New Debate - Has the Debt Collection Industry, misinterpreted the law ?

[tbern123]

Ok, for the followers of my Cabot thread, you will know that I was told about this article today:

 

http://www.cabotfinancial.com/pdf/Increased%20Scrutiny%20of%20The%20Debt%20Sale%20Industry.pdf

 

Now Mr Maynard, states:

 

"In addition, Citizens Advice is currently pursuing a series of court

cases which challenge the right of debt purchasers to pursue a regulated debt through the courts. They argue that according to the definition of ‘creditor’ under section 189 of the Consumer Credit Act 1974, a purchaser must prove that he has acquired the duties as well as the rights to a consumer credit agreement before he can become the ‘creditor’ and therefore pursue the right to sue for the debt. This goes against the general industry belief that section 139 of the Law of Property Act 1925 applies in the case of debt purchase"

 

In their letters, Cabot have previously refered to the Law of Property Act 1925. I have never heard of it and I took their word for it and never questioned it.

 

That is until I found this excellent website:

 

Home - Statute Law Database

 

Now this is the Law of Property Act 1925 section 139

 

Law of Property Act 1925 (c.20) - Statute Law Database

 

It states:

 

Law of Property Act 1925 (c.20)

Main body

Part V Leases and Tenancies

139.

Effect of extinguishment of reversion.

— (1) Where a reversion expectant on a lease of land is surrendered or merged, the estate or interest which as against the lessee for the time being confers the next vested right to the land, shall be deemed the reversion for the purpose of preserving the same incidents and obligations as would have affected the original reversion had there been no surrender or merger thereof.

 

(2) This section applies to surrenders or mergers effected after the first day of October, eighteen hundred and forty-five.

Am I missing something here ? Can someone translate this into english for me and explain what this has to do with debt collection.

Comments please people !!

 

 

[MARTIN3030]

Ha Ha Ha.........this should be listed for a comedy award.....and who would believe is the author ??????

well none other than the top man from ............Cabot

 

suprise suprise........obviously getting very jittery because their days are numbered where they can walk all over its alleged debtors without a fightback.......funny how he is quick to mention the dodgers who are evasive yet makes no references to evasive collectors ????

And what of the increasing number of websites springing up......this is only the case because there are so many dodgy debt collectors who need to be taught their job description within the law.

 

He even has a go at the CAB .......maybe he thinks they dont know their job I am sure they know it when it comes down to justice for its clients.

 

And ohhhhh what a bad Easter present awaits his industry in April.....instead of chocolate ones they will end up with real egg...all over their faces.

He knows that the FOS will not allow them to get away with these dirty deeds so he worries about 450 quid ???

but surely if they behave above board they wont need to worry.......but the likes of Scotcall have already realised and are looking to get their money from other fields cant say I really blame em......

Maybe we should have a fundraising effort to help them out ???????

 

I wuld suggest everyone to read this story ....esecially if you are not feeling too good.......I have not read anything so funny for ages must have been written by the spitting image team.............they still have what it takes !!

 

Ps Mr.Maynards email addy appears within the article I think it might be a good idea to offer our condolances to him in view of this very sad news from April.

While you are at it ask him to explain the property act........properly !!!

[lookinforinfo]

TBern, I read that as meaning some thing along these lines. If a lease of

land is given back [or merged] to the original owner of the lease[ presumably

the freeholder in most cases], then the person who then buys that lease

from the freeholder, will acquire the same rights and obligations as the

previous leaseholder who surrendered it. In other words, the freeholder

cannot increase the rent or alter any of the clauses for example as the same

conditions that applied when the lease was begun, continue until the length

of the original lease expires.

 

I imagine therefore that that law relating to property now also applies to contracts inasmuch as a DCA buying a defaulted contract from a creditor inherits the same conditions [rate of interest, permissions etc] as the original

creditor.

But I could be well wrong

[MARTIN3030]

Lets hope you are.........although the CAB who are generally quite well informed and have all the stat books must think otherwise too.

 

As far as interest goes I think they are only entitled to collect 4.25% interest (used to be 4.75)

Also a fixed charge of around 80 quid per debt if I am not mistaken.

Lets not forget though that they buy these debts for a tiny fraction of their original status.

[payingonlyencouragesthem]

 

In their letters, Cabot have previously refered to the Law of Property Act 1925. I have never heard of it and I took their word for it and never questioned it.

 

That is until I found this excellent website:

 

Home - Statute Law Database

 

Now this is the Law of Property Act 1925 section 139

 

Law of Property Act 1925 (c.20) - Statute Law Database

 

It states:

 

Law of Property Act 1925 (c.20)

Main body

Part V Leases and Tenancies

 

139.

Effect of extinguishment of reversion.

— (1) Where a reversion expectant on a lease of land is surrendered or merged, the estate or interest which as against the lessee for the time being confers the next vested right to the land, shall be deemed the reversion for the purpose of preserving the same incidents and obligations as would have affected the original reversion had there been no surrender or merger thereof.

 

(2) This section applies to surrenders or mergers effected after the first day of October, eighteen hundred and forty-five.

 

Am I missing something here ? Can someone translate this into english for me and explain what this has to do with debt collection.

 

Comments please people !!

 

 

 

Tbern this act explicitly refers to land. We must be missing a precedent or two here if they are right. Unless a higher court has ruled that the same underlying principles apply to financial instruments there's no way this piece of gobbledygook could directly empower Cabot. If there is no linking precedent then they are just bullsh*tting. Any other opinions?

[diabolical]

I presume that where "139" is in that pdf it is a misprint and should read "136", i.e. section 136:

 

Law of Property Act 1925 (c.20) - Statute Law Database

 

Discovered the section 136 bit on:

 

THE END OF OVERDRAFT FUNDING - Langleys Solicitors - Langleys Solicitors, York, Lincoln, Insurance Law and Legal Advice

[tbern123]

TBern, I read that as meaning some thing along these lines. If a lease of

land is given back [or merged] to the original owner of the lease[ presumably

the freeholder in most cases], then the person who then buys that lease

from the freeholder, will acquire the same rights and obligations as the

previous leaseholder who surrendered it. In other words, the freeholder

cannot increase the rent or alter any of the clauses for example as the same

conditions that applied when the lease was begun, continue until the length

of the original lease expires.

 

I imagine therefore that that law relating to property now also applies to contracts inasmuch as a DCA buying a defaulted contract from a creditor inherits the same conditions [rate of interest, permissions etc] as the original

creditor.

But I could be well wrong

 

This is where I get confused, as part of their defence, they have asked me to prove that they are the creditor. I would take this to mean that they are saying they are not the creditor. If this is the case then why should anyone pay them any money ?

[tbern123]

Ok, I have checked through the letters from Cabot and they say they do not have to produce a Deed of Assignment because of Section 25 of the Law of Property Act 1925

 

However,

 

Law of Property Act 1925 (c.20) - Statute Law Database

 

States section 25

 

S. 25 repealed (1.1.1997) by 1996 c. 47, s. 25(2), Sch.4 (with ss. 24(2), 25(4)); S.I. 1996/2974, art. 2

 

Boy, this is going to make me sound like an idiot.... Can someone tell me what that means ? As repealed means revoked, I presume the rest means it was replaced by other legislation. So does this mean Cabot are quoting the wrong legislation in their letters ???

[demon_x_slash]

What annoyed me in particular was this from the Cabot .pdf:

 

While we welcome the developing

professionalism and expertise in all

sectors of the credit industry and wholly

support the need for transparency

within debt purchase, it is important to

recognise that there will always be

rogue customers looking for ways to

delay or avoid payment of debt.

The growth in the use of web sites

for disgruntled debtors to exchange

information, often not accurate in its

content, is an example of this.

[payingonlyencouragesthem]

So does this mean Cabot are quoting the wrong legislation in their letters ???

 

This is one of several interesting issues surrounding Cabot's business model. Their legal position, at least in CAB's view, is flawed. As 90% of defaulted debt in the UK is from "can't pays" rather than "won't pays" even if they were buying debt at 10p in the £ it's hard to see how they make a profit other than by creative accounting (eg up-valuing their debt portfolio).

 

Perhaps the most interesting question of all is how did a company with the financial capacity to buy £600m+ of distressed debt suddenly spring up from nowhere? The answer probably lies in finding out who made a killing on the management buyout.

 

Demon x slash what more would you expect from somebody stupid enough to buy out Cabot:grin: If my hunch is correct Mr Maynard could shortly become somebody's rogue customer himself.

[demon_x_slash]

Lol! It was just such a snotty little aside...

[iwannabedebtfree]

TBern 123 the SI relates to the trust of lands and appointment of trustees act 1996 ... Trusts of Land and Appointment of Trustees Act 1996 ....you are right in thinking that both the LPA 1925 and the TLATA 1996 do relate to property and land, and not consumer credit related matters. is this not another DCA trying to confuse situations by interpretting legislation in their own manner to scare debtors who are not aware of legislation?

[MARTIN3030]

This is one of several interesting issues surrounding Cabot's business model. Their legal position, at least in CAB's view, is flawed. As 90% of defaulted debt in the UK is from "can't pays" rather than "won't pays" even if they were buying debt at 10p in the £ it's hard to see how they make a profit other than by creative accounting (eg up-valuing their debt portfolio).

 

Perhaps the most interesting question of all is how did a company with the financial capacity to buy £600m+ of distressed debt suddenly spring up from nowhere? The answer probably lies in finding out who made a killing on the management buyout.

 

Demon x slash what more would you expect from somebody stupid enough to buy out Cabot:grin: If my hunch is correct Mr Maynard could shortly become somebody's rogue customer himself.

 

As well as his involvement with the debt buying and selling association he is also on the panel of The cca too.......talk about finger in pies.....all of course with EXTREMELY vested interests:x

[Turnaround]

Stumbled acroos this debate on Law of Property Act + CCA.

 

Not sure of the law - MoneySavingExpert.com Forums

 

Though it might help the legal beavers on here, and could be what Mr Maynard is refering to.

 

But I can't for the life of me find the Info to which the original poster refers

 

"Law of property Act 1925 (as amended 1989)

 

The Regulatory Reform (Execution of Deeds and Documents) Order 2005

 

 

A deed of assignment must contain at least the minimum information of:

 

1) name of original creditor

 

2) new owner

 

3) Amount of original debt & Amount sold for

 

4) Date of sale

 

5) signed by original creditor and signed by new owner."

[lookinforinfo]

I suspect that the section number is incorrect as Diabolical has already

stated and s.136 is the more likely culprit since it relates to the duty to

inform the debtor of the assignment of the lease.

Whereas s.139 [1] relates to the landlord and the subtenant enabling them to

enforce the sublease covenants following the surrender or merging of the

superior lease-I have since found out.

Whether by subsequent statute or interpretation perhaps by a Law Lord,

property has come to mean not just referring to land or a house but ones' belongings etc. as well. People look upon their money as their property

[ie belonging to them]

so it would seem a short step to regard a contract of a loan as comparable to a lease acquiring not dissimilar rights to that of what was originally in law

just a property lease.

[zootscoot]

It is s.136 LPA which is applicable:

 

136.

Legal assignments of things in action.

— (1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice—

(a)

the legal right to such debt or thing in action;

 

(b)

all legal and other remedies for the same; and

 

©

the power to give a good discharge for the same without the concurrence of the assignor:

 

Provided that, if the debtor, trustee or other person liable in respect of such debt or thing in action has notice—

 

(a)

that the assignment is disputed by the assignor or any person claiming under him; or

 

(b)

of any other opposing or conflicting claims to such debt or thing in action;he may, if he thinks fit, either call upon the persons making claim thereto to interplead concerning the same, or pay the debt or other thing in action into court under the provisions of the Trustee Act, 1925.

 

 

(2) This section does not affect the provisions of the Policies of Assurance Act, 1867.

 

(3) The county court has jurisdiction (including power to receive payment of money or securities into court) under the proviso to subsection (1) of this section where the amount or value of the debt or thing in action does not exceed £30,000

[Guest The Terminator]

Perhaps Mr M should look at this part of the LPA(1925)

 

171. Power for court to settle the beneficial interests of a lunatic or defective.- (1) The court may direct a settlement to be made of the property of a lunatic or defective, or any part thereof or any interest therein, on such trusts and subject to such powers and provisions as the court may deem expedient, and in particular may give such directions-

 

(a)

where the lunatic or defective is the holder of a title of honour, and the property would not devolve with such title either under a testamentary disposition executed by him, or on his intestacy if he died intestate; or

(b)

where the property has been acquired under a settlement, a will or an intestacy, or represents property so acquired; or

©

where by reason of any change in the law of intestacy or of any change in circumstances since the execution by the lunatic or defective of a testamentary disposition, or of any absence of information at the time of such execution, or on account of the former management of the property or the expenditure of money in improving or maintaining the same or for any other special reason the court is satisfied that any person might suffer an injustice if the property were allowed to devolve as undisposed of on the death intestate of the lunatic or defective or under any testamentary disposition executed by him

[elizabeth1]

OK - whoops!!! I'm not funny!!!

[tbern123]

Everyone knows I am not Cabot's biggest fan...

 

But for the sake of fairness, I think we should be careful about making this to personal against MR M

 

A little bit of banter is ok.... Just make sure no one says anything that they could use against you...

[Seahorse]

The "Rogue Customer" bit I find funny too. I know Cabot like to call their victims, customers. But as I customer, I enter into a contract willingly. I had no choice with Cabot, so the term hardly applies.

 

But if he thinks I'm a rogue??? Well, if the cap fits...

 

Seahorse