Help - Can a creditor transfer a personal loan to another company (non-delinquent)

Jm2022

Hi,

Please can anyone familiar with this advise, I have a loan worth £3000 with a company and I found out this morning (with no notice from them) that they have sold the rights to the loan agreement to another company.

My first question, is this legal? I'm sure it is, but maybe it needs to be specified in the loan agreement and is worth checking.

Second, do either company need to provide notice/ make another agreement with me?

I was shocked to find out about this in the way I did, last night a company I had never heard of set up a direct debit (which I cancelled immediately since I did not know them).

When I called the company this morning, they told me they now own my loan, and I should have received notice from the previous creditor. I had not and the only notice I could find was on their website.

In sum, I am looking to find out: 

• Is it possible to transfer a loan (fairly certain it will be as you can do this with delinquent loans) 
• if so, do any notices/procedures/ new agreements need to be processed 
• if so, what are they?
• Has company B acted unlawfully by setting up a direct debit in my name which I did not authorise 
• Lastly, if any law/ procedure has been breached what are my options. 

I am of course looking into this myself and will post any answers I find to benefit other users, but I would be very grateful if anyone with experience of this can help answer my questions.

Thanks,
JM

MorningcoffeeIV

Yes, all legal.

They should have sent you a notice of assignment - if you didn't receive one, ask them for a copy. Transfer of the DD is also fine.

No laws have been breached, so no need for concern.

sourcrates

Companies sell accounts all the time, the new owner inherits all rights and privileges of the previous owner.

All contained in the small print no one ever reads.

There are two types of assignment that a creditor can make – Legal and equitable.

Both of them fall under the Law of Property Act 1925 and both require the creditor to notify you of the change in writing.

The differences between legal and equitable assignments are set out below.

Legal

A legal assignment gives the purchasing party the power to enforce the debt. You will also then make payments to this company instead of the original creditor.

Equitable

When a debt goes through an equitable assignment, it is only the amount owed that is transferred. In these instances, the purchasing company cannot enforce the debt and the original creditor will still retain their original rights and responsibilities.

Jm2022

Thank you v much for your replies, appreciate it.