Darset v MBNA

[Darset]

MBNA's offer letter arrived this morning - the file's attached.

 

There are various things I note from it.

 

1. MD uses the term "Short Settle" without explaining this, implying that it's a common and familiar - or, at least, ordinarily recognised - term. However, the only common use of the term I can find is in paying for shares where it means settling the trade earlier than the required date.

 

I would earlier have assumed that it meant an agreed settlement made with an amount short of the total actually claimed and, further, that when that was accepted that would be taken to clear the debt. However brw suggests in this thread that it doesn't mean a clearing of the debt, saying that the difference remaining may be sold on and pursued.

 

I've done some web searching and find references to both complete writing off and selling on the remainder. If I were to do anything with this I'd certainly only do it on the basis of a full and final settlement specified by me in writing and with those clear terms agreed by MBNA. If brw is right - and I don't particularly doubt it - that won't be forthcoming.

 

2. It's really a pretty poor and confused letter. Although you can't see this it refers to only one account by number, the Abbey one, yet the figure given is MBNA's calculation of the total due on both accounts (and including penalties and interest from when I stopped paying, which I'd obviously dispute/discount anyway). In the second paragraph it says "your account" but then mentions both Abbey and MBNA when asking for interim payment.

 

In the first paragraph it talks about registering a partial settlement but then adds that I shan't have to repay the debt and that MBNA will not pursue matters further. This implies, at least in common English, that the debt would be fully cleared, and that no default would be issued and that any residual balance wouldn't be sold on and duly pursued.

 

Lastly, Dawson refers to a 'payment plan' if full funds are not currently available. Again, the implication is that a reduced settlement figure could be agreed and paid over a period but that doesn't fit in with what he said when we talked, namely that either a discounted settlement could be agreed and duly made with a lump sum payment or else new terms for reduced payments over time could be agreed.

 

 

Clearly if anything is to be done following this - and I'm certainly not sure it's the best course - it all needs to be very clearly set out and agreed.

 

Any thoughts anyone?

MBNA-Short settlement offer 00.pdf

[the_shadow]

Any thoughts anyone?

 

If it wasnt for the multiple accounts referenced in it I'd say its a template letter to be honest. its just got that feel... then again perhaps its me:(

 

a short settlement is usually marked as a partially settled account with CRA's and I agree the inference of the letter is that you will not have to pay the remainder although to not put that in writing specifically is suspicious.

 

I concur with your own thought process, see if you can get clarification if youre happy with a partial settlement or a full and final if not!

 

PmW

[WelshMam2009]

I note that it says MBNA will not pursue the debt but no mention seems to be made of them not selling the debt on and then a DCA pursuing the debt.

[Darset]

Quite so - and I doubt the omission is accidental although it does conflict somewhat with the bit about not being pursued further.

[WelshMam2009]

Quite so - and I doubt the omission is accidental although it does conflict somewhat with the bit about not being pursued further.

 

Trouble is, if this did ever get to Court then a Judge would dissect the wording and draw his own conclusions. At the risk of repeating myself, the letter does not say that MBNA won't sell the debt on, nor does it say that no-one else will pursue the debt. From a contractual stance, I would be siding with MBNA (morally yourself of course Darset!!).

 

Does anyone know if you end up signing a contract for a partial settlement??

 

If so, it would be those terms and conditions that would be relevant as I imagine they would supercede any earlier correspondence, unless specifically incorporated.

[WelshMam2009]

Why not go back to them Darset and ask for those 2 points specifically in writing?

[Darset]

I take your point about the subsequent interpretation but I'd say that the first paragraph says three things:

 

a. it makes a 'short settlement' offer but fails to define the term clearly;

b. it states that, following payment, MBNA will register a 'partial settlement' with CRAs;

c. it states that 'will not have to repay the remaining balance' and that 'MBNA will not purse the matter further'.

 

b. isn't a problem because although it shows a reduced payment, and therefore might have a negative credit rating impact, it's an accurate reflection of the situation and shows that an agreement has been reached voluntarily with the lender.

 

No doubt in this context 'short settlement' is a weasel phrase, MBNA intending it to be thought that it's an agreed and complete settlement whereby they cut their losses whereas in reality it may mean something else entirely, including getting what they can before selling on a reduced debt. As I mentioned earlier, I can't find any agreed definition (other than in share trading, where it's different) and so I think a judge would look at common usage and reasonable interpretation and not necessarily go along with a peculiar MBNA or credit card company in general understanding. Jargon - and this is financial services jargon - can't necessarily be relied on for meaning except within the relevant closed group.

 

That leaves a. I'd argue that the assertion that I would not have to pay anything further is quite clear in meaning. You might say that 'to MBNA' is implied, thereby opening the way to a third party requiring payment, but I don't think it is. At the moment the alleged debt is due to MBNA and MBNA has said clearly that in the event of the offer being accepted and payment made then nothing further will be due; hence if MBNA sold on the debt knowing, as they clearly would, that a third party would pursue for settlement they'd be acting in bad faith and duly breaching the contract agreed for settlement. It's also arguable, I'd say, that selling a partially settled debt on is a form of MBNA pursuit (because they know what will happen) and that again is precluded by what they offer here.

 

Right now I'm looking through a fair bit of OFT guidance and once I've completed that I'll reply to MBNA with a counter proposal while taking their offer at face value. That should generate additional correspondence and things may become clearer during that. I'll post this as it's done. And thanks for your comments.

[Darset]

Here's the letter I've written to MBNA, giving chapter and verse of why they're in breach of the CCA 1974 and why they can't take enforcement action. I've also decided to make a counter offer of settlement and duly spelled out the terms. As it's only a third of what they'd offered and only 10% or so of the (incorrect) sum they actually claim I doubt they'll accept it but my view was that if it ever gets to court I can show that I've constantly sought to be reasonable. Equally, it might be accepted if they see their position as hopeless or it might provide a bargaining basis.

 

As suggested earlier I should go through the past decade or so of statements to see how much I've legitimately used and how much is excessive interest and the like but that takes more time than I can really spare, hence the offer.

 

The letter hasn't gone yet but I want to send it tomorrow so any comments or suggestions in the meantime would be much appreciated.

MBNA continuing 02.rtf

[citizenB]

I think you have covered everything. I think it would be very much in their interest to accept. I look forward to hearing what the outcome is. Good luck.

[AA99]

Subbing. MBNA linked my OH's 2 accounts together aswell! Your letter looks good. It's got to be worth a try! You're also lucky you can offer that much to settle - hope you're not going to pay it with a credit card:rolleyes:

[Darset]

Thanks, both, for the comments.

 

It's less wanting or even really being able easily to offer the amount I did but I thought any offer had better be reasonably realistic. I've been fortunate also in just having completed a great batch of work and so, assuming no problems, I should get a bit of cash in very shortly and so it seems sensible to try to get this sorted if I can.

[littlebert8]

Letter looks good to me. I think there is a typo in the penultimate paragraph though - "off" when I presume you meant "of".

 

Also, you ask for the accounts to be shown as settled in full at the CRA. I would go further here and spell out that you don't want any adverse payment history recorded at all. I'm not sure if you have checked your credit file recently, but I would assume they have recorded late payments even if they haven't yet defaulted the accounts.

 

If MBNA have any sense, they will bite your hand off.

[Darset]

Thanks Littlebert. And you're right about the typo.

 

Good idea about the credit reports. I got the latest ones a week to ten days ago. There's nothing directly negative recorded except in respect of, as you suggest, arrears payments there being status codes now of 1, 2, 3 and 4 and so I could certainly add a request for an adjustment there. Interesting, also, that one of the CRAs, but not the other two, shows that the accounts are in dispute and the information should not be relied on, something which MBNA must have added itself.

 

Interesting that both you and CitizenB suggest my offer is generous. As I mentioned earlier I wanted to make it realistic and I was rather concerned it might not be enough to tempt MBNA into a positive response.

[littlebert8]

I would say that anything you choose to offer them is generous. Given the strength of your position, I think they would be fools not to take your deal.

 

I certainly don't think you are a fool to offer it. As you say in your letter, this could drag on for months - its not an unreasonable amount to pay to bring the matter to a conclusion on your terms.

[citizenB]

If it gets them off your back, then go for it.

[the_shadow]

Only concern I would have darset is that my good mum always told me never to accept the first offer Might be different in f&f offers but who knows:confused:

 

So personally I would go in with a low offer and then up it after the refusal.

 

Its whatever gets closure for you and cuts the connection with the vile american bank MBNA (bank of america)

[Darset]

Thanks, everyone, for the recent input. I've tweaked the letter a bit to add more pressure - commenting in passing on a potential complaint to the ICO, for instance, and reiterating MBNA's cavalier approach to legal niceities - and particularly changed the final bit to reflect some advice from here. This now reads as follows:

 

" Because I can see this dragging on for months and because it’s in both our interests to bring the matter to a negotiated close I’m prepared, as a counter offer to yours, to make an ex gratia payment of £2,367.89, approximately 13.6% of the maximum amount which might have been due in mid-August 2008, as full and final settlement of any sum claimed to be due under the accounts cited. I make this offer without prejudice and on the understanding that, following payment, MBNA will not pursue the matter further in any way including, but not restricted to, passing the remainder of the alleged debt to any other company here or abroad for further action or attempts at collection and that, further, MBNA will advise the relevant credit reference agencies that the accounts are properly satisfied in full and will ensure that the entries there for both accounts which show payments in arrears are duly corrected to reflect the position that no arrears in fact occurred.

 

While time will not be of the essence of this agreement I am prepared to make payment to you in full within fifteen working days of your written agreement to the terms I offer above."

 

I've posted it in case the text is helpful to anyone else. Why the change from £2,500 to £2,367.89? Partly that was taking on board pmw's lower starting point suggestion but more because odd figures like that can be a little destabilising - as in, what the hell is that about? Are we missing something else? The point about time in the final paragraph is that if something happens outside my control and I can't immediately make payment I don't want them reneging on that account if they've already agreed to the terms.

 

Let's see what happens ...

[citizenB]

I think that looks much better Darset. I am keeping a close eye on this. Because if successful, MBNA will be receiving something similar from me

 

Thank you for the click.

Edited March 26, 2009 by citizenB

[Darset]

Thanks, cB.

 

Maybe I should have posted the whole thing in case it's of use to anyone so here it is, more or less as sent.

MBNA continuing 02 FINAL.rtf

[kb_ba1]

*subbing*

 

Watching with interest... I'm also considering offering them a FF settlement. Looking forward to seeing what they come back with.

[Windywoo]

I'm watching this with interest as I made a 10% F&F last December - haven't heard a word from them!!

[PrillaSXV]

Just read this entire thread, took a while but brilliant! Im in exactly the same situation and negotiating a settlement figure. MBNA called and asked me to pay 55% of the balance (which includes various charges made although in dispute) and i refused. I have written to them offering 15% of the total amount in question and noted that i would not be claiming any charges back prior to this. (leaves it open to be reclaimed afterwards I received a call asking for 20% and i refused, 15% or nothing. To be continued.

 

Make sure you 100% get "full and final settlement" "will not be sold on" and "will mark credit file s satisfied". When i had my first offer of 55% he used the wording Short Settlement on the phone, i asked if he meant full and final and he squirmed somewhat and eventually said yes full and final was what he meant. It was easy to tell he was lying! MBNA will say anything they like, written confirmation or nothing is the way to go.

 

Loved your written replies by the way.

Joe

[Darset]

Thanks for your comments, Joe - hope it works out well for you. I'll update things here when I hear anything from MBNA.

[Darset]

Had another call on Monday from Mark Dawson, most of it recorded. Basically he was pressing for the £200-odd minimum payments to avoid the account going into dispute in April at which point they'd withdraw their settlement offer. I said, well, I'd take that risk and anyway I was absolutely certain that MBNA was acting illegally and that there would be serious consequences if they persisted. Interestingly he referred in passing to a 70% discount - the figure he'd earlier offered was actually 60% so whether he was getting confused I don't know. He said he hadn't had my counter-offer letter so I read him bits on the phone and emailed it to him and things have gone strangely quiet now given the earlier drama of getting things sorted urgently.

 

Incidentally, if anyone does email MBNA be sure not to use your ordinary email address. I sent mine from MBNA@ and so can filter and block it any time but you can equally set up a temporary Hotmail, Gmail or anything similar, collect it with the rest of your mail in the usual way, and just junk it in due course.

[the_shadow]

Had another call on Monday from Mark Dawson, most of it recorded. Basically he was pressing for the £200-odd minimum payments to avoid the account going into dispute in April at which point they'd withdraw their settlement offer. I said, well, I'd take that risk and anyway I was absolutely certain that MBNA was acting illegally and that there would be serious consequences if they persisted. Interestingly he referred in passing to a 70% discount - the figure he'd earlier offered was actually 60% so whether he was getting confused I don't know. He said he hadn't had my counter-offer letter so I read him bits on the phone and emailed it to him and things have gone strangely quiet now given the earlier drama of getting things sorted urgently.

 

Incidentally, if anyone does email MBNA be sure not to use your ordinary email address. I sent mine from MBNA@ and so can filter and block it any time but you can equally set up a temporary Hotmail, Gmail or anything similar, collect it with the rest of your mail in the usual way, and just junk it in due course.

 

Good tip there Darset re: email address. If you want to throw a large size 10 spanner into the works when communicating with them next, you could ask if the account has been securitised. Doubt the person the other end would understand what this meant but it could further throw doubt their end:)