this you ask ?

Well a short while ago 1st credit were carpeted by the regulator, the FCA (financial conduct authority) for inherent bad working practices, not observing due diligence, and telling lies to customers, treating them unfairly etc etc, and they were fined a lot of money, i believe they are still operating under a temporary consumer credit license, so basically they have to behave themselves.

sourcrates

Yep, still on interim permission :


Search Results

Firm Name
Postcode
Trading Names
Previous Firm Names
Has Disciplinary
History
Status
1st Credit (Finance) 10 LimitedRH2 7JP /
RH2 7JP

No Lapsed 1st Credit (Finance) 4 LimitedRH2 7JP /
RH2 7JP

No Lapsed 1st Credit (Finance) 6 LimitedRH2 7JP /
RH2 7JP

No Lapsed 1st Credit (Finance) 7 LimitedRH2 7JP /
RH2 7JP

No Lapsed 1st Credit (Finance) 8 LimitedRH2 7JP /
RH2 7JP

No Lapsed 1st Credit (Finance) 9 LimitedRH2 7JP /
RH2 7JP

No Lapsed 1st Credit (Finance) LimitedRH2 7JP /
RH2 7JP

No Lapsed 1st Credit LimitedRH2 7JP /
RH2 7JP

Connaught Collections, Debt Help Services

No IP issued (interim permission)

They also trade as connought collections as well.

StopIt

On a segue. Considering how bad some DCAs are who are fully authorised, just how bad must you be to be placed under interim licensing?

sourcrates

StopIt wrote: »

On a segue. Considering how bad some DCAs are who are fully authorised, just how bad must you be to be placed under interim licensing?

This bad :

http://webarchive.nationalarchives.gov.uk/20100402132045/http://www.oft.gov.uk/news/press/2009/20-09

StopIt

sourcrates wrote: »

This bad :

http://webarchive.nationalarchives.gov.uk/20100402132045/http://www.oft.gov.uk/news/press/2009/20-09

That was 9 years ago. They're still on notice?


Just cancel their license already!

Anthorn

clanger66 wrote: »

Hi, I am not sure if I am posting in the right place so apologies if I'm not! My partner has credit card debt and had contacted Virgin money to say he was having difficulty making payments. He filled out an income and expenditure form and Virgin said he could pay more than he said he could. He is self employed and on a zero hours contract and has also just started a part time university course and is waiting to hear about finance(he has applied for a student loan) . He had continued to make a reduced payment to Virgin and they have now told him the debt has been passed on to a third party First Credit, even though he has been making payments. Can they do this?

Any account can be moved or even sold to any other company. It doesn't have to be a bad debt but is more usually applied to bad debts. Notice of this change should have been provided. For example when a company consolidates its own debts.

The crucial point here is that the original credit agreement and any subsequent agreement in writing is also transferred to the new owner of the debt. So therefore if the reduced payment was agreed by Virgin in writing that still applies so he can continue to make the reduced payments. If those reduced payments were not agreed in writing by Virgin then he will have to seek agreement all over again with First Credit.

In my own personal experience albeit going back 9 years, such creditors are easier to deal with than the original creditor and are more reasonable in making agreements to pay. The evil is that the new creditor may well pass on the account again to debt collectors which may be their own in-house collectors, for example Fredrickson International acting for Lowell, itself a buyer of debts.