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Irresponsible lending on account in default

Please can anyone advise if they have successfully had a claim for irresponsible lending from a credit card that is now in default and has been passed to another company. Would the refund be paid off this first or would this all come to myself because the debt / default has been passed to another company. The reason i ask is that my amount in default is quite large but they have offered to settle at 20% and therefore I would rather do that than my refund be used to pay the full 100%. I just wondered if anyone knew about this as I can’t find any info anywhere
Ppi refund of £1900 - awaiting tax back (First Direct)
Catalogue settled irresponsible lending claim £2400 (Very)
Loan company settled irresponsible lending claim £1200 (Hitachi)
1st credit card settled on irresponsible lending claim £300 (FOS recommendation-Yorkshire Bank TSB)
2nd credit card settled on irresponsible lending claim £665 (FOS decision- Fluid)
3rd credit card settled on irresponsible lending claim £2650 (FOS decision-Barclays). Tried to settle for £500 less and although FO decision agreed that they were to pay all interest charges and fees they only paid interest. Challenged and FO demanded fees and charges as well. 
4th credit card settled on irresponsible lending claim £1351 (FOS decision-Capital One)
5th credit card settled on irresponsible lending claim £10,250 (FOS decision - Halifax bank of Scotland). They tried every trick in the book not to pay out. This took 18 months and lots of paperwork. 
Awaiting 5 more credit cards (Tesco/mbna/first direct/Barclays egg/Santander) and 4 loan irresponsible lending claims (Black Horse/amigo/1st Direct/psa finance). 
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Comments

  • If you are successful with 100% and it’s proven it shouldn’t have been lent to you then I think whay usually happens is they’d buy the debt back and use the refund to payback the balance and remove it from your reports and such I believe?

    Best to look at debtcamel

    https://debtcamel.co.uk/refunds-catalogue-credit-card/


  • Please can anyone advise if they have successfully had a claim for irresponsible lending from a credit card that is now in default and has been passed to another company. Would the refund be paid off this first or would this all come to myself because the debt / default has been passed to another company. The reason i ask is that my amount in default is quite large but they have offered to settle at 20% and therefore I would rather do that than my refund be used to pay the full 100%. I just wondered if anyone knew about this as I can’t find any info anywhere
    An irresponsible lending complaint (and generally speaking, good luck with that) would only have the interest refunded.  Any capital outstanding will need to be repaid.

    The plus would be the FOS would require the account to be wiped from your credit report, as silly as that is.
  • Per your other post asking the same thing, a credit card isn't lending to you, that is irresponsible spending and they can offset any refund against any debts if they have clawback rights
  • adamp87
    adamp87 Posts: 884 Forumite
    Fourth Anniversary 500 Posts Name Dropper
    y3sitsm3 said:
    Please can anyone advise if they have successfully had a claim for irresponsible lending from a credit card that is now in default and has been passed to another company. Would the refund be paid off this first or would this all come to myself because the debt / default has been passed to another company. The reason i ask is that my amount in default is quite large but they have offered to settle at 20% and therefore I would rather do that than my refund be used to pay the full 100%. I just wondered if anyone knew about this as I can’t find any info anywhere
    An irresponsible lending complaint (and generally speaking, good luck with that) would only have the interest refunded.  Any capital outstanding will need to be repaid.

    The plus would be the FOS would require the account to be wiped from your credit report, as silly as that is.
    Not necessarily if they deemed it should never have been lent in the first place I’ve seen the debt completely written off for some people.
  • sourcrates
    sourcrates Posts: 30,658 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 13 January 2022 pm31 8:22PM
    Its more difficult to prove a complaint of this nature with a credit card, usually the only time redress will be paid is if they continued to charge you default fee`s when you were struggling with repayments, Barclaycard are currently redressing historic fee`s on a lot of their credit card accounts, some going back over 10 years.

    But to answer your question, any redress would offset any outstanding balance first, as mentioned above, if your complaint was upheld, the debt would be brought back inhouse by the original creditor, the redress would be deducted, and dependant on what they offer you, it may or may not settle your entire debt, usually it would be a refund of interest and any charges, plus statutory interest @8% per annum.

    If they are offering to settle at only 20%, then it sounds very much like there may be either enforceability or limitation issues with that account.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Sourcrates thank you so much for your helpful advice. I assume that if I settle at 20% and then the claim is upheld then the debt is already settled so any refund would come to myself. The other 80% wouldn’t be deducted?
    Ppi refund of £1900 - awaiting tax back (First Direct)
    Catalogue settled irresponsible lending claim £2400 (Very)
    Loan company settled irresponsible lending claim £1200 (Hitachi)
    1st credit card settled on irresponsible lending claim £300 (FOS recommendation-Yorkshire Bank TSB)
    2nd credit card settled on irresponsible lending claim £665 (FOS decision- Fluid)
    3rd credit card settled on irresponsible lending claim £2650 (FOS decision-Barclays). Tried to settle for £500 less and although FO decision agreed that they were to pay all interest charges and fees they only paid interest. Challenged and FO demanded fees and charges as well. 
    4th credit card settled on irresponsible lending claim £1351 (FOS decision-Capital One)
    5th credit card settled on irresponsible lending claim £10,250 (FOS decision - Halifax bank of Scotland). They tried every trick in the book not to pay out. This took 18 months and lots of paperwork. 
    Awaiting 5 more credit cards (Tesco/mbna/first direct/Barclays egg/Santander) and 4 loan irresponsible lending claims (Black Horse/amigo/1st Direct/psa finance). 
  • adamp87 said:
    y3sitsm3 said:
    Please can anyone advise if they have successfully had a claim for irresponsible lending from a credit card that is now in default and has been passed to another company. Would the refund be paid off this first or would this all come to myself because the debt / default has been passed to another company. The reason i ask is that my amount in default is quite large but they have offered to settle at 20% and therefore I would rather do that than my refund be used to pay the full 100%. I just wondered if anyone knew about this as I can’t find any info anywhere
    An irresponsible lending complaint (and generally speaking, good luck with that) would only have the interest refunded.  Any capital outstanding will need to be repaid.

    The plus would be the FOS would require the account to be wiped from your credit report, as silly as that is.
    Not necessarily if they deemed it should never have been lent in the first place I’ve seen the debt completely written off for some people.
    There is no obligation for them to do so.

    Debts have been written off for a variety of reasons but that is purely down to the lender choosing to do so, not because they have to.
  • Sourcrates thank you so much for your helpful advice. I assume that if I settle at 20% and then the claim is upheld then the debt is already settled so any refund would come to myself. The other 80% wouldn’t be deducted?
    No.

    You're muddying the waters significantly by trying to have your cake and eat it too.  You only have two choices, settle at 20% and walk away or go ahead with the complaint and roll the dice. 
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    1,000 Posts Second Anniversary Photogenic Name Dropper
    edited 14 January 2022 pm31 9:40PM
    y3sitsm3 said:
    Sourcrates thank you so much for your helpful advice. I assume that if I settle at 20% and then the claim is upheld then the debt is already settled so any refund would come to myself. The other 80% wouldn’t be deducted?
    No.

    You're muddying the waters significantly by trying to have your cake and eat it too.  You only have two choices, settle at 20% and walk away or go ahead with the complaint and roll the dice. 

    Actually.... If the lender sells on the debt and has no clawback rights, and the debt buyer settles as a %, it's not impossible that the complaint could succeed and the original lender has to pay it out. There were a few PPI complaints like this where cards were long closed and sold onto debt collectors, then a PPI complaint was done against the original lender who had sold on the debt and they had to pay out. The FOS actually covers this on their site (for PPI) where a lender has accepted the money from the debt buyer as the final stage before closing the loan on their books.

    But if the debt was sold on to a third party and it cannot be bought back, or the business chooses not to buy it back, we might take a slightly different approach. That is because the consumer does not owe the business money - it owes money to the third party that bought the debt instead. When selling the debt the business made a commercial decision and accepted an agreeable price for the debt. In those circumstances, we would usually tell the business to calculate the compensation as normal at the point it sold on the debt - and to pay all parts of the compensation to the consumer. The business should also consider the possibility that the consumer might have incurred further losses since the debt was sold on as a result of PPI being included on their debt.
    In this case, as I have pointed out twice now, credit cards are not "irresponsible lending", as no money was lent. The OP might have spent more than they could afford, but that is irresponsible spending not lending
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