Debt Collection Agencies/Refunds

[di30]

Re: Debt Collection Agencies/Refunds

MBNA, refunded OTR and their debt was fully assigned by DCA (Absolute), the cheque is made to the customer, so that is some good news.
I mentioned about this the other day here, because despite the customer being informed a cheque was being sent, the customer was not fully aware until yesterday if in the end it would end up with the DCA.

It should be as we all know the same for all.

[jax50]

Re: Debt Collection Agencies/Refunds

As an addendum to point 7. What if the debtor had already paid off the and settled the account with the DCA, prior to the refund being agreed by the OC with the debtor. Surely in that scenario a cheque would have to be issued to the debtor ? This would imply that it is not impossible to refund by 'payment', but that they are using 'offset', even with a 3rd party ..

[jax50]

Re: Debt Collection Agencies/Refunds

So - for EXC to forward this to the OFT, we need to list some scenarios. I'll kick off with the easy ones, then...
1. (For completeness). The OC has not assigned the debt, but there are arrears, and the OC uses part of the refund to clear these.
2. As above, but the OC uses the entire PPI refund to reduce the debt further than just by the arrears - or to clear the debt completely, and earlier than scheduled.
3. The OC has Equitably assigned a DCA to act as collection agent, and the DCA claims part or all of the refund to settle the arrears. This may not be a feasible scenario, but I wouldn't be surprised if some DCA's might try this on in order to boost their commission as collectors.
4. The OC has Absolutely assigned the debt to a DCA, and sends all or part of the refund to the DCA to clear the arrears amount - or even the remaining balance. The DCA re-schedules the loan to reflect the exclusion of PPI from the balance owing.
5. The Absolute assignee DCA refunds all PPI which it has taken from the borrower, and also the PPI which the OC had taken prior to assignment.
6. As above, but the DCA uses some or all of the total PPI to offset against arrears - or to clear the debt.

7. The OC has applied 'unfair' interest/fees to an account. Some time later the account is defaulted and sold in absolute assignment to a DCA. Later still the OC agrees to a refund of the unfair charges, but insists it will apply the refund to the DCA, and not the debtor.

[Bill-K]

Re: Debt Collection Agencies/Refunds

So - for EXC to forward this to the OFT, we need to list some scenarios. I'll kick off with the easy ones, then...
1. (For completeness). The OC has not assigned the debt, but there are arrears, and the OC uses part of the refund to clear these.
2. As above, but the OC uses the entire PPI refund to reduce the debt further than just by the arrears - or to clear the debt completely, and earlier than scheduled.
3. The OC has Equitably assigned a DCA to act as collection agent, and the DCA claims part or all of the refund to settle the arrears. This may not be a feasible scenario, but I wouldn't be surprised if some DCA's might try this on in order to boost their commission as collectors.
4. The OC has Absolutely assigned the debt to a DCA, and sends all or part of the refund to the DCA to clear the arrears amount - or even the remaining balance. The DCA re-schedules the loan to reflect the exclusion of PPI from the balance owing.
5. The Absolute assignee DCA refunds all PPI which it has taken from the borrower, and also the PPI which the OC had taken prior to assignment.
6. As above, but the DCA uses some or all of the total PPI to offset against arrears - or to clear the debt.

[Celestine]

Re: Debt Collection Agencies/Refunds

Yeah it is a very good question.

Credit card charges refunds....even some bank charge refunds could be up for examination.

[di30]

Re: Debt Collection Agencies/Refunds

Good one Jax, you beat me to it, I was about to ask similar lol, cheers.

[jax50]

Re: Debt Collection Agencies/Refunds

Just waiting on the credit dept to get back to me and then we can ask them some more specific questions.

Hi Mark

We have a query regarding the right of set-off by lenderswhich I realize isn’t answerable by your department but we were wondering ifyou could put us in touch with the relevant OFT department that could assist uswith it.

Essentially it involves the growing practice of some banksto off-set PPI compensation awards to debts that have been sold on/assigned tothird parties and we’d like some clarification on the rules. We’d be gratefulif you could give us the contact details of who we should ask.

Also, when are you expecting to publish your report on thePCA market?

Regards

Nick

Hi Nick,
I have forwarded your query to colleagues in credit who may be able to help you further.
On our review, the intention is still to publish this year, but the deadline is tight and there may be some slippage.
Regards
Mark

The Office of Fair Trading
Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX
Switchboard (020) 7211 8000 Web Site: http://www.oft.gov.uk

Do you think the above enquiry would embrace all refunds, not just PPI ? Where an OC has misapplied charges and later conceded this was unfair (and by later I mean several years later), and agreed to refund ...then the same issue arises as to how this is undertaken.

[Bill-K]

Re: Debt Collection Agencies/Refunds

Bill-K, Would you say this applied to any refund, not just PPI ? In the same circumstances where an OC remains liable for the original contract and has agreed to refund 'monies' (unfair fees and charges in this case), but insists on 'paying this off the outstanding balance ' with a 3rd party DCA ? That is a DCA with legal assignment (not equitable).

Well, based on my limited and recently-acquired understanding of this, I would say that it could be applied to any refund - but I think this would depend on the nature of the refund, or more accurately, the contract(s) relevant to the cause of the refund. Just my guess, though. I'm thinking that regulated loans and credit cards would be OK., but where the CCA isn't involved, then we may need to check what contracts (if any) are involved, and what laws or regulations then apply. For instance, mortgage PPI, overdraft charges, packaged bank accounts etc., may not automatically be covered in the same way as CCA-regulated contracts.

I'd welcome comment and dissent, though, as I'm out of my depth, really.

[Bill-K]

Re: Debt Collection Agencies/Refunds

LOL - Well, why bark yourself if you have a dog, Labman ? !!! Actually, you did allow for my friend to be either sex - so I took up your invitation !!! TBH, she's a feisty old Bird, and is often mistaken for a male.

Sure - actually taking that appropriation argument into court would be a 'bench too far' in most cases, and we're better to just keep at the OC in a 'war of attrition,' and hope they eventually give in because they cannot argue any further.

I see EXC has already been in touch with the OFT, so I guess we need to sketch out a number of distinct scenarios to put to them. Thanks for your help in here, EXC.

And indeed, thanks Di - and Cel - for kicking this off.

[EXC]

Re: Debt Collection Agencies/Refunds

No probs but don't hold your breath - there may be some slippage with their response!

[di30]

Re: Debt Collection Agencies/Refunds

Ooh thank you EXC.

Will be keeping a close eye on this, cheers from me and on behalf of everyone here.

Re: Debt Collection Agencies/Refunds

mmmmmmmmmmmm slippage pmsl

Does it really matter now lol? I certainly hope not.

Strange how automatic pilot kicks in when you're really tired pmsl

[di30]

Re: Debt Collection Agencies/Refunds

Lmao Di x

[enaid]

Re: Debt Collection Agencies/Refunds

mmmmmmmmmmmm slippage pmsl

[EXC]

Re: Debt Collection Agencies/Refunds

Just waiting on the credit dept to get back to me and then we can ask them some more specific questions.

Hi Mark

We have a query regarding the right of set-off by lenderswhich I realize isn’t answerable by your department but we were wondering ifyou could put us in touch with the relevant OFT department that could assist uswith it.

Essentially it involves the growing practice of some banksto off-set PPI compensation awards to debts that have been sold on/assigned tothird parties and we’d like some clarification on the rules. We’d be gratefulif you could give us the contact details of who we should ask.

Also, when are you expecting to publish your report on thePCA market?

Regards

Nick

Hi Nick,
I have forwarded your query to colleagues in credit who may be able to help you further.
On our review, the intention is still to publish this year, but the deadline is tight and there may be some slippage.
Regards
Mark

The Office of Fair Trading
Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX
Switchboard (020) 7211 8000 Web Site: http://www.oft.gov.uk