Debt Collection Agencies/Refunds

[Bill-K]

Re: Debt Collection Agencies/Refunds

Awesome posts from Labman, if I may say so.

I always think of PPI reclaiming as a 2-stage process. The first stage (or hurdle) is to prove - or get an admission of - mis-selling of the PPI. This has to come from the OC, as any subsequent agency would not have had any part in the sales process. If we can establish mis-selling, then we go on to the second stage, which is quantifying the claim.

The OC will have charged PPI up until the debt was passed to a DCA, and at this point there seem to be two possibilities. If the assignment was equitable, then the DCA is simply acting as a collection agent for the OC, in which case the OC has still been receiving the PPI payments (via the DCA) - so our claim is still with the OC.

If the assignment was absolute, then the DCA has bought the debt from the OC, along with all rights and duties. So they will then appear to be taking payments which include PPI, but will NOT be passing these to the OC. But this is complicated by the different ways in which a PPI premium is paid. If this debt was a loan where a single 'upfront' premium was charged, then the repayments on that loan do NOT actually contain an element of PPI - they contain an element of repayment toward the loan that was made to cover the cost of the upfront single PPI premium. The OC paid the PPI insurer/underwriter the total PPI 'lump sum' premium at the outset, and then proceeded to take repayments on a loan to cover this - and to charge interest on that loan. Whether or not they managed to get the insurer to refund that premium is not our concern.

But at some point, they sold the loan to the DCA at an undisclosed price, and the DCA bought it 'in good faith,' not knowing that it included a dodgy PPI deal. This is where the game of 'ping-pong' may start, I guess. The DCA will still be demanding full payment, even though they probably bought the debt cheaply. As it is they who are now taking our money, then I think we have a legitimate claim with them, because the debt has to be re-scheduled under FSA rules, and the DCA has accepted that responsibility. Again, it is - I believe - NOT our problem if the OC sold them the debt. That was a deal over which we had no control, and as such it is for the OC and the DCA to argue over. This is where the DCA will be tempted to 'fob us off' with the argument that we must take up our claim with the OC, but I don't believe we should accept that.

With a credit card, it's a bit different. The card account is effectively closed when it is passed to the DCA. Until that point, the OC has been charging a variable monthly PPI premium, along with account interest on the accumulated premiums. As soon as the DCA takes over, then no more PPI will usually be charged, as they will be collecting on a fixed amount - the balance owing on the card account. So, I think our PPI claim is entirely with the OC here.

Re: Debt Collection Agencies/Refunds

DPA 1998 Scedule One Part II

The fourth principle is not to be regarded as being contravened by reason of any inaccuracy in personal data which accurately record information obtained by the data controller from the data subject or a third party in a case where—(a)having regard to the purpose or purposes for which the data were obtained and further processed, the data controller has taken reasonable steps to ensure the accuracy of the data, and
(b)if the data subject has notified the data controller of the data subject’s view that the data are inaccurate, the data indicate that fact.

So, if an Absolute Assignment has taken place, and the Data Controller has now become the DCA, if they now process ANY data, the section above would indicate the new Data Controller has to take reasonable steps to ensure the accuracy of the information.

I wonder if this could be used to tie them in knots. I know I used the DPA very effectively against the DWP in a dispute resolved a year or two ago.

Along with asking for a copy of the agreement, as this will now mean they are going to commence processing your data, it might also be interesting to send a letter asking for their policy on ensuring the accuracy of information handed to them under an Absolute Assignment. I just hate that word 'reasonable!'

[di30]

Re: Debt Collection Agencies/Refunds

Just having a read on the back of his Cabot letter.
IMPORTANT INFORMATON:

This letter acts as Notice of Assignment of your account to Cabot Financial (UK) Limited and as such should be kept by you at all times.

Cabot Financial (UK) Limited is the legal owner of the account as referenced.

Cabot Financial (Europe) Limited is the data controller. You have the right to access to information we hold about you.
If you wish to obtain a file on data that we hold about you, then you must write to:
The Data Protection Officer (address) and they charge the usual £10 fee, and this service may request evidence for eg, current passport, driving licence in order to complete request.

[di30]

Re: Debt Collection Agencies/Refunds

With my friend's letter from Lloyds, it says, Lloyds has assigned "all of its respective rights, title, and interests of the above referenced account.
Under the terms of this assignment, and as defined in the Data Protection Act 1998, Cabot Financial (UK) Limited is now under the Data controller of your Personal Data contained in the records of this account"

This is why I think he should request for a copy of his CCA.

On his letter, it looks as if Lloyds had used BLS collections before selling the debt to Cabot to collect his payments.

Re: Debt Collection Agencies/Refunds

Okay, thanks. My OC said in the assignment letter that the DCA was now the data controller of my information...

Did it, or did it say the DCA was now the data controller of the information previously held by them? Thus, the DCA takes on the right and duty to report to CRA's.

They cannot totally pass over responsibility if you think about, as if you have ppi the claim, I believe, goes to the OC. In order to process a ppi claim they must retain a right to process your data, or is this given on a ppi reclaim form?

[di30]

Re: Debt Collection Agencies/Refunds

I'm afraid this is where my total ignorance of ppi stops me being able to answer this. If you can explain to me in simple terms how ppi works, I may be able to have a stab at answering the question.

Is ppi and integral part of a loan or a separate insurance policy?
Are all payments clearly divided into two elements - one for the loan, one for the ppi?
Is the ppi always with the same company as the loan, or does a lender act as an agent for another company?
When a loan is sold on, why is a ppi claim to the original creditor?

I think I know some of the answers,but would like to be sure - there may be more questiions then lol!

LOL that is fine....

Usually the PPI is added within the loan, to make one monthly repayment, so this would also attract interest....

There are however, stand alone insurance you can purchase to protect, loans, credit cards etc, but banks/financial businesses automatically sell their own product and include it within the loan.

For example, Lloyds TSB sell an insurance, and to what I know of in my friend's case, the underwriter for the insurance they used for his was Aviva, but it is all down to Lloyds to arrange it, they are responsible.

With the insurance being added within the loan, if the debt is passed on to DCA, it will include the balance of the PPI, but on a mis sell, you do pursue the responsible party for selling the product.

Have I missed anything folks, getting tired now? lol

Re: Debt Collection Agencies/Refunds

I'm afraid this is where my total ignorance of ppi stops me being able to answer this. If you can explain to me in simple terms how ppi works, I may be able to have a stab at answering the question.

Is ppi and integral part of a loan or a separate insurance policy?
Are all payments clearly divided into two elements - one for the loan, one for the ppi?
Is the ppi always with the same company as the loan, or does a lender act as an agent for another company?
When a loan is sold on, why is a ppi claim to the original creditor?

I think I know some of the answers,but would like to be sure - there may be more questiions then lol!

[di30]

Re: Debt Collection Agencies/Refunds

Labman, I shall mention to him about requesting for the CCA's, and see what happens lol, no harm done, cheers.

[jax50]

Re: Debt Collection Agencies/Refunds

No. Every organisation has a Data Controller who is responsible for the processing of ANY data that takes place within that organisation. If more than one organisation is processing your data, more than one Data Controller will be involved.

Okay, thanks. My OC said in the assignment letter that the DCA was now the data controller of my information...that sort of says that the OC no longer is, which by my logic means they must have done a legal assignment...otherwise how could the OC ever handle my data ? If the OC had said the DCA was also a data controller...well that would be different.. I'm assuming permission is not required from a debtor for a DCA to take on the handling of personal data..or maybe the original 'agreement' with the OC included something about giving them permission to assign on the data controlling requirement, but you still think they would ask, then we could say No, and that would confuse them wouldn't it...??

[di30]

Re: Debt Collection Agencies/Refunds

Then this.......on the same link as posted in my above post......

redress

We are frequently able to settle complaints against debt collectors by informal agreement, which – if we find that the debt collector has done something wrong – may involve a payment of compensation for distress and inconvenience caused.
In some of the cases that we see, the consumer hopes to have their debt written off in settlement of their complaint of unfair behaviour by the debt collector – or believes that that is the limit of what they could ever receive. But writing off the debt is not necessarily an appropriate outcome and it is more often the case that we will recommend a suitable amount of compensation – which we will assess individually in the light of what has happened, and the actual effect on the consumer, so as to be sure that it is fair. So, compensation will not necessarily mirror the amount of the debt; it could be less, or it could be more.
Sometimes, we will decide that the compensation should be used in reduction of the consumer’s debt. In other cases, we will decide that it should be paid direct to the consumer – depending on what we consider more appropriate for that case.
Not every settlement will involve a payment of compensation. We might, for example, direct the debt collector to accept a reasonable offer of payment made by the consumer.

[di30]

Re: Debt Collection Agencies/Refunds

Not much said on the FOS site (refunds), but just came across this information......

when debts are sold

It is not unusual for lenders to “sell” a consumer credit debt on to another lender, or to the business that has been trying to collect the debt of their behalf. The name sometimes given to this process is assignment.
Consumers are entitled to be told when their debt is assigned, though in some of the cases that we see this has not been clearly explained to the consumer and this can lead to administrative confusion and problems.
In general terms, the new owner of the debt takes over the same rights and responsibilities as the original owner had – and this is reflected in the way that we will deal with complaints that are brought to us by consumers whose debts have been sold. So, for example, we would expect the lender to provide the same quality of evidence to support their case – whether they were the original lender, or one to whom the debt had later been assigned.

http://www.financial-ombudsman.org.u...g-note.html#11

[di30]

Re: Debt Collection Agencies/Refunds

Back a few months ago, (Family friend) complained of his PPI to Lloyds, he had 2 loans with PPI, that he was also wrongly sold, because he was disabled, and in part time self employment (he had to end up coming out of work completely - as ordered by his Doctor), it's now ended with the FOS because he was not happy with the outcome, I believe it was because even though they upheld the complaint, they were going to use the full refund plus all interest to be used towards the debt that was with the collection dept.
He did not mind them using the money for the refund, but he argued on the interest and believed he was entitled to that part of the redress.

As said above, the account/debt has been sold to Cabot, to what is worded like as if it's an absolute assignment.
So as it's now with a DCA as stated "assigned as absolute" if the FOS would give the same outcome, that included the interest to be paid to the DCA, even though its no longer with the collections dept.

Re: Debt Collection Agencies/Refunds

Right, I set myself up here to be shot down lol, but here goes! I know some of the answers are over simplistic, but they're intended to help people learn.

Deed of assignment
Re: what is a deed of assignment?
No deed of assignment no legal standing!

In this context, the Deed of Assignment is the master document that states what is being transferred and on what terms. It is highly unlikely you will ever get to see this without using the CPR's through court to force disclosure.

I forgot to say that it looked like a recon of documents with the SDAR?
And that also during the course of it they got the accounts confused!

There is nothing wrong with them supplying recon documents. You can put them on the spot about whether or not they hold a 'True Copy' using the CPUTR letter.

I am not sure if (family friend) have requested for his copies of CCA from the DCA, now that they confirm on the letter that under the terms of this assignment, and as defined in the Data Protection Act 1998, Cabot is now the Data Controller of the personal data contained in the records of this account. I think he should and see what they come back with.

I do know he is forwarding payments by standing order to Cabot now on a monthly basis, as the account was also confirmed sold as from 3rd Sept 2012, he has been paying every month to them since then.

It would be interesting to find out wouldn't it. It's only £1.00 at the end of the day.

does the fact that a DCA becomes the' data controller' confirm then that they assigment is absolute ?

No. Every organisation has a Data Controller who is responsible for the processing of ANY data that takes place within that organisation. If more than one organisation is processing your data, more than one Data Controller will be involved.

Also, as someone said to me...an OC providing financial information to a fully assigned DCA doesn't get more 'personal' for the alleged debtor does it, so to say the DPA is not being breached in providing this info seems a bit of a dodgy statement to make. Is it possible to ask the DP 'people' direct questions like this ?

When you say the 'DP' people, to whom are you referring. If you mean the ICO, they have a very comprehensive website. The DPA itself is a very readable piece of legislation. As long as you have given permission for your data to be processed by an institution, then they can do so legally. With regards to the example you have cited, the critical issue goes back to the original question here - it depends what is written in the Deed of Assignment is my best guess.

Gosh - question time! Hope that helps a bit, and for others out there, I am well aware there are things missed out, but I could have written pages about most of the questions.

[jax50]

Re: Debt Collection Agencies/Refunds

Interesting points there Jax.
Making a reclaim via PPI from what I know of does not affect the relationship, and you are right there is no reason why the DCA should know if this is being done, as I don't believe this part of it has anything at all to do with the DCA, as this would be the OC's liability, even if the account/debt's sold on.

I am interested to know though if the customer ended up complaining to the Financial ombudsman service (FOS) what happens there, no matter if equitable or absolute assignment.
As the FOS, will be fully aware of the debt being sold, because I assume the OC would have enclosed this information to the FOS, of when they request for the information.

I am still learning on this, so please bear with me lol. .

It would be interesting to hear from anybody who has gone through the FOS with a complaint about refunds...or even the ICO ? otherwise you might have to wait for my case to be adjudicated on. .. Am sure you will turn something up Di through your investigations....

[di30]

Re: Debt Collection Agencies/Refunds

There's a sort of logic to that, but that doesn't always mean much in this seedy world does it ? I think even if the OC has sold absolute it doesn't make them exempt from retrospectively being taken to account. and whatsmore, tackling an OC for PPI for example doesn't affect the relationship a debtor might have with the DCA.... The DCA may never know , and why should they, so even an UE situation may not be jeopordised by a claim on the OC if the DCA is dealing with the UE themselves... The exchange of personal information between the OC and the DCA would surely be forbidden under DPA. ?

Interesting points there Jax.
Making a reclaim via PPI from what I know of does not affect the relationship, and you are right there is no reason why the DCA should know if this is being done, as I don't believe this part of it has anything at all to do with the DCA, as this would be the OC's liability, even if the account/debt's sold on.

I am interested to know though if the customer ended up complaining to the Financial ombudsman service (FOS) what happens there, no matter if equitable or absolute assignment.
As the FOS, will be fully aware of the debt being sold, because I assume the OC would have enclosed this information to the FOS, of when they request for the information.

I am still learning on this, so please bear with me lol. .