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I have been negotiating a full and final settlement of an outstanding debt and wrote to the DCA demanding that they would cease chasing and mark my CRA reort as settled and the amount set at zero etc. They wrote to me accepting the sum offered and, in turn, offered a " short settlement ". I wrote to them indicating that I didn't understand the term " short settlement " and expressing concern that they, or others, would take the money and continue chasing the balance. They have now written back saying " the term short settlement refers to the offer which is not a payment in full. Your credit file is updated as " Satisfied " which is an indication that the debt was settled but not in full. Does this sound correct and can I trust them that the account will be closed and I can expect no further actions by them or others?? All advice gratefully received. kind regards
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Tags: adverse data, barrister, benefit, capital, coming, contract, credit, creditors, dca, debt, debt collectors, entitled, find, ico, interest, itself, law, lines, mis, money, notice of assignment, ongoing, ownership, power, reclaiming, responsibility, rockwell, settlement, suspect, water -
Re: Full & Final
You need promises on a few things in writing before you should even consider settling the account.
1) That the settlement is accepted as a final settlement, and that your liability to pay any remainder is ended. Merits of the phrases "short" and "full and final" settlement have been much discussed, but when it comes down to it a clear statement of your future liability (or lack thereof) is what you really need.
2) How you credit file will be marked.
To be marked as just "settled" would be the best outcome obviously, but most creditors won't go that far. The Information Commissioner accepts that where a creditor settles for less than the full amount that:
"In these circumstances, we understand a lender may be reluctant to mark the entry as ‘satisfied’ or ‘settled’. However the entry must record the position adequately, for example, by showing that no further monies are expected and the account was partially paid."
In other words, marking that account as a partial settlement would be OK.
Obviously, if you can negotiate away the partial part, it would be a great result. -
Re: Full & Final
This is the gist of my letter to them:
“ £600.00 is offered in full and final settlement of the account. Further you accept that this offer is made on the clear understanding that neither you nor any associate company or Marks & Spencers, being the original creditor, will take any other action to enforce or pursue this debt in any way whatsoever and that I will be released from any further liability.
I also requested that, if accepted, you will make an entry on any or all credit reference agency files relating to the above account as "satisfied" in full and the balance reduced to zero.
My relative will only release the monies on condition that your agreement with the requested requirements are given in writing.
If you can comply with this request then the cheque will be released within the fourteen days requested.
Yours Sincerely
Comments please.........regardsComment
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Re: Full & Final
Its good to cover your back like that.
From experience as a DCA, sometimes when i agree a full and final, even though i have to manually notify my superiors so they can action it, i still get a new work load to collect the balance. This is usually a simple clerical error. Its happened to me three times in 18 months working with 8 companies, and each time i remember the 'debtor' has settled and dont even knock on the door again before getting it sorted. I always advise people who pay me in person to keep my contact details as if this were to happen to them i can and will get it fixed. I sign reciepts as settled.
I do however know some people use this to extract large sums of money, knowing full well they wont action the settlement and go back to collect the rest later, so you are doing right to get that in writting!
PS, why not try offering even less in the next letter... you never know...
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Re: Full & Final
Been pressing them for the right wording before continuing with this settlement and have now received the following -
" We can confirm that provided your remittance of £600 is received in ths office by no later than 20th August 2010 it will be accepted in Short Settlement to discharge your liability in respect of the above account.
In a Short Settlement a discounted amount as paid to clear an outstanding balance. When your credit file is updated by our clients it will show a satisfied but the remaining balance may still show on your file, however, you will not be pursued for the same.
This is not the same as a Full and Final Settlement. In a Full and Final Settlement a discounted amount is paid and when the credit file is updated it will show as satisfied with a nil balance.
Please note our clients XXXX are only accepting Short Settlements.
Upon receipt of these funds you will be sent information that this matter has been concluded ".
All gobbledygook to me, what is the difference when in both cases the amount is discounted??
I suppose this is as far as I can go or do I continue to be pedantic?, after all if I don't end it now then my repayments will continue until 2028.
regards
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Forgot to say that this account is not listed with any CRA's. Will they be obliged to do so when we complete the transaction??Comment
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Re: Full & Final
They don't appear willing to accept it as even being Final. In which case, I can't see any benefit in paying them a bean.
Perheaps when their client realises that, they will change their tune.
Unless of course, their client presses for chasing this through the courts. Would they have a chance of winning if they did?Comment
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Re: Full & Final
Why is it not listed?Originally posted by FCC View Post
If it's because the account was defaulted over 6 years ago and it has dropped off, then they are not entitled to place anything whatsoever on your credit files. Regardless of how and if this is settled.
The DCA or the creditor is not obliged to record anything on your credit files.
However, if the do record something then it must accurately reflect the status account if they are not to fall foul of the Data Protection Act.
Recording that there is still an outstanding balance on your file when the account has been settled and cleared for an agreed sum would certainly appear to be misleading.
Furthermore, there is nothing to distinguish that from an account with outstanding monies that could then be sold to another DCA.
While I think taking up this offer might at stretch be OK to settle the account, it does not give me all the reassurances I would need with 100% confidence.
If it was me, I would be disinclined to part with my cash on those terms.
Is anything challengeable about this debt? If it is, then it may be worth pursuing. Perhaps with a view to extracting a better deal. After all, it sounds like it hasn't been sold on yet. Better deals tend to be forthcoming when they are.Comment
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Re: Full & Final
A partial settlement recorded on your credit status is NOT full & final. Full & Final means just that & by recording it as partial they will be able to return on the basis that they accepted under duress & that it was the only way they felt at the time they would get paid
Therefore if you do decide to make such a settlement its very important that you identify a 'consideration' such as them receiving early payment, or even an extra payment of £1, then they can't come back for more
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It does appear that this firm is accepting short settlements to obtain funds NOW with the intention of coming back for more no matter what they claim nowComment
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Re: Full & Final
Marking your credit files as a "partially settlement" does not in itself allow them to pursue or pass on any remaining balance. Seems to a common misconception. Understandable I suppose.
As stated by the ICO, it is in fact a reasonable thing to place on your credit file where a creditor has accepted less than the full outstanding amount in settlement of a debt.
However, to be accurately reflect the situation the creditor should also zero the outstanding balance to show that no further payment is expected.
Unfortunately the creditor seems to be 'baulking' on that with these short settlements, which is very concerning.
Coupled with the fact that the crucial statements as to future liability seem less than watertight, I wouldn't stump up my cash on that basis.
The phrase "Upon receipt of these funds you will be sent information that this matter has been concluded" is way way short of the clear statement of you future liability that is required.
You really need to see something in writing along the lines of:
"Upon receipt of these funds we will consider the account settled, and you are released from any further liability, whether present, future or contingent."
Unless you have something in writing that is clearly as unambiguous as that, I wouldn't trust it.Comment
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Re: Full & Final
The account was with M & S back in 1999 when I was forced to concede defeat after 10 years of unemployment due to being over qualified and too old in my 50's. I had a great relationship with the collection staff at M & S but they were instructed to forward me on to Rockwell for collection purposes. In June 2000 in the letter that told me I was being passed on they said that the account would be defaulted but I have never received a legal default notice from either company. I have, again, had a great relationship with Rockwell always increasing my repayments before being asked to do so and always on time. I have some concern as to the ambiguity of the responses that I have received from Rockwell and have considered going back to M & S to negotiate direct with them. At this time, however, I feel that I should just continue my repayments, which I have recently reduced from £28.50 to £5.50 as I have been illegally taking my wifes pension into my I/E, and see if they are prepared to wait until 2028 to complete the arrangement. My wife, by the way, has no financial connection in this matter.Comment
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Re: Full & Final
Have this lot been adding interest onto your payments? It seems like you have been paying this off for a very long time.
Whilst I have no idea how much you originally owed, or how much you have paid to date, I'd certainly be questioning why this has been going on for so long.
Some figures and more detail here might be incredibly helpful.Comment
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Re: Full & Final
Originally posted by Nibbler View Post
See red above however the last paragraph in bold should as you state settle matters beyond doubt but just to clarify has the debt been officially assigned to the collector giving them the power to make such decisionsComment
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Re: Full & Final
Original sum £4155.70. Initial repayment £9.49 then increasing through £15 - £18 to £20 then rising by .50p increments every six months. I do maintain accurate records, after years of being nagged by various Secretaries. and the sums are in order. Balance is currently £1174.71 so settlement offer is around 51% of the total. In my opinion quite fair and reasonable and warranting a satisfied and zero balance. But, hey, who am I?
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Sorry, they, like all creditors promised to stop adding interest but continued for the obligatory six months following alerting them to my position. They added a total of £249.12.Comment
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Re: Full & Final
Nonsense. Makes no difference whatsoever.Originally posted by righty View Post
You are making the classic mistake of confusing what is recorded on your credit file with the issue of future liability.
What is recorded on one has no bearing on the other.
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I read it as the debt is still being handled by a DCA on behalf of the original creditor.Originally posted by righty View Post
After such a period of time that does seem a little odd?
However, I do recall M&S hanging on to the account of a few people I've dealt with waaaaaaaaaaaaaaay longer than you would think was normal? Before selling them on that is.
Would be useful if FCC could clarify.Comment
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Re: Full & Final
Imust say I'm very impressed with your determination to do the right thing and repay your obligation.
My main concern was that however much you were paying, was being eaten up by ongoing interest, thus meaning you'd forever be playing catch up. A highly immoral (IMVHO) practice, where the OC is fully aware that the debtor is in severe difficulties, and see it as being a nice little money earner by dragging things out indefinitely.Comment
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