Lowell bought 'debt' from Orange

[PersonOfInterest]

Dear all

I recently became a proper member of the Lost Generation and moved back with the parents after completing my university studies. Waiting for me was a large stack of mail and working my way through it, it became apparent that Orange thought I owed them some money. There were a number of letters, dating back a year or so, with the amount of money owed increasing with each one, jumping from around £50 to £150 to £250, but in the most recent letters seems to have reduced to just under £200.

Eventually my debt is passed to "Moorcroft Debt Recovery" who "may be able to offer a significant discount" and then, after a gap of six months or so with no new correspondence, a letter from Lowell, who have bought my debt and informed me that Orange have registered me as defaulting and demanding immediate payment.

All this has come as quite a shock; I cancelled my Orange contract in April last year, giving the required one month's notice and then moved to a different provider, thinking no more of it. I have no idea how that could possibly cost me so much and why the figure owed seems to change and, especially, go down at one point. The fact that I was offered a discount also makes me suspect that the figure has been inflated somewhat - if I owe £200 then surely I owe £200 and there's little wiggle room?

Obviously I want to get this dealt with as quickly as possible and make sure my credit rating stays decent, but I have no idea how to proceed. I contest the debt completely - I don't even know what the breakdown of this debt is meant to be! - but I don't want to accidently become liable for it by somehow saying the wrong thing on the phone or in a letter.

Any advice you could give me would be great. Thanks in advance.

[Kafka]

Re: Lowell bought 'debt' from Orange

Firstly you need to look back at your statements to see how the amount owing increased before it left Orange. Typically there will be a small amount outstanding and they will add penalty charges on for non payment, making the amount snowball. Such charges can be challenged because in law they can only charge actual costs for recovering defaulted accounts, not make a profit.

If the account gets sold on, then the purchaser pays only a very small amount for the debt once it has been written off as a tax loss, but they still try to collect the full amount.

Can you provide a timeline of the correspondence in date order, how the debt grew and what the increases were classed as? That will provide a better picture for comment.

A couple of other points. DCAs often say they have purchased a debt when they haven't, but Lowell are a debt purchaser so probably did buy it. Also, note that a phone is a service contract, not a credit agreement, so the legal issues are different from the ones dealing with loans.

[PersonOfInterest]

Re: Lowell bought 'debt' from Orange

Thank you for your reply. I'm away visiting friends until Saturday, but I will have a look at the charges when I get back.

Could you tell me some more about how the legal issues are different? Is that good for me or bad for me?