Debts sold on for less than settlement offer

[PAWS]

Re: Debts sold on for less than settlement offer

I have just read the following in This is Money PUBLISHED:22:02, 29 March 2014 - (ok I am a bit late but hey, I am doing my best!)
Business is booming for debt collectors snapping up overstretched borrowers for as little 10p in the pound Government bodies are also likely tosell more debt in years to come. Last November the Government sold a swathe of student loans with a face value of £900 million for £160 million to Erudio, a company backed by stock market-listed debt collector Arrow Global

And felt I had to send the following email to David Cameron and Nick Clegg. (Signing with my real name of course!)

You sold government debts to a company that repeatedly breaks lending regulations, ignores OFT guidelines and feeds on misery. Shame on you.
Bad debtors are not bad people. Not all have racked up debts by buying Gucci Handbags and mobile phones. Some have had to use their credit cards or get loans for emergencies such as boiler repairs or children’s clothing. Even when they avoid the so called loan sharks and go to high street lenders they are treated like criminals the moment they cannot meet repayments. The loan is sold on to companies such as Arrow who are as bad, if not worse than some of the sharks. They often take action that actually prevents the debtor from improving their situation. There are many cases and literally stacks of information available to prove that debtors are being treated unfairly by what you considerto be the more reputable organisations and I can certainly back up everything I write here with hard evidence and specific cases. You are endorsing a company that is literally pushing people over the edge. How are we to get companies like Arrow global to act in a legal and moral way when you are giving them such a vote of support? Just remember that every one of those debtors who you are ‘blanket judging’ and casting down into a pit of horror and despair is a voter.

[wales01man]

Re: Debts sold on for less than settlement offer

Do you REALLY think they give a TOSS?

[PAWS]

Re: Debts sold on for less than settlement offer

Ha, Ha Fair comment wales01 man. Probably not but then again….between this and ‘the other site’ more than 2000 people have read my original post andI would assume most of them are on the electoral roll. Considering their recent performance they just might remember that tens of thousands of people are actually affected by debt and a startling number are living in fear of these debt collectors. Their action (or lack of) will certainly determine my reaction to my MP (conservative) when he swaggers up to my door looking for a vote next June. I certainly will state my case to him, with some vigour!

[Scarlett55]

Re: Debts sold on for less than settlement offer

Hello Paws and everyone

Don't mean to steal your thread but I have a question on this please. I am a newbie by the way.

If a debt is sold on, why would a debtor owe a company money who they have not contracted with in the first place? And why would they have to pay back the full price when the debt collecting company has only paid 10p in the pound for the debt anyway? Sounds ludicrous!

[wales01man]

Re: Debts sold on for less than settlement offer

Because they are Legally allowed.
sad state of affairs but who will change the system that allows it?

[Guest]

Re: Debts sold on for less than settlement offer

Hello Paws and everyone

Don't mean to steal your thread but I have a question on this please. I am a newbie by the way.

If a debt is sold on, why would a debtor owe a company money who they have not contracted with in the first place? And why would they have to pay back the full price when the debt collecting company has only paid 10p in the pound for the debt anyway? Sounds ludicrous!

Why does your corner shop sell you a bag of spuds for 50p when they only paid 30p for them ?

The debt ceases to be an agreement when it is terminated and becomes a commodity, and as such the normal rules of commerce apply. Whilst it is true that the court can still enforce the full contractual value of the bargain, the additional costs and risks incurred in the collection process will decrease its commercial profitability, this is reflected in the purchase price.

The issue really is if DCAs should be allowed to trade in others misery, although it has been going on for thousands of years debt collectors mentioned in the bible of course, bailiffs etc.

[PAWS]

Re: Debts sold on for less than settlement offer

Many thanks for all the excellent comments.
Burning witches and slavery were once legal too but were eventually seen as unfair and ludicrous! When you consider the number of people affected by this profiteering and the high number who read these posts I would be very surprised if some politician does not eventually take an interest especially as I am persistently badgering them!!!!! :typing:
Gosh Scarlet, you need not apologise for commenting, you are not stealing anything and I hope that is the worst thing that happens to either of us today!
Andy, good point about the spuds and if I were in business I would buy cheap and sell as high as I could –That’s just plain common business sense. However, as you point out this is different and is mainly a question of morality.
If I were selling the spuds there are a number of things I could not do.
Firstly my customers would have a choice about who they deal with. They would not buy from a high street shop with a supposedly good reputation and then find out that I have sold the contract to supply the spuds to a shower of chancers who use human manure and whip 7 year olds up and down a field all day harvesting them. If I did then there would be the sort of scandal and outcry we have seen regarding the manufacture of goods in third world countries that were sold by high street stores such as Marks and Spencer.
Secondly, the price they paid for the spuds would be clear at the time of purchase and they would not get sudden surprise bills a few years later.
Thirdly if my shop suddenly loses money I can’t go sobbing to the taxpayer for a bailout especially if I made a bad decision and bought a lot of rotten potatoes or sold them on credit to people who can’t pay.
Lastly; financials sort of fall into the same area as medical. They affect our standard of living reputation etc. and are therefore(or B***dy should be!) intensively regulated and there should be a ceiling on how much profit they can make on a deal. IMHO anyway!

[Guest]

Re: Debts sold on for less than settlement offer

Morality and business, no different subjects completely, perhaps in an ideal world.

Collecting debts is still legal sadly unlike the other activity mentioned.

Cant agree about transparency regarding markup on sales either unfortunately, my local Tesco don't say how much they pay for their produce on the label, some would say, why should they.

DCA's are a business, they buy a product(the debt) and then sell it at a profit, the same as any other. The quality of the product (and the price they pay)depends on the amount of risk involved in getting a profit, really that is all there is to it.

I dislike DCA's as much as the next man(probably more) but you have to understand them and the way they think, if you go to a DCA seminar you see business men in suits talking about debt portfolios worth 100s of thousands of pounds, the debtor like you or me, that is suffering because of their activities is not even on their radar, if you were to bring up the subject of moral responsibility(and I have) you would be greeted with a blank stare of none comprehension.

[wales01man]

Re: Debts sold on for less than settlement offer

In an ideal world there would be no bad debts we could all pay back what we owe. Then we would have no DCAs or Bailiffs but until pigs can fly and Pink elephants rule the world not corrupt politicians we are stuck in this one?
on a serious note I expect most of us on LB detest DCAs and their actions but until one of us becomes the Dictator running the Country nothing will change

[PAWS]

Re: Debts sold on for less than settlement offer

Don’t know if anyone here has seen this extraordinary piece ofwork.
http://about.brighton.ac.uk/sass/news/2013/130123-debt.php

[Amethyst]

Re: Debts sold on for less than settlement offer

'Responsible individuals and irresponsible institutions? Mental Health and the UK credit industry' (pdf 1.5Mb), published by the University of Brighton, is being launched today (23 January) by Baroness Meacher of Spitalfields at the House of Lords.

Will have a read later. thank you Paws.

[PAWS]

Re: Debts sold on for less than settlement offer

Can I just say that I do actually have both feet firmly inthe real world but I also believe in the words of the great Edmund Burke who said,‘The only thing necessary for the triumph of evil is for good men to donothing.’

[PAWS]

Re: Debts sold on for less than settlement offer

Thank you Amethyst. It dispels all those myths about people in debt running up credit card balances on frivolities and not being capable of adding two and two together.

[wales01man]

Re: Debts sold on for less than settlement offer

Stating the obvious somewhat we all probably have experienced this when first in debt and not knowledgeable enough about what may or may not happen to us.

[wales01man]

Re: Debts sold on for less than settlement offer

Can I just say that I do actually have both feet firmly inthe real world but I also believe in the words of the great Edmund Burke who said,‘The only thing necessary for the triumph of evil is for good men to donothing.’

I have no doubt you are in the real world but the good can do nothing all the time we are governed by the not so good.