PayPal Debt with Moorcroft

Orange_panda

Hello!

Earlier this year I accrued a negative PayPal balance after PayPal took non-existent funds from my bank account, which also resulted in an overdraft with the bank. I was gambling, and I did not realise I had spent significantly more money than I had. I acknowledge my mistake, and I have self-excluded from the casino, but at the same time I am appalled by the fact that PayPal is allowed to let customers gamble with money they do not have. I have sorted out the overdraft with my bank, but my PayPal balance is currently negative (it is between -1k and -1.5k). 

I received an email from Moorcroft, who state that they 'act on behalf of PAYPAL' and would like to speak to me 'on a personal business matter'.

I have read several similar topics, but some clarifications and reassurance would be greatly appreciated:

1. This is negative PayPal balance due to Direct Debit, not PayPal Credit. This type of debt does not appear on credit reports and does not affect credit scores. Is this correct?

2. PayPal have never taken court action nor have they ever sold debts of this type in the UK. Is this correct?

3. I was told (on another forum) that Moorcroft have not only never bought debts of this type, but they are also not licensed by the FCA to do so, so it would be literally impossible for them to buy the debt, even if they wanted to. I was able to verify that Wescot no longer purchase or own debts, but I am not certain about Moorcroft as they do not mention anything in that regard on their website. I did find an article stating that 'Moorcroft Debt Recovery buys debts from companies in the United Kingdom that have been unable to recover payment. They buy the debts for a few pence on the pound and then aim to collect a fraction of the full amount to make money.', but I was told that this was basically nonsense. 

I am confused. It is obvious that Moorcroft have not purchased the debt (yet), but are there any chances of them doing so in the future? If this has never happened before, then the chances are obviously fairly slim, but if they are not even licensed (or simply do not want) to purchase debts (as I was told), then the chances of them buying the debt would be virtually zero.

4. If Moorcroft (or another DCA) somehow purchased the debt, could they send me a letter before claim and try to take me to court? I should clarify that I have been abroad for over a year, so I am genuinely not going to be able to find out whether they have sent me a letter before claim. Would they be able to obtain a judgment in default against me, and if they did obtain one without me being in the country, what could happen? I do not have any material possessions in the UK, but I still hold a few bank accounts. Could they obtain a third party debt order to freeze or take money from my other bank accounts?

For context, my PayPal account was opened prior to Brexit, and I used to live in Scotland.

Thank you very much!

sourcrates

Orange_panda said:

Hello!

Earlier this year I accrued a negative PayPal balance after PayPal took non-existent funds from my bank account, which also resulted in an overdraft with the bank. I was gambling, and I did not realise I had spent significantly more money than I had. I acknowledge my mistake, and I have self-excluded from the casino, but at the same time I am appalled by the fact that PayPal is allowed to let customers gamble with money they do not have. I have sorted out the overdraft with my bank, but my PayPal balance is currently negative (it is between -1k and -1.5k). 

I received an email from Moorcroft, who state that they 'act on behalf of PAYPAL' and would like to speak to me 'on a personal business matter'.

I have read several similar topics, but some clarifications and reassurance would be greatly appreciated:

1. This is negative PayPal balance due to Direct Debit, not PayPal Credit. This type of debt does not appear on credit reports and does not affect credit scores. Is this correct?

2. PayPal have never taken court action nor have they ever sold debts of this type in the UK. Is this correct?

3. I was told (on another forum) that Moorcroft have not only never bought debts of this type, but they are also not licensed by the FCA to do so, so it would be literally impossible for them to buy the debt, even if they wanted to. I was able to verify that Wescot no longer purchase or own debts, but I am not certain about Moorcroft as they do not mention anything in that regard on their website. I did find an article stating that 'Moorcroft Debt Recovery buys debts from companies in the United Kingdom that have been unable to recover payment. They buy the debts for a few pence on the pound and then aim to collect a fraction of the full amount to make money.', but I was told that this was basically nonsense. 

I am confused. It is obvious that Moorcroft have not purchased the debt (yet), but are there any chances of them doing so in the future? If this has never happened before, then the chances are obviously fairly slim, but if they are not even licensed (or simply do not want) to purchase debts (as I was told), then the chances of them buying the debt would be virtually zero.

4. If Moorcroft (or another DCA) somehow purchased the debt, could they send me a letter before claim and try to take me to court? I should clarify that I have been abroad for over a year, so I am genuinely not going to be able to find out whether they have sent me a letter before claim. Would they be able to obtain a judgment in default against me, and if they did obtain one without me being in the country, what could happen? I do not have any material possessions in the UK, but I still hold a few bank accounts. Could they obtain a third party debt order to freeze or take money from my other bank accounts?

For context, my PayPal account was opened prior to Brexit, and I used to live in Scotland.

Thank you very much!

Hi,

Answers -

(1) Correct.
(2) Correct - as far as is known.
(3) Moorcroft are a debt collection, and debt purchasing company, they collect debts on behalf of clients, they also buy debts to collect themselves, and they do so exactly as you describe above, so whoever told you it was nonsense was wrong essentially.

They have restrictions on what they can purchase, it appears that they are licenced only to buy or collect, consumer credit debts -

"Exercising/having right to exercise lender's rights and duties under a regulated credit agreement (excluding high-cost short-term credit, bill of sale agreement, and home collected credit agreement)"

(4) Lets suppose the debt was sold, the buyer would run through there series of standard collection letters with you, if no response, then they may just go away and concentrate on other debtors, and that would be it, or, they may ramp up the threat level with a LBA, and if that were ignored also, then a CCJ by default is entirely possible yes.

If your not even resident in the country, then your seriously over estimating the lengths creditors go to, none of this is going to be an issue for you, you may get a judgement in default, if they can`t find you, but it will just sit on your file for 6 years and then drop off, basically if they don`t know where you are then they can`t enforce it, life will go on, and it will be forgotten about.

Thousands of default judgement are granted each year, hardly any get enforced, to do anything they must know were you live, and/or work, and only if both of those things are in the UK, if your abroad, nothing will happen at all.

Orange_panda

Thank you for the reply!

(3.) Does my type of 'debt' (PayPal negative balance) fall under the category of 'consumer credit debts'? I have not signed any 'regulated credit', 'bill of sale' or 'home collected credit' agreements. In other words, it is evident that Moorcroft do purchase debts, but could they (in theory; I know it has never happened yet) buy mine?

(4.) No, I am not currently a UK resident, but I might return in a few years. If a DCA did obtain a default judgment against me while I was abroad, could I dispute it upon my potential return to the country? In fact, would they be even able to find out that I was back?

Finally, this took place in Scotland, wouldn't the limitation period be 5 (rather than 6) years?

sourcrates

That far into the future why would you bother to dispute it ? 

After 6 years a judgement disappears from your file, and then requires the agreement of a judge to enforce, which isn`t normally agreed too.

Your way overthinking the importance of a CCJ, all it means is a court agrees you owe the money, its very rare for one to be further enforced for credit debts, and as I said before, if your abroad, non of this is going to affect you in any way, shape or form.

And yes, if it occurred in Scotland, the limitation period is 5 years, but defaults and CCJ still show for  6.

Orange_panda

Thank you!

I was just thinking that if I were to return to the UK in, say, 2025, and a DCA had somehow obtained a CCJ against me (in 2023) and found out my new address, I could dispute the judgment on the basis of the fact that I genuinely could not have seen the letter before action due to being abroad. This, in turn, could bring me back to the 'prove it' stage.

Regarding the limitation period, I think I understand now. Creditors have 5 (rather than 6) years to take court action, but once a judgment is obtained, it stays on the credit report for 6 years, like in England/Wales/Northern Ireland. Is this correct?

Karonher

I would imagine it is up to you to give them your latest address. Check on that but it is the case a lot of the time.

Orange_panda

Are you implying that a DCA would not be able to find out my address upon my potential return to the UK or that I should inform Moorcroft of my current address abroad? If it is the former, then that's great! If it is the latter, I do not intend to, as doing so might be viewed as acknowledging the debt.

MaryLongstaff

Orange_panda said:

Are you implying that a DCA would not be able to find out my address upon my potential return to the UK or that I should inform Moorcroft of my current address abroad? If it is the former, then that's great! If it is the latter, I do not intend to, as doing so might be viewed as acknowledging the debt.

It would be highly unlikely that they find your address however I think Karonher is saying that it is your responsibility to inform Moorcroft of your new address. You can be in touch with them without claiming responsibility for the debt. As mentioned above, a prove it letter is always a good way of doing this.

sourcrates

Don`t tell debt collectors squat, if they want to waste their time chasing you, that`s there problem.

Do what you have to do and if you ever come back to this country, deal with any fallout then, I very much doubt there will be any.