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Being Chased By A Cowboy Debt Collection Company

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Not sure of which forum to put this in, but would appreciate your feedback. I got a letter in the post this morning from "Property Debt Collection Limited", apparently acting for my leaseholders.

My lease of £30 I forgot to pay. They put a late payment fee on of £35.25, taking the total to £65.25. I got that letter about 5 weeks ago but forgot to pay it again.

The letter I got this morning from the debt collection agency is now demanding payment of £288.51, including their alleged costs of £146.88. They demand payment within 7 days, and if I do not comply, they will advice my mortgage lender of the areas. They are also threatening court action, etc.

Is this legal? How can a debt of £30 balloon to £288.51 in the space of a few weeks? I am familiar with business debt law but completely clueless when it comes to personal debt law.

Any ammunition you can give me for the letter back on Monday would be totally appreciated.

Thanks in advance.

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Cheers, Beenie. £30 to nearly £300 is quite a leap. If it is legal, I am clearly in the wrong business.

I'm no expert, but that sort of leap looks about the norm once the debt has gone to a debt collection agency and it wouldn't surprise me that the odd (non rounded up/down figure) of £146.88 for their costs is just under the legal threshold.

I think you're stuffed mate, but don't take my word for it.

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If there are penalty charges clearly laid out in the contract, then you are stuffed.

If not, pay the £30 immediately. they will have to PROVE the rest in court.

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If there are penalty charges clearly laid out in the contract, then you are stuffed.

If not, pay the £30 immediately. they will have to PROVE the rest in court.

what he says, pay the £30 for the lease now.

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what he says, pay the £30 for the lease now.

Agree. Pay it up. It's the equivalent of a visit to Tesco for a few supplies. Why waste time fighting it? However, Escalating a £30 debt to 5 times that amount is ludicrous and any sensible court should throw it out, but I fear they might not.

VP

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Is there any truth in the notion that stating the £30 is in 'full and final settlement of the debt' protects you against further claims, if they accept the £30?

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Not sure of which forum to put this in, but would appreciate your feedback. I got a letter in the post this morning from "Property Debt Collection Limited", apparently acting for my leaseholders.

My lease of £30 I forgot to pay. They put a late payment fee on of £35.25, taking the total to £65.25. I got that letter about 5 weeks ago but forgot to pay it again.

The letter I got this morning from the debt collection agency is now demanding payment of £288.51, including their alleged costs of £146.88. They demand payment within 7 days, and if I do not comply, they will advice my mortgage lender of the areas. They are also threatening court action, etc.

Is this legal? How can a debt of £30 balloon to £288.51 in the space of a few weeks? I am familiar with business debt law but completely clueless when it comes to personal debt law.

Any ammunition you can give me for the letter back on Monday would be totally appreciated.

Thanks in advance.

Was the letter signed for? If so, they cannot prove they sent you the bill in the first place. The mail loses enough post for this to be an issue, and sending important letters by registered post like that should be a no-brainer, especially with the level of charges they ask for. They will need to prove they didn't sent you the increased bill deliberately without giving you a real chance to pay the outstanding monies, in order to grossly inflate their own profit.

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Is there any truth in the notion that stating the £30 is in 'full and final settlement of the debt' protects you against further claims, if they accept the £30?

No - it is not possible to impose a contractual term on the other party without their explicit agreement. If such a letter accompanied a £30 cheque, they could either cash it and not reply or send a reply saying "thanks for the payment which we accepted without prejudice to our remaining debt of xyz which the knuckle draggers are coming to your front door to collect soon....".

If you were correct, folks would simply fill up their car petrol tanks with £80 of fuel then present the cashier with a letter stating "this is full and final settlement of my debt to Shell bla bla" and payment of £5. If only...

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Is there any truth in the notion that stating the £30 is in 'full and final settlement of the debt' protects you against further claims, if they accept the £30?

They can accept and cash the £30, as long as they write back and tell you they have accepted the £30, but not in full and final settlement, but as a part payment.

The additional charges, unless they are in the contract, are in fact a new claim, and would need to be proved reasonable in a court. Most solicitors will do a debt collection series of letters for about £25.00+VAT, so this would be a reasonable cost in my view.

As with all contracts though, a breach by one party should not result in the other party gaining more or profiting from the breach, unless penalties are included in the original contract.

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If there are penalty charges clearly laid out in the contract, then you are stuffed.

If not, pay the £30 immediately. they will have to PROVE the rest in court.

Contractual penalties are unlawful, and therefore unenforcible, in English (and Scottish) law. Any payment resulting from one party's breech of contract can only be in respect of the actual loss suffered by the other party due to the breech or a genuine pre-estimate of such loss.

The original poster said it was described as a "late payment fee" which sounds like flowery language to hide the fact that it's actually a penalty.

Edited by 6538

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Thanks for all the feedback so far, folks.

The thing that puzzles me most is how the arrive at the figure of £288.51. If £146.88 is their charge for sending the letter, the difference is £141.63. £141.63 is obviously not £65.25, which the charge was after the late payment fee.

So what does the remaining difference of £76.38 cover?

I've paid it much later on in previous years, but they've never passed it onto this dodgy outfit.

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To add, some of the wording on the "demand" is a little strange. I am familiar with legalese to a degree, but never seen things like these before.

On the settlement page, the wording is "Please accept this letter as my admission that the sum of £(left blank) is due and payable to Property Debt Collections Limited".

"Admission"? Very strange that the letter says I have to "admit" something rather than the fact that I am "legally obliged" to pay it.

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Is there any truth in the notion that stating the £30 is in 'full and final settlement of the debt' protects you against further claims, if they accept the £30?

No, even if the other party explicity agrees to a lesser amount in "full and final settlement" he is still not barred from suing for the balance. A lesser amount of money alone can never satisfy a debt.

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Thanks for all the feedback so far, folks.

The thing that puzzles me most is how the arrive at the figure of £288.51. If £146.88 is their charge for sending the letter, the difference is £141.63. £141.63 is obviously not £65.25, which the charge was after the late payment fee.

So what does the remaining difference of £76.38 cover?

I've paid it much later on in previous years, but they've never passed it onto this dodgy outfit.

£76.38 is the anticipated cost of the private medical treatment to apply ointment and sticking plasters to the fists of the debt collection company "bailiffs" who will shortly visit you for a little gentle persuasion

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Contractual penalties are unlawful, and therefore unenforcible, in English (and Scottish) law. Any payment resulting from one party's breech of contract can only be in respect of the actual loss suffered by the other party due to the breech or a genuine pre-estimate of such loss.

The original poster said it was described as a "late payment fee" which sounds like flowery language to hide the fact that it's actually a penalty.

Thats interesting. Clearly doesnt apply to banks taking interest on interest.

If a charge is detailed in a contract, youd be hard pressed to get out of it. If its in the contract, it is a condition to which both parties have agreed.

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Dont write to the debt collectors for a start, speak the people who you were meant to pay £30 to and tell them you are meant to pay towards your lease but havent heard anything from them, then pay the £30. Try and put the blame on them without being to forceful.

What ever happens dont contact the debt collectors, they record the conversation and try to hoax you into it.

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£76.38 is the anticipated cost of the private medical treatment to apply ointment and sticking plasters to the fists of the debt collection company "bailiffs" who will shortly visit you for a little gentle persuasion

:lol:

I hope they knock on my door so loudly that they make a spectacle of me in front of the neighbours.

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Dont write to the debt collectors for a start, speak the people who you were meant to pay £30 to and tell them you are meant to pay towards your lease but havent heard anything from them, then pay the £30. Try and put the blame on them without being to forceful.

What ever happens dont contact the debt collectors, they record the conversation and try to hoax you into it.

Good advice.

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To add, some of the wording on the "demand" is a little strange. I am familiar with legalese to a degree, but never seen things like these before.

On the settlement page, the wording is "Please accept this letter as my admission that the sum of £(left blank) is due and payable to Property Debt Collections Limited".

"Admission"? Very strange that the letter says I have to "admit" something rather than the fact that I am "legally obliged" to pay it.

What they are doing is asking you whether you actually agree with the amount they claim is owed. It's to find out if you aren't paying because you can't or because you don't agree with the amount.

If you agree with the amount but can't afford it they should seek to arrange a payment plan with you.

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It would seem to me that there are two elements to their claim

1) Damages in compensation resultant from the breech

2) Costs incurred in remedying the breech

Item 1 would depend on the contract, are there any clauses that specify the consequences of the breech? Even if there are not, if they can show they have suffered loss due to the breech they may claim on these grounds. I would suggest that they are unlikely to argue that the late payment of £30 has damaged them, they are a debt collection agency and would not have suffered any damage, that would be up to the counter party to claim,

So what they are claiming is costs and you can challenge them on this. Sending out a standard form letter is unlikely to have cost them what they claim. Even as a commercial business they would only be able to justify a small sum for this activity. If they had engaged a solicitor to perform this activity the justifiable sum would be higher than for an office clerk.

It is illegal for them to issue any fines, unless stated in the contract. The power to impose fines is vested in the court and they look very unfavorably in anyone that tries to take that power to themselves.

I would pay them the £30 you owe and offer a sum that you feel fairly reflects their costs, be generous with this offer. The idea is if they take you to court, and the judge agrees that your offer was fair they will lose, you will claim your legal fees off them. If they win their legal fees will cost you. It is probable that the case will be heard in small claims court anyhow and you can represent yourself.

I have had run ins with debt collection people before. The idea is to frighten you into paying not to bring a legal case.

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.

I have had run ins with debt collection people before. The idea is to frighten you into paying not to bring a legal case.

what he says, debt collectors hope that you dont know the law, and as he says frighten you into paying with letter about courts etc.. for one thing they have to prove you owe the money ie a signiture if there isnt one then there is nothing you can do, most of the time you can settle with the company you owe the money too.

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Thats interesting. Clearly doesnt apply to banks taking interest on interest.

If a charge is detailed in a contract, youd be hard pressed to get out of it. If its in the contract, it is a condition to which both parties have agreed.

Depends what the charge is for. If it's for the provision of a service or product that is its self described in the contract then that's fair enough.

If the charge is only payable upon a breech of contract by one party then it is only enforcible at law if the amount matches exactly the loss of the other party or is a genuine pre-estimate of his losses. The person seeking to rely on the latter would need to show that the pre-estimate was reasonable.

You can put lots of things in contracts but merely doing so dosen't automatically make them enforcible. This is why contract lawyers earn huge sums.

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