Advice Morality & "Fairness"

Exodi

Not the usual thread on this forum but I've wanted to have an open discussion on this for a while.

I want to get an overview of peoples opinions regarding the offering of advice on dealing with (mainly) creditors. I'll explain;

It's all too common that a person will post regarding a debt owed and request advice on how to go about resolving. Typically, the advice offered will be done in stages, firstly to see if the creditor has the correct paperwork and the debt is not statue barred (CCA, Default/Termination Notice, Notice of Assignment, etc), then to offer some sort of payment plan or F&F settlement and then ways to resolve the debt.

I personally take issue with the first stage being the 'go-to' advice offered instead of the last - I've always felt it underhanded when a debtor on these forums admits their liability of a debt, yet is advised to put the creditor out to dry on technicalities - this is extremely common with DCA's (who commonly don't acquire compliant paperwork when buying debts).

I know people have an instinctive hatred of PDL's & DCA's but this is also ironically one of the reasons their interest rates are astronomical. Nowadays I'm not sure who I side with, I see more and more people joining these forums, admitting they owe money, then being advised and able to completely forfeit their part of the agreement because the creditor doesn't have a compliant CCA. I guess the natural response would be "well maybe they should work on compliance ".

So, what are all your thoughts? This is an open discussion, I'm not siding either way, I just want to make sure that our advice is correct and breeds a fair generation of Money Saving Experts.

Thanks

sourcrates

Hi Exodi,


Its a very good point you make, and i`m not sure i can give you a 100% comprehensive answer on this, we can only go on the information we are given, and generally, as a rule of thumb, we tend to come down on the side of the debtor, as usually they are less able to take the financial hit than the creditor is.


People who ask for help on these forums come from all walks of life, and from all age groups, they may owe just a few hundred quid, or many thousands, the advice generally given, is aimed at getting them out of the situation they currently find themselves in.

Debt can be a terrible place at times, let me get one thing straight, any advice i give personally is purely based on helping the OP`s situation, i never take any moral stand on such matters, for one thing its not my place to do that, life does have a tendency to throw curved balls at times, you also find debt tends to coincide with life events, mostly bad ones.

I`m afraid i cannot spare any sympathy for the banks of our fair nation, OK, some can be reasonable, others cannot be bothered, they are among the most corrupt institutions that are legally allowed to trade, (think PPI) they lie, they cheat, they use the law to their advantage, and a lot of them are also extremely incompetent.


The losses they incur, such as from defaulted accounts, are built into their business model, so they do not lose out, they also claim tax relief on those losses, then make more money when they sell these accounts on, and i could write you an essay on the morality of using debt collection agencies, but maybe that`s for another day.

When you are dealing with companies such as this, the more weapons you have at your disposal, the better, they are more than prepared to use technical argument to bolster there case, so why shouldn't you ?
The consumer credit act sets out the obligations applicable to both parties to these agreements, it also gives you certain statutory rights, which also apply equally, most creditors records on compliance are pretty woeful, a defense on technical grounds is a common occurrence in many other court cases, why should it be different for a case involving debt.


Just my thoughts, not everyone will agree.

jubilee14

Interesting post Exodi,

I see where your coming from. My personal view is I took out the debt but it became unmanagable at the expense of living day to day. So took on DMP. I didnt go down F&F settlements one as I never had the money to offer but also i felt i should at least pay back what i borrowed even if i cant pay off at the interest rates i agreed to in contracts.

I did battle to try and get interest rates down and for the first 12 to 18 months some were still charging full whack. But as I got into year 2+ the debt levels started to roll away. I upped my payments to try and pay off quicker all in all saved 6 months on original estimate but would have been quicker if interest had been frozen at the start.

I'm finishing up and feel that what i've paid is fair given the over lending but also my responsibility to pay back. The length of time ( just over 6 years) has been long enough i hope that i've learned better budgeting skills and my kids dont have expectations of getting what they want, when they want.

I can see why others want to drill down to pay as little as they can but that wasnt for me. I think i'd have just got myself in the same hole sooner than later.

datlex

Of course you could ask the morality of the interest companies charge on debts. For my own personal circumstance, the company I had my last loan with wrote to me and gave me a substantial reduction due to their internal self regulation flagging up an issue. Only contact I had with them was to check on settlement figures.
There does seem to be too much pressure to take out credit / on debt. It is advertised as a solution. Just look at the ads for a company whose name is similar to "fastdollar" they advertise themselves as being the solution to people's problems, but in reality those people would be paying 1000% apr! How far is it moral of those types of companies to cause people to take out expensive debts?
Let me be straight, I think we should pay our debts. But we should be charged fairly for those.

Suseka97

This is an interesting topic and I think worth discussing, so thanks for posting.

I have to admit that I have a similar mindset to Sourcrates on this and when I give advice its in the best interest of the OP, based on what they've posted. You'll see from my signature that I've managed down as sizeable debt and yes, I'm playing the CCA and F&F card in respect of the last £9k. We were quite happily servicing our debts and then circumstances (substantial loss of income) changed that for us. What I found incredulous is that for over a year or more my OH kept being offered more and more credit, from the same banking group -who would easily have seen that he was literally only paying the minimums and was taking out cash on a regular basis (this, I discovered, was to hide the awful truth from me because he was so desperate). They should have stopped him accessing more credit, but didn't seem particularly bothered at the time. Our starting debt position would have been a lot less had they done so.

With that said, I've always paid my dues and so at the outset was determined to pay what I had borrowed. Some stopped interest and charges (which helped) with others it continued for 18mths - 2 years. Interest stopped when the accounts were defaulted and sold, or assigned, to a DCA (again that helped). I carried on paying the agreement amount until I started to read more and more posts about unscrupulous DCAs who were buying up statute barred debts and undertaking phishing tactics, in the hope someone who is less clued up would simply pay up - now correct me if I'm wrong, but isn't that illegal.

So my mindset changed and I decided to send off CCAs to start playing them at their own game. With that said although I have a number of UEs, I'm not walking away - but have no problem with accepting discounts to clear the balance.

I think everyone has to walk their own path - but what I love about this forum, and discussions such as this, is that we can all agree to disagree (with mutual respect), at least in the main.

theoretica

datlex wrote: »

Of course you could ask the morality of the interest companies charge on debts. [...]
Let me be straight, I think we should pay our debts. But we should be charged fairly for those.

Of course, if the interest that companies could charge was limited to say 20% APR or whatever other figure was chosen then a lot of people who now take out debt would simply be turned down flat by the debt companies and not lent any money. What would a moral or fair point be to cut off people's access to debt in this way?