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Debt Collection Industry In Crisis

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Oh dear. Its the debt collecting recovereh! NOT!

http://www.telegraph...-companies.html

Banks are pulling credit lines from collectors who need funds to buy bad debt. At the same time, rising unemployment is reducing recoveries. The result has been higher costs and lower revenues. Some of the country's top debt collection companies, many of which are owned by private equity, are expected to report losses or severely reduced profits.

Worst hit are the debt buyers - companies that purchase bad debts off the banks and then collect them for profit.

1st Credit, one of Britain's leading debt buyers, which was 60pc acquired by Bridgepoint six years ago in a deal that valued it at £72m, is just one debt buyer in the process of revising its business model. Almost exclusively a debt buyer now, it plans to generate a quarter of its income from lower-margin debt servicing within two or three years.

Edited by John Steed

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If it's lucrative to service these debts at lower rates - the banks need to be doing this themselves... they can't afford to line others' pockets cleaning up their mess.

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Too surreal for words, debt companies buy bad debt with yet more debt.

It doesn't sound Ponzi at all.

One wonders if you could buy your own debt, if you owed money to a bank! :lol:

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Too surreal for words, debt companies buy bad debt with yet more debt.

It doesn't sound Ponzi at all.

:lol: Its getting beyond a joke.....what next....awaits with bated breath. ;)

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This is great, I would love it if the debt collectors can no longer borrow to buy debt, as I have decided to default on one.

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One wonders if you could buy your own debt, if you owed money to a bank! :lol:

Yes you could pursue yourself for payment. I wonder if the banks would go for the sales pitch that you know where the bugger lives and it will be impossible for them to ignore the phone? :lol::lol:

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|'m guessing the real problem is that people have cottoned on to the fact that they cant be easily forced to pay back the money. If you have no traceable assets and little or no disposable income your pretty much untouchable.

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|'m guessing the real problem is that people have cottoned on to the fact that they cant be easily forced to pay back the money. If you have no traceable assets and little or no disposable income your pretty much untouchable.

Yes, the secondhand price of a 42 inch widescreen must be around .....nothing.

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|'m guessing the real problem is that people have cottoned on to the fact that they cant be easily forced to pay back the money. If you have no traceable assets and little or no disposable income your pretty much untouchable.

Anything of value has / is going on ebay, a lot of this is going minimalist before I move house.

Thing is, I called with a reasonable payment plan for them, but they said no, and the choice then was to leap a wall of arrears (can't do) or allow them to put me in their own version of bankruptcy, and decide what I paid to other creditors, which I found unacceptable. I now face a choice of just paying according to the payment I decided, or start getting into the six years with no contact now. It really makes no sense to pay them back. (UKs worst CC company).

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It is intriguing that a separate company can "buy" the debt from a company, without your knowledge or acceptance.

You have a contract with a company - I cannot see how a third company is allowed to then step in and claim money from you. It just doesn't feel right.

Even if it is legal, if company B "buys" your debt from company "A" for 50% of the debt value, how can you owe company "B" any more than the amount they have paid for the said debt? How can company B charge you interest charges or late payment charges, or anything else?

It stinks.

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The business model does have flaws as several of the debt collection companies have been warned by the Office of Fair Trading about their debt collection behaviour and are under threat of having their licences revoked.

Where there are substantiated doubts about a trader's fitness, the OFT issues a 'Minded to Refuse' or 'Minded to Revoke' Notice (MTR). This is a formal notice advising the applicant or licensee that the OFT is minded to refuse to grant them a licence or is minded to revoke their existing licence and inviting them to make representations to an independent OFT adjudicator who will make a decision on the case (see below). The trader retains their licence until the adjudication process and any subsequent appeal is concluded.

http://www.oft.gov.uk/OFTwork/credit/enforcement-action/#named2

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|'m guessing the real problem is that people have cottoned on to the fact that they cant be easily forced to pay back the money. If you have no traceable assets and little or no disposable income your pretty much untouchable.

Yes. I have written about this fact on this board a few times recently. I reported the case(s) of, firstly, a junior work colleague and, more recently, accquaintances outside of work - who have unsecured debts and have recently opted to cease completely all payments and contact with their creditors.

I have seen first hand the sequence of letters they have received and it is not hard to see how, IF one keeps their nerve and does not panic/cave in/pay up, that very quickly the letters become farcical/repetitive and plainly toothless in terms of what 'they' can actually do to you.

One of the above said new disciples of non-compliance went to seek professional legal/financial advice prior to him and his wife taking the default option. The conversation, apparently, went along the lines of the advisor(s) mentioning the usual range of debt managemnt options - bankruptcy, IVA and DRO.

In each case said accquaintance retorted with "But what IF I JUST DONT pay. FULL STOP?!". Partly, he said, because he got the feeling said advisor couldnt grasp the concept of someone deliberately and willfully not paying. This was met with "Err well really you should....", followed by "Or what?!". "WHAT can 'they' do to me IF i walk away from it all?!".

Once said accquaintance discovered and had confirmed that, contrary to popular belief, one cannot be deprived of their liberty (a la debtors prison in Dickensian times, confiscation of passport to prevent leaving the country, etc) the meeting ended very quickly.

I would be surprised IF, as debtors circumstances get harder and harder, that they wont increasingky start to ask bolshie questions that they previously would never had thought of asking. IF, and say IF, these attitudes and wising up to the actual legal facts that I have seen is reflected statistically elsewhere in the country then it is not hard to see how the banks, etc could be facing an imminent sh*tstorm of unsecured debt defaults.

Edited by anonguest

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Any operation that needs to perpetually roll credit lines over to stay in operation should really be taking a close look at their business plan. The lenders clearly are.

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It is intriguing that a separate company can "buy" the debt from a company, without your knowledge or acceptance.

It's a risk they take that you won't object.

Typically they contact people and then rely on them responding with something other than "who the ****** are you?"

You have a contract with a company - I cannot see how a third company is allowed to then step in and claim money from you. It just doesn't feel right.

Even if it is legal, if company B "buys" your debt from company "A" for 50% of the debt value, how can you owe company "B" any more than the amount they have paid for the said debt? How can company B charge you interest charges or late payment charges, or anything else?

It stinks.

Aye.

Folks do it to themselves mostly though, by not asking simple questions.

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Any operation that needs to perpetually roll credit lines over to stay in operation should really be taking a close look at their business plan. The lenders clearly are.

Systemically, that's every single business currently in existence.

If you haven't borrowed your money, then someone else has done for you.

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I would be surprised IF, as debtors circumstances get harder and harder, that they wont increasingky start to ask bolshie questions that they previously would never had thought of asking. IF, and say IF, these attitudes and wising up to the actual legal facts that I have seen is reflected statistically elsewhere in the country then it is not hard to see how the banks, etc could be facing an imminent sh*tstorm of unsecured debt defaults.

I believe this will be the case, hurting the debt collection agencies further. I would have happily paid off the debt, but the CC company's seeming solution was to refuse a payment plan that in fact was exactly like their own plan, just without the form filling and allowing them into all my personal financial details, call me 15 times a day and force me into their own version or official bankruptcy (which would mean my preferred creditors, which include a well behaved cc company would also lose out) . In fact, attempting to negotiate with a call centre in India is a farce.

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One wonders if you could buy your own debt, if you owed money to a bank! :lol:

Of course, its what people forget, banks WANT you in debt...its an ASSET on their books.

Nothing like Government sponsorship of your product to help an industry....and the lending industry has a political duopoly all its own.

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Any operation that needs to perpetually roll credit lines over to stay in operation should really be taking a close look at their business plan. The lenders clearly are.

nonsense...thats called GDP growth.

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"But what IF I JUST DONT pay. FULL STOP?!".

Worst case is you get summoned to a civil court where they ask you submit details of your assets and income/expenditure. They then issue a judgement against you which, if you have no assets or income in access of reasonable living expenses, is usually to pay a token amount like £1 a month.

Unsecured debt is essentially worthless in this country.

Edited by goldbug9999

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Worst case is you get summoned to a civil court where they ask you submit details of your assets and income/expenditure. They then issue a judgement against you which, if you have no assets or income in access of reasonable living expenses, is usually to pay a token amount like £1 a month.

Unsecured debt is essentially worthless in this country.

Again, so I have learnt to my intrigue, one of the not-quite-correct commonly accepted 'myths'.

The key point I have made is when a debtor ceases ALL contact with the creditors or anyone acting for them (including courts!).

Yes - one can, apaprently, receive a demand from a court requesting various personal details, etc.

It is at or by this stage of matters that, again apparently, most 'cave in' out of 'fear'. The key thing is to read the wording and terms very carefully. Failure to respond to the letter is not an offence. The onus rests with the creditors and court to prove that you, the debtor, received the demand. It is not very difficult to 'avoid' receiving such a document. Indeed one of the aforementioned accquaintance creditors long since recieved such an ominous and, on the face of it, scary letter. He ignored it. Nowt has happened! He has been in and out of the country several times. No interantional arrest warrant issued or such like! he still has his monthly mobile phone contract too!

IF, and I emphasise IF, the debtor ceases ALL communicaton with the creditor the creditor has no way of even knowing if the debtor is even still alive! The creditor must prove the whereabouts and circumstances of the debtor to the court.

Attachment to earnings orders, made in ones absence? Sure! BUT, once again, the creditor must supply the court with up-to-date personal information on the debtor, such as his/her place of work, etc - which they cannot do IF the debtor has not cooperated and supplied the information. Such orders cannot be made against the self-employed either.

Edited by anonguest

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Thats harrassment and I doubt legal.

There was a recent case where the debt was over turned due to harrassment. They do call up to 15 times a day including Sundays. My phone just quacks when it's them, no problem.

It was just so odd, how the threats were read out to me by someone at an Indian call centre. Kind of like having it read in a comedy voice. Oh, they do try to be so stern sounding with you. FAIL. I did say that if they force this i will go into bankruptcy and they would lose the lot, including any future custom.

I have to say the other card co were exceptional - froze the account immediately, stopped interest and charges and wished me luck getting my new job. They were my first call when I got paid.

Edited by Tonkers

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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