Credit card write off

[theGobbyOne]

Hi Guys

I may be in wrong forum if so am sure admin will move it to correct place.

Someone in my office claims that there is a company based in Guernsey who for a fee buy your debts of you and get them written off. They say any credit card youve ever had that the credit amount was automatically increased prior to 2007 can be written off as the credit card company have changed terms etc without your written permission. I advised this person that its too good to be true but they are convinced. The company is apparently owned and run by some relative of Sachs and Goldman!!! And they have testimonials from people who it has been successful for........I smell a dirty big rat....any advice guys??
Thing the company is called Hetheringtons

[gravytrain]

Re: Credit card write off

I would like to see their reasoning behind the claims. Some years ago there were several CMC's offering a similar service, and i seem to remember the MOJ released a directive that advised anyone approached by, "debt purchasing firms" to be advised that the creditor would still chase the contractual (original debtor) on a consumer credit agreement, no matter what arrangement had been made with a CMC.

I am of the understanding that debts under an agreement cannot be sold or transferred, also i believe creditors are allowed to vary interest rates if the agreement say they can.

[wales01man]

Re: Credit card write off

Is this todays joke?

[theGobbyOne]

Re: Credit card write off

Is this todays joke?

I kid you not!!!!

I know its a scam but this person in the office wont have any of it!!!

[PlanB]

Re: Credit card write off

Are you familiar with the case of the Rankines who were given a two year prison sentence for doing this with their business Credit Card Killer

http://www.bbc.co.uk/news/uk-england...shire-19635797

If something looks too good to be true it probably is too good to be true :nod:

[theGobbyOne]

Re: Credit card write off

here ya go guys.....................

Background on Highbridge

The idea of the Highbridge service came out of a review of the claims management market. It was clear to the founders, Ortho Barnes and Oliver Mishcon, that debt managers and After-the-Event lawyers weren’t serving their clients well. The former charged an up-front fee, then a monthly fee (typically for 12 to 24 months) which usually totalled around 15%-20% of the outstanding debt. However, the debt manager impairs the client’s credit record while that was happening, but they almost never succeed in clearing the debt, usually managing to reduce it to 30% of its original value. Almost all debt managers have little working capital, as demonstrated by the significant number who have ceased to trade.
ATE firms have also suffered from poor cashflow. Cases are taking longer to go through the courts, funding for working capital is much harder to find and ATE insurance premiums have risen. Other problems include expected rule changes on the use of introducers to bring in business and a general crackdown on “ambulance chasing” firms (recently investigated by a Commons committee). A number of significant ATE firms have gone down recently and more will follow.
Highbridge wanted to find a permanent solution to the problems of those who had been unfairly treated by the financial services industry, as neither of the current options serve customers well. Oliver Mishcon is a barrister specialising in public and regulatory law while Ortho Barnes is a law graduate who has been chief executive of financial services companies.

The Highbridge Option

This is simple in concept. The client pays 20% of their outstanding balance to Highbridge and Highbridge takes legal ownership of their debt. Highbridge is responsible for any payments that have to be made and any legal fees incurred. As long as the client does the few basic things asked of them Highbridge will indemnify them.
There are 2 key legal stages to the process. First, the transfer of the loan agreement. This happens when the client sends their letter of complaint, which has been drafted for them by Highbridge. The transfer notice is included in the complaint letter, along with 2 different requests for documentation (one of which is a statutory requirement). Processing 4 different requests beats the bank’s system and they trip up on all 4 requirements, helping the Highbridge case.
The second legal issue is the argument used by Highbridge as the basis of the complaint. This relies on the concept of Unfair Relationships, a largely untested new area of the law. This places the burden of proof on the defendant, requiring them to demonstrate that their relationship with their client was not unfair. This is incredibly difficult to achieve. They will have to demonstrate that they have complied with all legal, regulatory and advisory guidelines over a period of time. This will be very expensive to prepare (almost certainly more than the debt in question) and very risky for the bank. As an untested area of the law, the outcome would be impossible to predict, and a loss by a bank could generate very significant volumes of new claims. Bank risk managers have preferred to pay out on the claims before they reach court, but require the customer to sign a NDA (Non Disclosure Agreement) so that details of the settlement don’t leak out.
Highbridge have researched this area thoroughly, and run many test cases, so are certain of their position in relation to the debt taken on. Oliver Mishcon often acts for regulators (he is prosecuting a major fraud case brought by the FSA in late 2011) and has been privy to the work of many firms of solicitors in this area.

The Commercial Angle

While the clever use of the law underpins the Highbridge offering, it also has a number of commercial elements that are just as useful. These are:
• By combining 4 issues in the complaint letter we beat the bank’s systems. They get 3 of them wrong. They have 4 different periods (from 21 to 40 days) to respond by law and tend to go for the longest period, thereby breaching regulations/the law on 3 of them. Banks will not change their systems just because a very tiny proportion of claims arrive in this form (well under 0.1%).
• Banks prefer to pursue ordinary consumers. They rely on intimidation and having “deeper pockets” than the customer. It is very unlikely that they would want to pick a fight with Highbridge, whose Board has barristers and lawyers on it, and who have significant funds to fight claims.
• The parent company of Highbridge is in Guernsey. Guernsey law is very complex, being a combination of English, French and Celtic feudal law. A bank would have to bring its claim in Guernsey, and no sensible barrister would dream of recommending a bank do this.
• While the bank is deciding what to do about Highbridge, its accounting systems are writing the debt down to below 50% of the original balance. Banks are required to make a provision for impaired debt (that is, write down the expected recovery they can achieve) and by the time they decide to litigate against Highbridge their loss will be down to about 30% of its original amount. Taking a huge risk for such a small figure doesn’t make sense.

Highbridge Regulation

Highbridge falls under the Consumer Protection, England and Wales, Compensation (Exemptions) Order 2007. This exempts Highbridge from being regulated by the FSA or the MoJ (Ministry of Justice). Instead the Directors are regulated by their respective professional bodies. In the case of Highbridge this is the Bar Council (barristers), the Solicitors Regulation Authority (solicitors) and the Institute of Legal Executives (legal executives). Also, Highbridge has to comply with the requirements of the Guernsey Financial Services Commission, the OFT and the Data Commissioner (our registered number in Guernsey is 22150).




The Customer Experience

Once the customer has signed up and paid their fee, this is what they can expect to happen.
First they will be called by a Highbridge Advisor who will ask them around 20 questions. These are very straightforward (such as “are you currently employed”, “was the card agreement explained to you” and “has the card company appointed a debt collector”. The answers will populate the complaint letter that we then send to them to sign, and will form the basis of our legal argument if the lender challenges our claim.
After the fact-find a Welcome Pack will be sent to them. This will contain:
• A welcome letter with instructions on what to do next
• A complaint letter that the client must send to their card company
• A further letter to be sent to the lender which will re-direct all correspondence and calls to Highbridge
• A guidance note telling them what to do if they continue to be contacted by their lender, plus an email-based help line.
• Stamped addressed envelopes so that, if the client continues to receive correspondence from their card company, they can send it directly to Highbridge.
After 10 days the sales agent will call to check they have sent the letters off. This is a very important requirement and Highbridge may cancel the contract if the client does not comply. Then, after 25-28 days (the transfer taking 21 days, with an allowance for postal delays) the agent calls to confirm that the contract has been transferred. The sales agent can use this opportunity to look for referrals to family and friends.
It will take at least 6 months to finalise each case. A small proportion might result in Highbridge paying a very small amount to the lender each month. However none of this should affect the client.
Highbridge will clear up the credit record of the client once the case is finalised. We may need the client’s co-operation to do this. However the client will have cleared a large amount of debt and the removal of that debt will improve their credit record in the future.

Highbridge Resources

The structure of Highbridge was designed and set up by Grant Thornton, who reviewed the tax and business aspects of the project. Counsel opinion was taken on various aspects of the structure, including the ability of the company to charge fees without VAT.
Highbridge has £250,000 of capital from day one and this will increase in proportion to the amount of business taken on. The management of the UK activities is outsourced to Compass, a Lloyd’s Underwriting Agent in the City of London. They are running a reinsurance-type fund in the Guernsey parent company to create appropriate reserves against claims from banks. It is forecast that this fund will have reached £1m by April 2012.

[PlanB]

Re: Credit card write off

Someone in my office claims that there is a company based in Guernsey who for a fee buy your debts of you and get them written off.

Maybe being based in Guernsey is a bit of a clue since that would place them outside of the UK legal jurisdiction :suspicious:

[theGobbyOne]

Re: Credit card write off

Maybe being based in Guernsey is a bit of a clue since that would place them outside of the UK legal jurisdiction :suspicious:

They also claim to have an office in London!!!!

[gravytrain]

Re: Credit card write off

"This is simple in concept. The client pays 20% of their outstanding balance to Highbridge and Highbridge takes legal ownership of their debt"

Simple concept but unfortunately cannot happen under common law, the rest of the stuff is nonsense and even if taken seriously by the court would not warrant transfer of duties under the agreement.

[gravytrain]

Re: Credit card write off

"In fact the law does not allow the sale of debt without the lender's permission and so businesses that suggest otherwise are making clearly misleading claims. Brokers who introduce clients to debt and claims management companies that say that they can 'buy' and 'sell on' consumer debts are also misleading consumers."

http://www.oft.gov.uk/news-and-updates/press/2009/72-09

[FlamingParrot]

Re: Credit card write off

I first found out that debts could be unenforceable when I watched the Rankines on Panorama. You wouldn't think a program like that would feature people running a scam, so I went to their infamous killer site and was about to do a deal with them late in 2009. That's how I found out about consumer forums, by making enquiries about their site which appeared to be offering a legitimate service.

I was, in fact, very close to 'selling them my benefit' when I sent a CCA request to MBNA to get the agreement checked by them. I was saved by the bell when MBNA wrote back saying they couldn't find it!

Although it's not possible for a debtor to sell or assign their debt and it's no longer possible to take creditors to court to have your agreement ruled unenforceable, there is still the possibility that an agreement entered into before April 2007 could be unenforceable if the creditor cannot provide a true copy of a properly executed agreement. In some cases, they can't produce any agreement at all, as was the case with MBNA. In others they may just send an application form or a bad recon.

Unenforceable doesn't mean the debt is written off but it means the creditor cannot obtain a CCJ. A good example of an unenforceable debt was the storecard turned credit card in the case of Santander vs Mayhew reported here ---> http://www.bbc.co.uk/news/business-17670803 :clap2::dance:

[gravytrain]

Re: Credit card write off

This is true however even if unenforceable the debt still rests with the original debtor of course, unenforceabilty is a feature of the consumer credit act, the inability to transfer the duties is a feature of common law and still applies, enforceable or not.

[hra47]

Re: Credit card write off

Has there ever been an update on this - I went with Highbridge and they v kindly returned my debts to me (but not the fees I paid) in 2015?