Debt Collection

Some of you may remember a few years ago I was a bit of admin nightmare, I would like to think that has improved. Over the previous few years as I have grafted to become debt free.

I still have a few outstanding bits and bobs including a credit card and a mobile phone contract. I spoke to a credit card provider and asked for a copy of the initial credit agreement. They could not provide it so they offered to write it off. The truth of the matter is I am honest so I have agreed to pay to the credit limit of the card (about half of the debt)

The mobile phone debt however when I asked for a copy of the initial agreement told me they did not have to provide it. I have done a bit of research online and I can not for the life of me figure out if what they are telling me is genuine.

Do I have a right to the initial credit agreement? What is my position if I dispute it on the grounds of I have no idea what they are charging me for?

Currently £1900 from being debt free.
 
Make an appointment with Citizens Advice. I had a problem and the guy I saw was great. They often have good contacts and creditors seem more willing to listen to them than you.


Posted quickly, while the cat's not sat on the keyboard.
 
CAB are variable - ok if you get a Money Advisor, not so good if it's a 'general' volunteer. It usually takes an age to get an appointment.

In any case, there is no obligation to provide a copy of a mobile phone contract, because it is not a credit agreement within the meaning of the Consumer Credit Act.

Mobile phone debts tend to get sold on quite quickly - are you dealing with the original phone company or a debt purchaser/collector?
 
Debt purchaser, Lowell financial they have sent letters despite me placing queries about what I am paying for under the name of Hamptons Legal and Red both of which are under the umbrella of Lowell.

Surely if they can't provide proof of the initial mobile phone agreement they are knackered if they attempt to take it to court?
 
Lowell are well known. As you say Hampton Legal and Red are also Lowell, who send threats on different letterheads, Wonga-stylee, to mislead and deceive.

I admire your moral stance in wanting to pay what you owe, but if Lowell have it, they'll have paid pennies in the pound for it. The original creditor has sold it to them, and claimed tax relief on the whole amount. To my mind, this dilutes the moral issue considerably.

Lowell do take people to court, but it's a percentage game for them. They rely on people being scared, unaware of their rights, and unfamiliar with the Court process. They issue their claims through the Northampton Bulk Centre, which means that they don't need to provide any docs with the claim.

Ideally, though, you want to see them off before it gets to the court stage. There's plenty you can do.

First, basic stuff. Don't talk to Lowell or any debt collector on the phone; refuse to go through security and tell them you'll only deal in writing.

Second, how old is the debt, and when was the last time you made a payment? Have you acknowledged the debt in writing? If it's 6 years or more (5 if you live in Scotland), and haven't acknowledged it in writing, it's an easy win for you, and we can see Lowell off with one letter.

If not, then you need to formally dispute the debt - which means that they have to stop all collection activity - and demand that they provide you with a breakdown of how the debt is made up. This will enable you to challenge any unfair charges. I can provide you with a letter template for this.

If it turns out that it's a legitimate debt, and depending on its age, you could make a 'full and final' payment offer that, depending on a couple of factors, Lowell are likely to accept.
 
Thats brilliant, I have asked for a breakdown of the debt and all I was sent was a photocopied sheet that said Vodaphone, no facts or figures on it.

I have not acknowledged it in writing but I may have done over the telephone (Recorded I assume) though if I am completely honest I don't recall doing so.

The Letter template would be fantastic.
 
Acknowledging on the phone doesn't count as far as statute-barring is concerned, though Lowell's phone-monkeys would say different. They often don't have recordings; they don't want to keep evidence of their naughty ways, do they?

So, the letter. I've assumed (yes, I know...) that you don't dispute that you had an account with Vodafone, but that you don't recognise the amount they are claiming.

Dear Sirs

Reference (their ref)

I refer to your demands for payment of the above account. No debt to you or any company you claim to represent is acknowledged. Take notice that all correspondence in this matter must be in writing.

You will recall that on (date) I asked you to provide me with details of the account as I did not recognise it. Unfortunately, the single photocopied sheet you sent me was unhelpful, as it did not provide evidence of a contract, nor a proper breakdown of the sum claimed. Consequently, take notice that I dispute the debt.

I am aware that the Financial Conduct Authority, requires that where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner - CONC 7.14.2/3 refers.

By way of resolution, I require you to provide me with an itemised breakdown of the amount you claim is owed. in accordance with CONC 7.14.5, as the owner of the account, you are required to investigate the dispute and provide me the outcome in a timely manner. I expect your response with 14 days.

Until I have your response to this dispute, I expect you to comply with the obligation imposed upon you by CONC 7.14.1 and suspend all collection activity.

Yours etc.

If you are tight, get a free proof of posting; otherwise, send it recorded delivery. Many debt collectors have form for claiming mail has not been received, and if they do try a court claim it's as well to have a paper trail.

Let's see what they come up with.
 
That's fantastic I'll get that sent in morning and keep you posted

What should I expect as a response? I have checked my credit file so I know it's on there.
 
You will probably get some drivel about them needing to contact Vodafone. Their letters tend to be templates, so don't expect to get something that makes any real sense. If they come back with a discount offer, that's a combat indicator that they have a problem.
 
Im not far from being debt free to be honest lots of progress in a small amount of time if I keep going it won't be long before my credit rating starts to improve.
 

The_Snail

ADC
RIP
I've posted this before but hey ho.

Supanet tried this crap with me a few years ago. They were trying to say I'd been using their "services". Countless letters, countless phone calls. I got bored and asked them when the last time I used their "services" was. They were polite enough to tell me that it was in the previous week on the landline (the dial-up computer hasn't been used in years).

How's that then? Says I. I'm with BT.

According to our records Mrs Snail, you are registered with us and there is an outstanding debt of (however much) and we'll be sending some bailiffs around to collect what's due to us.

Crack on fella.. You can take the computer. If you can get past the dogs.
 
Well done ViroBono... really good advice. I wish someone as good as you had given me advice with a Telecom problem years ago.
 
If you are dealing with a debt recovery company and wish to cough up as was pointed out they paid peanuts for the debt and will offer discounts for prompt payment depending on the age of the debt.

Simple rule of thumb is 10% off for every year as once it hits the staute barred limit you can tell them to poke it.

If you are willing to pay over the phone by card wait until the end of the month and be cheeky to see how much you can get off. If you get someone who is chasing a bonus you might get a nice discount.
Obviously this is all relevant if you are intending to pay, if not follow VBs advice and be arkward they only really want the easy marks who pay up straight away.
 
If you are dealing with a debt recovery company and wish to cough up as was pointed out they paid peanuts for the debt and will offer discounts for prompt payment depending on the age of the debt.

Simple rule of thumb is 10% off for every year as once it hits the staute barred limit you can tell them to poke it.

If you are willing to pay over the phone by card wait until the end of the month and be cheeky to see how much you can get off. If you get someone who is chasing a bonus you might get a nice discount.
Obviously this is all relevant if you are intending to pay, if not follow VBs advice and be arkward they only really want the easy marks who pay up straight away.

When debt collectors offer discounts, it's almost always a combat indicator that they have a problem with the debt. Sometimes it's simply that they have failed to get the debtor to repay the full amount, and something's better than nothing, especially for commission-based drones. More often, they do not have any paperwork, or know that the original creditor's documentation is likely to be flawed (especially if the agreement is pre-2005), so they know they'd struggle in court.

However, you have to be very careful with discount offers. Never take anything a debt collector says at face value. If you think banks are devious and untrustworthy, the debt industry makes them look like amateurs.

Debt collectors want debtors to contact them. They prefer phone contact for several reasons; it's quick, and they can use scripts designed to put pressure on the debtor to pay. Many (most) will also try to mislead or decieve on the telephone. That is why all contact should be in writing.

Every debt collector's discount offer I've ever seen (and I've seen lots) requires the debtor to contact the debt collector by phone 'to take advantage of this offer'. Once on the phone, the debt collector can find a spurious reason why the discount isn't available. They ask why, if the debtor can suddenly pay a large percentage of the debt, they can't pay all of it. It's not unknown for debt collectors to accept a discounted amount, then sell the remainder on. Debt collectors know that almost all debtors are 'can't pays' rather than 'won't pays', so if an individual can't pay a debt in full, it's unlikely that they can pay a substantial part of it. Discount offers are just a method of getting debtors to make phone contact, and should be avoided.

Big discounts - and I've seen 90-95% offered - usually mean that the debt is statute-barred, or close to it.

Another important point on discounts is that paying less than the full amount will not have a positive affect on your credit record. It will be shown as 'settled' rather than paid, which is seen in exactly the same way as a default by lenders. If your credit file is already trashed, you could be throwing money away.

What can be done is to offer a full and final settlement. This means that you offer to pay a percentage of the debt in return for the account being marked as paid. If a debt is the only one on your credit file this is worth considering. It's sort of a discount offer in reverse, but with the debtor in the driving seat. I usually advise starting the offer at 10%, but making clear that the money is coming from a relative and is limited, and that the credit file must be marked as paid, and an undertaking given not to pursue further or sell the debt on.
 
There was a con man bloke here who made a small mint in selling bogus debts on to (Inkasso bueros) debt collection agencies at the usual knock down price of course. They were so busy with their greed and in leaning on the supposed debtors they never thought to check the facts! He is still at large.
 
None of the major debt purchasers in this country (though almost all are ultimately offshore owned, so the money is going outside UK) carry out any sort of due diligence when buying debts, and the lenders often sell them rubbish.

Even in multi-million pound deals, all the purchaser gets is a disk of names, last known addresses and amounts outstanding. No documentation, no details of any outstanding disputes. Many lenders shredded paperwork (despite the anti-money laundering laws), or micro-fiched it, often making it illegible and unenforceable.

There's a UK company that regularly asks debt collectors to pursue made-up debts; when the debt collectors are caught out, their stock reply is that they took the information in good faith.
 

DieHard

LE
Book Reviewer
I find that first credit used to be a pain and were chasing me for a bill I had actually paid, it took ages to get rid of them
 
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I've replied to your pm, DieHard. 1st Cretins are old adversaries who had a good kicking from the OFT a couple of years ago for non-compliance. They have changed, but not much.
 

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