legalities of selling a live account/DCA/court

[miliitant]

right then people, i have opened up this debate to see if we can nail this question once and for all. so first question

1/ UNDER WHAT STATUTORY AUTHORITY CAN THE ORIGINAL CREDITOR ASSIGN A LIVE ACCOUNT TO A DCA (NOT DEFAULTED AND TERMINATED PROR TO SALE) lets say by absolute assignment to avoid confusion

[mystery1]

Re: legalities of selling a live account/DCA/court

I think you are looking through the wrong end of the telescope. What stops them ?

M1

[miliitant]

Re: legalities of selling a live account/DCA/court

thats exactly my point looking at the cca
the only draw back would be the condition of the dca credit licence and does it have the facility to offer a credit facility and not just a debt collection licence

do you concur

[mystery1]

Re: legalities of selling a live account/DCA/court

Yes, but if a creditor has already restricted further credit or none is available for the duration of the agreement then the license needed would be a different category.

http://www.legislation.gov.uk/ukpga/1974/39/section/82A

82AAssignment of rights

(1)

Where rights of a creditor under a regulated consumer credit agreement are assigned to a third party, the assignee must arrange for notice of the assignment to be given to the debtor—

(a)

as soon as reasonably possible, or

(b)

if, after the assignment, the arrangements for servicing the credit under the agreement do not change as far as the debtor is concerned, on or before the first occasion that they do.

(2)

This section does not apply to an agreement secured on land


Whilst this does not give clear authority to assign or any restrictions on assignment it shows that it is allowed.

M1

[miliitant]

Re: legalities of selling a live account/DCA/court

lets throw this into the equation then on say a payday loan regulated under the cca

these loans terminate after 30 days so how can the account be transfered live to a dca, then the dca issue its own default notice on an account that has allready ended

the liabilities of the outstanding loan has not ended, but the agreement has, so how can it still be treated as a live account and defaulted further down the line by a dca

[mystery1]

Re: legalities of selling a live account/DCA/court

How can it ever be defaulted by your logic ? Surely it is live until paid ?

Scheduled to end is different to actually ending isn't it ?

I guess you'd need to look at the contract.

M1

[miliitant]

Re: legalities of selling a live account/DCA/court

but if the contract/agreement stipulates the term is only 30 days, would their even be need of a default notice
(its a contract after three months that a DN is applicable i believe)

its just that the contract stipulates all sums due, thats capital and interest after 30 days, would the contract then not terminate but the liabilities remain still

[mystery1]

Re: legalities of selling a live account/DCA/court

Depends on the contract although it'd be a strange contract that didn't have terms for non/late payment since it happens in all forms of contract all over the world everyday.

M1

[miliitant]

Re: legalities of selling a live account/DCA/court

ok. we will debate that later

on a live account that has been assigned to a dca, when the dca issue a default notice, it has to abide by the default and termination regulations.

in this sinario the dca can only demand the arrears in the default notice and not sums that are not yet due before terminating as you cannot terminate on a duff default notice

[mystery1]

Re: legalities of selling a live account/DCA/court

Correct x 2.

M1

[miliitant]

Re: legalities of selling a live account/DCA/court

many thanks

ill check back later on my ipad as i have a train to catch

regards

[teaboy2]

Re: legalities of selling a live account/DCA/court

Problem is the CCA doesn't diffferentiate between fixed term or running credit agreements when it comes to defaulting and assignment. If the debtor fails to keep up repayments then the creditor must issue a DN, nothing says in the CCA 1974 that they do not need to if the term of the loan has already past. Thats probably why we are seeing Payday lenders isssuing DN all the time. But the question here is if the agreement was fixed term 30 days and it was sold without default Notice, is the debt collector entitled to issue a DN? In my opinion no! As creditor is not entitled to terminate in default cases without first issuing a default notice, selling the account when the debtor is in default is a clear sign of the creditor terminating the agreement with the view of a 3rd party enforcing the debt and a clear indication that the creditor has ignored his/her duties under section 81. A contract does not terminate, until all conditions under it have been met by both parties or one party terminates it or both mutually agree the terminations or rescind the contract.

Section 82A on its own, in my opinion, only applies to non default cases where one creditor assigns the account to another creditor that will carry on all duties of original creditor under the agreement, or after a DN has been issued and the creditor wishes to terminate and enforce by selling the debt to a 3rd party who will enforce it. Selling to a DCA in a default case when no DN has been issued would be nothing but a clear sign the creditor is in breach of his legal obligations to issue a DN prior to termination and selling/enforcement of the account/debt - It would also be unlawful and the assignment invalid, putting the creditor in repudiation of contract so athe DCA would not be entitled to claim anything and only the creditor would be entitled to the arrears only. Just like if DCA's themselves issued the DN they would only be entitled to the arrears.

[miliitant]

Re: legalities of selling a live account/DCA/court

that is why i am confused

teaboy2 has hit the nail on the head and has exactly the same reasoning as me

we realy do need this issue confirmed as to statutory obligation

we cannot keep giving advice that has not been confirmed to posters

in the end, someone will get burnt in court with costs otherwise

[mystery1]

Re: legalities of selling a live account/DCA/court

Problem is the CCA doesn't diffferentiate between fixed term or running credit agreements when it comes to defaulting and assignment.

Doesn't really say much about assignment at all.

If the debtor fails to keep up repayments then the creditor must issue a DN, nothing says in the CCA 1974 that they do not need to if the term of the loan has already past.

Default notices

87Need for default notice.

(1)

Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice ”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

(a)

to terminate the agreement, or

(b)

to demand earlier payment of any sum, or

(c)

to recover possession of any goods or land, or

(d)

to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or

(e)

to enforce any security.

(2)

Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(3)

The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

(4)

Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

[F1(5)

Subsection (1)(d) does not apply in a case referred to in section 98A(4) (termination or suspension of debtor's right to draw on credit under open-end agreement).]

If an agreement has passed it's end date then all sums are already due so what would be the point of a default notice ?

But the question here is if the agreement was fixed term 30 days and it was sold without default Notice, is the debt collector entitled to issue a DN? In my opinion no! As creditor is not entitled to terminate in default cases without first issuing a default notice, selling the account when the debtor is in default is a clear sign of the creditor terminating the agreement with the view of a 3rd party enforcing the debt and a clear indication that the creditor has ignored his/her duties under section 81. A contract does not terminate, until all conditions under it have been met by both parties or one party terminates it or both mutually agree the terminations or rescind the contract.

They don't need a default agreement as they are not demanding earlier sums imo.

Section 82A on its own, in my opinion, only applies to non default cases where one creditor assigns the account to another creditor that will carry on all duties of original creditor under the agreement, or after a DN has been issued and the creditor wishes to terminate and enforce by selling the debt to a 3rd party who will enforce it. Selling to a DCA in a default case when no DN has been issued would be nothing but a clear sign the creditor is in breach of his legal obligations to issue a DN prior to termination and selling/enforcement of the account/debt - It would also be unlawful and the assignment invalid, putting the creditor in repudiation of contract so athe DCA would not be entitled to claim anything and only the creditor would be entitled to the arrears only. Just like if DCA's themselves issued the DN they would only be entitled to the arrears.

http://www.bailii.org/ew/cases/EWHC/QB/2012/2402.html

M1