Debt collector fees

smurkej

Hi,

I owe money for two invoices for a magazine I used to advertise in. It's a small local magazine for local traders.

The invoices amount for £90.

The letter I received today from the debt collection agency has added on compensation costs of £80 and reasonable recovery costs of £50, as well as late payment penalty interest of £8.70.

I don't mind paying the £90 to the advertiser for the two invoices, but I am not happy paying such excessive fees to the debt collection agency - unless i am not entitled to this opinion ?

Do I have to pay the fees? I am a sole trader and having read up a bit on this it appears to me that the debt collector should have complied with something called the Pre-action Protocol which came into effect on the 1st October 2017.

The reason I think that they haven't adhered to this protocol is that the envelope doesn't contain the following:

The information sheet – this is a guide which explains your rights, and gives you a step-by-step guide on what to do next.
The reply form – you need to send this back to the creditor within 30 days. Use the reply form to tell the creditor whether you owe the debt or not, to request more information or to let them know you are seeking advice.
A statement of means form – this is similar to your personal budget. Complete the statement of means form to tell the creditor about your circumstances, your income and expenditure, and any other debts you owe.

Can I just pay the advertiser via BACS for the invoices and forget about the debt collector's letter?

The way it's worded sounds amateurish, for example;

"If you are overdue in paying this account, then our clients rights to these fees is not legally contestable by you. It is Government legislation."

"If you pay the principle sum and not the fees then proceedings will be issued against you for the balance of any fees oustanding upon expiry of this letter of demand."

The expiry of the letter is 6th May.

I would appreciate any advice.

iolanthe07

Looks like a letter from a chancer. For one thing they don't even know how to spell. (It should be 'principal' it that context, not 'principle'). It does seem amateurish, as you state, and I would lean towards ignoring it, but you may want to take professional advice to be sure.

sourcrates

Hi,


What you have to remember here is this collection company do not own this debt, they are just acting as collectors here.


So how can you charge a fee on a debt you do not own ?

the answer is you can`t, what they have sent you, all nicely packaged up within a very unimpresive computer generated template letter, is an invoice.


All i can say is, in over 10 years of advising on this forum, ive yet to see any debt collector take a client to court from non payment of added collection fee`s.

smurkej

thank you both, the debt collector is called "Direct Route" and when I rang up I could hardly hear the bloke, it went straight through to him, no receptionist, and he greeted by saying "hello"

As if he was a metre away from the phone too. I know my phone line is fine, and the call sounded like he was a meter away from the phone the duration of it, it just sounded really amateurish too.

The only reason I thought I might have to pay is because they also included an A4 sheet banging on about the 'Late Payment of Commercial Debts (Interest) Act 1998'

How do I know they don't own the debt though?

The other thing which I think looks amateurish is that they sent me what looks like a flyer threatening something about ROSI, whatever that is.

https://imgur.com/HpwsfIW

sourcrates

smurkej wrote: »

How do I know they don't own the debt though?

Easy, debt collectors don’t buy debts, they just act upon instruction from their clients, in a 3rd party capacity.

Debt purchasing companies such as Lowell, Cabot, and Arrow Global buy bad debts, usually in bulk, so unless you have received a “notice of assignment” in the post, and/or a letter confirming the sale to a new owner, this company are just acting on behalf of the original client, so have no right/power or creed, to charge you anything.

What you are referring to is an “LBA” letter before action, this has not progressed that far as yet, the Pre-action protocol only applies if they intend to take legal action, which the DCA cannot do, as, I said before, they don’t own the debt.

What they have sent you is a “pay up now” threatogram

[Deleted User]

Just a scamming chancer. There are legit debt collectors and there are backstreet have a go debt collectors. Just pay the £90 directly to who you owe it to and that will probably be the end of it.

I've experienced it before from some outfit that I had never heard of with the quality of the letter looking like it had been printed off a cheap inkjet printer with a lick and stick stamp on the envelope.

smurkej

Thanks guys. I've paid the invoices just now.

So if this Direct Route company doesn't own the debt, how is it legal for them to assert that I pay them compensation and recovery costs etc.?

sourcrates

smurkej wrote: »

Thanks guys. I've paid the invoices just now.

So if this Direct Route company doesn't own the debt, how is it legal for them to assert that I pay them compensation and recovery costs etc.?

Anyone can send a letter asking for money, it all boils down to the small print in the various contracts we all sign without ever reading.


Somwere it will say they can engage debt collectors if you fail to pay, and charge you reasonable costs blah blah blah.


However these costs must be proportionate, and from what you have said, there costs are disproportionate in my view.


This is why debt collectors use fancy theatening template letters in order to get you to pay up, its a very under regulated industry, but one ive had extencive experiance with, lots of people pay up without question you see, the good old british public are fooled on a daily basis into paying debts that mostly are not even theirs, or at best are unenforcable.

iolanthe07

This is why debt collectors use fancy threatening template letters in order to get you to pay up,

They can't be all that fancy when they're full of grammatical and spelling errors. You would think that these people would at least write in correct English if they want to be taken seriously.

WhenIam64

They can't be all that fancy when they're full of grammatical and spelling errors.

There is an art, some would say a dark art, in getting peoples' attention. Speeeling and grimatical errorz catch the attention. The scams originating from West Africa have the same characteristics.

You must have been offered £20mn by now.