Debt Collection Agencies/Refunds

[di30]

There has been mixed opinions on this matter, of who received the refund of a successful reclaim, for example Payment Protection Insurance/PPI, Credit Card Charges and so on.

For example, a Bank/Finanical Business selling the debt on to a Debt Collection Agency/organisation.

I have been doing a little research on various consumer sites and it seems that some banks/businesses will still try clawing back the refund of what is owed to the customer, or it maybe that the Debt Collection Agency will receive the refund, but this apparently should not be the case once it's sold on.
On the other hand, some customers have received full refunds once the debt's been sold on.

The fact here is that, if the Bank/Business fully assigned the debt onto a Debt Collection Agency, this means it will include all of its respective rights, title, and interest in respect of the account.
So once the sale has been done from business to debt collection agency, this should no longer be nothing to do with the original business.

From the date the debt was sold, the Debt collection agency (DCA) will confirm that Under this assignment, and defined in the Data Protection Act 1998, the DCA is now the Data Controller of your Personal Data contained in the records of this account.

So, basically the bank/business will have no interest in the account from there on.

You can still complain to the bank/business as they were the liable sellers, and if successful where a refund is due, the refund should therefore rightly be paid to the customer.
The customer should decide how they want to use the refund, and if they want to use the refund towards the outstanding debt with the DCA, then it should be left to deal with both Customer and DCA to make these arrangements.

Now on researching, the DCA cannot ask or should not ask for the refund of charges to be paid to them.
The Original creditor has to pay the refund to you (customer), and not the DCA because of "Notice of Assignment".

When the original creditor assigned the debt to the DCA, they did so by passing their right, title and benefit.
They have no right, title or benefit under the assignment.

However, it could be a different matter if the debt was collected under the banks own collection's department, because the debt is still with them, but if you receive a letter to confirm your debt was sold on, and fully assigned now by a (DCA), the bank should no longer have a say on any refund due.

Am looking into these matters further and will post more as I come across anything I think useful.

Did you receive your refund in full (when your debt was sold in full)? Or did it come back to you, whilst your account/debt was sold on to a DCA?

[miliitant]

Re: Debt Collection Agencies/Refunds

I am in agreement in that if the assignment is absolute, the assignee then has all the rights and duties of that agreement (case law backs that up)

so any ppi reclaim or unlawful charges would be the asignee to sort out and claim it back from the assignor

i can see how a claim for ppi can be directed back at the oc in that the account no longer exists with the OC as it has been assigned to the new creditor, assignee

the only exception to this would be what is included in the deed of assignment on liabilities for which case law dictates that all parties to the assignment are entitled to inspect

commercial sensativity does not cut it

hope i am making sense

[di30]

Re: Debt Collection Agencies/Refunds

Thank you, yes you are making sense.

Below is a copy of 2 letters that were sent to a family member (friend), the letters were enclosed in the same envelope, this a letter from Lloyds to confirm the sale of the debt, and the Debt Collection Agency (Cabot).
Going by this, the debt is fully assigned now by Cabot, so I assume as "absolute"?

(I will attach them again when scanner set up), but this is the typed copies below......



(Lloyds letter).
Dated 14 September 2012.

Dear Mr

We are writing to notify you that Lloyds TSB has assigned all of its respective rights, title and interest in respect of the above referenced account (including the outstanding balance) to Cabot Financial (UK) Limited effective 03/08/2012.

The total balance was £XXXX.XX, as at the date of the sake 03/08/2012. Any payment made towards your account after that date will be forwarded to Cabot Financial (UK) Limited, and will be deducted from the balance shown.

Under the terms of this assignment, and as defined in the Data Protection Act 1998, Cabot Financial (U) Limited is now the Data Controller of your personal data contained in the records of this account.

Cabot Financial (Europe) Limited has been appointed by Cabot Financial (UK) Limited to manage your account in line with the arrangements agreed with BLS Collections. It is essential that all future payment and correspondence regarding this account now will be directed to Cabot Financial (Europe) Limited.

.................................................. ..................................
(Cabot letter)

Dear Mr

Welcome to Cabot.
The Cabot Credit Management Group has recently bought the account you held with Lloyds TSB and we're now responsible for answering your queries and receiving payments.

According to your records you currently owe £XXXX.XX. If you wish to repay this amount in full now, please contact how to make your payment,

Your agreed monthly repayment plan with Lloyds TSB now needs to be maintained with Cabot. Please ensure that with immediate effect all future payments are made directly to us.

We regularly review the arrangements on our records, including the monthly payment amount.

[labman]

Re: Debt Collection Agencies/Refunds

Great thread Di! It makes total sense as the bank will already have offset the amount of the debt in its accounts, so it has already 'had its money back.'

While you say, and I'm sure are correct, that it is then up to the debtor how they use the refund, it would seem to make sense to use it to negotiate some sort of F&F.

Can I ask a couple of questions please - you may or may not know the answers yet?

If the bank sells your debt via an Assignment in Absolute, do they then give up all rights to share your data with the third party that is the DCA who bought the debt? What I'm really asking is do the bank have the legal right to tell the DCA how much they have paid you in a ppi refund given they have sold the debt, and the DCA has nothing to do with that side of it anymore?

If someone has a debt which is approaching being Statute Barred and it has been Assigned in Absolute to a DCA, would claiming ppi from the OC, who no longer has any legal interest in it, constitute acknowledgement of the debt, thus resetting the 6 year clock?

[miliitant]

Re: Debt Collection Agencies/Refunds

i would say the bank has no right as it has nothing to do with them now

if you go about trying to reclaim ppi on a debt thats becomming statute barred, you are going to acknowledge the account and would reset the statute of limitations

claiming ppi is not subject to the statute of limitations, its when the claimant became aware of the misselling

[di30]

Re: Debt Collection Agencies/Refunds

Great thread Di! It makes total sense as the bank will already have offset the amount of the debt in its accounts, so it has already 'had its money back.'

While you say, and I'm sure are correct, that it is then up to the debtor how they use the refund, it would seem to make sense to use it to negotiate some sort of F&F.

Can I ask a couple of questions please - you may or may not know the answers yet?

If the bank sells your debt via an Assignment in Absolute, do they then give up all rights to share your data with the third party that is the DCA who bought the debt? What I'm really asking is do the bank have the legal right to tell the DCA how much they have paid you in a ppi refund given they have sold the debt, and the DCA has nothing to do with that side of it anymore?

If someone has a debt which is approaching being Statute Barred and it has been Assigned in Absolute to a DCA, would claiming ppi from the OC, who no longer has any legal interest in it, constitute acknowledgement of the debt, thus resetting the 6 year clock?

Hi and thank you.

I am going to research further into this, as it's only now recently i've been drawn into this sort of thing lol, so really it's new to me as well.

And as there seems to be mixed opinions on this, where some have said that it's been known that the bank that sold the debt to a DCA, they have purchased the account/debt back from them, used the refund to bring down the debt, then sold it on again.
So it maybe the case that, if a refund were due, then the original creditor may make it their responsibility again by purchasing it back from the DCA. (if that makes any sense) lol.

I am not certain on the legal rights the banks do have once they sold the debt, but I have came across posts on various sites that once successful reclaim, the bank have confirmed that it would be forwarding on the debt to the DCA, where I believe has raised concerns with customers on why this has happened when the debt was sold on. (I will see if I can find this again, or any other info in relation and post it once I have it).

[labman]

Re: Debt Collection Agencies/Refunds

Yes, that's definitely an Absolute Assignment Di! :beagle:

[di30]

Re: Debt Collection Agencies/Refunds

The family friend I mentioned, he fell into some hardship difficulties a few years ago, he became ill and could no longer work, I know he has some PPI issues, and now recently dealt with an account package of which he believes he was sold a £25 month packaged accounts where not everything, apart from about 1 product that suited his requirements.
He could no longer afford to keep the account going and went very overdrawn, and they failed to help him change to an account to suit him best.

Anyway, he complained of this to the bank and they rejected to the final decision, and decided to take it to the FOS.

I know he would not mind that if he was successful that it was used to help reduce the debt, but the point here is now what would happen to his refund. (The letter I copied above is his letter(s).

As this is now left to the FOS to make a decision about this, then it maybe that they will agree that the refund should automatically go to the DCA??

[labman]

Re: Debt Collection Agencies/Refunds

If the account has been sold on in full, as it clearly has, to my mind the DCA has no right to access or be given any further information from the bank, but I'm not sure, hence my question about the DCA.

As for the bank, it has completed its business with the DCA, so should have nothing further to do with them IMO. I'm unsure whether when they sell the debt on and offset against tax, the sum offset is the sum of any loan, or the total sum of loan + ppi. If the latter, there is no doubt in my mind that morally the money should go direct to the person to whom it was mis-sold.

The trick of selling it back, doing the refund to the debt, then reselling it again is downright immoral - I'm sure they would argue otherwise! What would happen, for example, if this happened and the amount reclaimed was higher than the amount for which the bank sold the debt to the DCA - this can't be unusual for older debts? The debt would presumably be paid off in full, and there would be a surplus. I have little doubt that the bank would 'find a way' to deduct the ppi from the initial debt though, and not the valueof the debt at sale. Does that make sense?

[di30]

Re: Debt Collection Agencies/Refunds

If the account has been sold on in full, as it clearly has, to my mind the DCA has no right to access or be given any further information from the bank, but I'm not sure, hence my question about the DCA.

As for the bank, it has completed its business with the DCA, so should have nothing further to do with them IMO. I'm unsure whether when they sell the debt on and offset against tax, the sum offset is the sum of any loan, or the total sum of loan + ppi. If the latter, there is no doubt in my mind that morally the money should go direct to the person to whom it was mis-sold.

The trick of selling it back, doing the refund to the debt, then reselling it again is downright immoral - I'm sure they would argue otherwise! What would happen, for example, if this happened and the amount reclaimed was higher than the amount for which the bank sold the debt to the DCA - this can't be unusual for older debts? The debt would presumably be paid off in full, and there would be a surplus. I have little doubt that the bank would 'find a way' to deduct the ppi from the initial debt though, and not the valueof the debt at sale. Does that make sense?

Cheers and yes it certainly does make sense.
I would have thought it was illegal for them to do that (buying back) then selling the debt again, but they seem to have a law of their own when they want to don't they?

Maybe it would be a good idea for (family friend) to also forward the letter(s) he received from both Lloyds and Cabot, as I'm aware he complained to the FOS before the OC sold the debt on to the DCA.

Thank you.

[labman]

Re: Debt Collection Agencies/Refunds

It's a shame we can't force them to reveal the price for which they sold / bought the debt in the assignment isn't it. It would make life easier!

[dogtired]

Re: Debt Collection Agencies/Refunds

Di,
I had two via the FOS last year.
Both with HBOS

A bank of Scotland Card, "sold" to Cabot who had already said it was "irretrievable, the refund went to them and I got £80
A Sainsbury card which was passed to Blair Oliver Scott during the PPI dispute.
With that I got the letter one day and the refund, in full to days later, "In settlement"
I still got letters from Blair Oliver and when I requested a CCA they paid the fee onto the alleged remaining debt.
This is still ongoing and up to now has been with four DCAs,
A SDAR had the wrong name on a copy of terms and conditions and there were date discrepancies.

[labman]

Re: Debt Collection Agencies/Refunds

Hi DT,

Did you challenge BoS at all to ask under what legislation they now retained the right to pass on YOUR money to a third party? Technically the debt is nothing to do with them anymore, and I cannot see how they can legally say they can give away what is yours to offset a debt owned by someone else. They wouldn't give it to British Gas to pay off your gas bill would they. I'm intrigued by this aspect of the thread - not to mention sharing your data still with a third party who no longer has anything to do with the debt owed.

As for your SDAR, they don't have to have any name on the T&C's, the T&C's jsut have to be the same as the ones in place when you took out the card. Is the agreement a recon or a true copy?

[di30]

Re: Debt Collection Agencies/Refunds

It's a shame we can't force them to reveal the price for which they sold / bought the debt in the assignment isn't it. It would make life easier!

Yes it certainly would make life a lot easier, it would be very interesting to know lol

[di30]

Re: Debt Collection Agencies/Refunds

Di,
I had two via the FOS last year.
Both with HBOS

A bank of Scotland Card, "sold" to Cabot who had already said it was "irretrievable, the refund went to them and I got £80
A Sainsbury card which was passed to Blair Oliver Scott during the PPI dispute.
With that I got the letter one day and the refund, in full to days later, "In settlement"
I still got letters from Blair Oliver and when I requested a CCA they paid the fee onto the alleged remaining debt.
This is still ongoing and up to now has been with four DCAs,
A SDAR had the wrong name on a copy of terms and conditions and there were date discrepancies.

So the FOS agreed as well that it should go to the DCA then?
Was the debt fully assigned to the DCA, or was the Original creditor) just using them (without fully selling the debt to them) to collect the payments/refund?

Good luck with this, please keep us posted.