If you get a letter saying that Big Bank has sold your debt to Snake & Weasel Debt Collectors you may be very worried.
This article answers questions about what has happened and how it will affect you. Will the debt collection agency (DCA) be horrible to deal with? Is it legal to do this? Do you still have to pay the money? What about your credit record? What if you don’t owe the money/
Has your debt really been sold?
Sometimes a lender will appoint a debt collector to try to collect the money for them. This isn’t a “sale” – you still owe the money to the original lender and none of the rest of this article is relevant.
If you aren’t sure what has happened, the best thing is to contact the original creditor and ask them if your debt has been sold or not. If you are worried and don’t want to talk to the creditor, phone National Debtline for advice about the letter.
Is this legal? Why wasn’t I asked?
When a sale happens, everything about your debt – all the terms and conditions – remains the same, except that you now owe the money to the debt collector who has bought the debt, not the original creditor.
You won’t be asked to agree to the sale and you can’t object or stop the sale.
You agree to the original terms when you borrowed the money or opened the account. In the small print there will have been a clause that said that the lender can “assign his rights” to a third-party. This is the legal term for a “sale”
(There is one exception here. If your lender subscribes to the Standards of Lending Practice and if they had previously been shown evidence that you have mental health problems, your debt should not have been sold. Go to your local Citizens Advice if you would like help with this situation.)
Your debt can be sold if you are in debt management or you have an arrangement to pay. It may not feel fair if the lender accepted your monthly offer and you are making the payments as agreed, but legally the lender can still sell the debt.
How much was my debt sold for?
That will depend on the state of your account. A debt where you have paid token payments or nothing for a long while may have been sold for very little, just a penny or two in the pound. If you are making regular payments then it will have been sold for more.
You won’t be told what your account was sold for. The sale is a commercial agreement between the seller and the buyer. This may seem annoying, non-transparent or unethical, but the debt collector and the original lender are not doing anything wrong by not telling you the sale price.
The price the debt collector paid for your debt is irrelevant to you. It doesn’t affect the amount that you now owe – you still owe the full amount but now to the debt collector.
If the lender has been paid, why do I owe anything?
The original lender has had the debt settled by the DCA. But you now owe the money to the DCA instead.
Think of this example. You borrow £200 from your sister for some car repairs, agreeing to pay her back £50 a month. But she suddenly needs all the money immediately, so your dad gives your sister the £200 and you repay your dad instead. Same debt, same repayments. You borrowed from your sister but now you don’t owe her anything but you do need to repay your dad.
This is pretty much what has happened with your debt being sold. Your debt stays exactly the same, you just owe it to a different person.
(NB The above example isn’t an attempt to explain the legal contractual obligations – it is an analogy illustrating why you now have to repay someone else. See “Is this legal? Why wasn’t I asked?” above, for the legal points.)
I want to carry on paying the original lender
You can’t do this. You don’t owe any money to the original lender anymore.
Will the debt collector be difficult?
You may find that debt collectors are as easy to deal with as the original lender. Indeed they may be more likely to freeze interest or accept a full and final settlement offer!
If you had a payment arrangement with the original lender, for example in a debt management plan, you just need to offer the same amount to the debt collector.
There are regulations to make sure that consumer credit debt collectors behave fairly. All debt collectors handling credit card and loan debts have to be regulated by the Financial Conduct Authority and if you have problems with one, the Financial Ombudsman will look at your complaint.
Unless you ignore the debt collector, it’s unlikely that you will get phone calls at work.
But I now have two defaults on my credit file!
Debts are usually already defaulted before they are sold. When it is sold the original creditor will mark the debt as settled with a zero balance owing and the debt collector will add the debt with the same default date that the original creditor used.
So now there are now two debts with defaults on your credit record which looks bad.
But the total of all your debts is right – the debt isn’t being double counted because one of these says that there is zero owing. And when your credit rating is calculated, the original debt is ignored, so your credit score will not get worse because you now seem to have two defaults.
If the debt collector adds a default date which is later than the original creditor, this is wrong. What should the Default Date for a debt be? explains how you can get it changed.
Can the debt collector take me to court?
Yes. The debt collector now has all the rights that the original lender had and this includes applying for a County Court Judgment (CCJ).
You don’t have to worry that this is going to happen straight away. The debt collector would rather reach an agreement with you for monthly payments and not have the cost and bother of going to court.
But in 2019 there were more than 100,000 CCJs every month. Half of these CCJS were for less than £650 – it seems that debt collectors are going to court more often and for smaller debts. So don’t ignore debts or you may get a CCJ.
Has this reset the 6 year period for becoming statute-barred?
No. If the debt isn’t yet statute-barred, the 6 year period carries on, it doesn’t start again after the sale.
But read Statute Barred Debt – Common Questions because statute barring is now more complicated by a recent court ruling in January 2019.
A debt that is already statute-barred will continue to be so after the sale.
The letter doesn’t say what the debt is!
If you get a letter that might be about a debt but it doesn’t give any details at all, it is just asking you to call them, then this is a “fishing expedition”. They don’t really know who the debt belongs to and they are hoping someone will give them their details (date of birth, previous addresses) that will match.
You can usually ignore these vague letters – see Prime Location Services – do I have to call them? for an example.
But I don’t owe this money
If the letter mentions a debt which you do not owe – perhaps because you never borrowed from that lender or because you have already repaid it – then don’t ignore the letters but reply telling the debt collector to Prove It!.
You may need to be persistent. It is the debt collector’s job to show you are the borrower. You don’t have to prove you aren’t.
I am in a DMP, what should I do?
If you have a debt management plan run by a company, tell the DMP company. They will switch your monthly payment to go to the debt collector.
If you are running your own DMP, you need to cancel any standing order paying the original lender, offer to pay the same amount to the DCA and ask for their payment details. They may ask you to provide a new Statement of Affairs.
If you have been ignoring this debt, this is a good point to review your whole situation and your possible debt solutions.
A simple overview of your debt options
Threats of court – are debt collectors bluffing?
Ask for the CCA agreement for old debts
Lisa says
Hello,
I have just checked my credit file and seen that Lantern Debt Recovery have added 2 defaults to my file, one as of 1st Oct 2020, and another which will appear on my file at the next report update next month – I have no idea what these debts/defaults are and have not had any contact from Lantern about these debts either??? – I am not sure what the best course of action is? The default that is currently on my profile says that the loan was from Aug 2017 and the one that is pending does not have any information provided at all. I googled Lantern Debt recovery and have seen loads of forums with really negative feedback and experiences, so need to some advice before dealing with them directly – help!
Weatherman says
Hi Lisa
You need to know what these debts are for before you can work out exactly what to do next. So I would contact Lantern and ask who they believe the debts were originally with, how much they believe you owe, and when they believe you took the debt out. If you frame it as ‘what they believe’, it shouldn’t reset the statute-bar clock, as you’re not *acknowledging* that you owe the debt. (More on statute-barring here: https://debtcamel.co.uk/statute-barred-debt/)
If they’re not debts you think you owe, you can challenge the original lenders (but tell Lantern that’s what you’re doing if so).
If they are old debts, Lantern might have put a more recent default on. You can ask the original lender to put an appropriate default on your report (which is usually after you’ve paid reduced payments, or missed payments, for 3-6 months) – Lantern might put their own default on as well, but it should be for the same date as the original creditor’s default.
I don’t know about Lantern specifically, but I wouldn’t read *too* much into the negative online reviews. Even when they do everything right, no-one likes a debt collector!
Billy Unknown says
Hi, Lantern contacted me a few months ago and also claimed i owed them money. After issuing a Subject Access Request it turned out they had the wrong person with the same name. By which point they had already left a default payment on my credit history. I have written to them many times, emails and phone calls and still waiting for them to rectify. As i was disgusted with how the company pursued the debt against the wrong person i took the following actions;
1) Requested Evidence
2) Subject Access Request
3) Regular letters following this
4) Regular calls
5) Regular emails
6) Contacted the CEO
7) Contacted the FCA
8) Contacted the ICO
9) Contacted the Financial Ombudsman
Time will tell if it will be fully resolved.
Lantern acted inappropriately with my information, they didn’t do any evaluation before adding a default to credit history, they have failed to rectify the issue in a timely manner. Very unprofessional and the customer service team is extremely unhelpful.
Personally i also contacted my credit agencies and they were very unhelpful too. I found the only course of action was to investigate with Lantern directly.
Kind regards
Weatherman says
Fair enough, and sorry you had such a bad experience. The Financial Ombudsman Service should be able to put this right for you and give Lantern a bit of a shoeing.
Good luck with the complaint.
bmk says
Hi I’ve been looking to make a complaint to very, my debts with them is now with Lowel. I cant find any email to complain to everything has all bounced back, Has anyone managed do to this be email ? thanks in advance .
Sara (Debt Camel) says
For affordability complaints against Very, see https://debtcamel.co.uk/refunds-catalogue-credit-card/
Manny says
Hi, i had a debt with PayPal Credit but i forgot/didn’t realise they had sold it on to Moorcroft. In September I had a little extra money and decided to pay off the final £140 to clear that one (i still have multiple other debts). I paid via debit card to PayPal directly. I informed my debt management company (StepChange) of this. I receive a notification from StepChange out of the blue on Friday saying i have a new creditor on my plan – it’s Moorcroft for £245 (which is what it was outstanding in July or August – but when i paid PayPal – the next month’s had been taken – so around 140 was officially left – which i chose to pay off in one final lump sum) . Will i have to pay the £245 to Moorcroft – even though i’d paid off the debt to PayPal?
Sara (Debt Camel) says
No, but tell StepChange and they should sort this out for you.
Matthew says
I had a debt with myjar, which was later sold to lantern. I have two defaults listed on my credit file.
I have recently lodged a complaint with myjar administrators because I don’t believe that the myjar loans were affordable. I would regularly roll over and reborrow.
Lantern have been writing to me but I haven’t contacted them back. I’m worried that they’ll take me to court and I’ll get a CCJ.
Should I set up a repayment plan with lantern or is it possible to ask them to put a halt on debt collection until the dispute with myjar is resolved?
Also, when myjar administrators fully fold up the business, I’m assuming that the default will be removed from my credit file, as it was with Wonga. What would then happen with the Lantern default on my file?
Thank you so much!
Matthew
Sara (Debt Camel) says
I’m worried that they’ll take me to court and I’ll get a CCJ.
Lantern may do that.
Setting up a payment plan may be a good idea. What are the rest of your finances like?
I’m assuming that the default will be removed from my credit file, as it was with Wonga.
Yes if the administrators uphold your claim
What would then happen with the Lantern default on my file?
You can ask them to remove the default. But what is the default date?
Matthew says
Thank you so much for that.
My finances are stretched because I’m self employed (and well…. Corona), but I’m up to date with all bills and credit accounts for the last 24 months. I could afford to make nominal monthly payments or perhaps even agree a settlement figure with them of a few hundred pounds (if they were willing to remove the default). I’m just worried that I’ll be paying money that I’d no longer owe if my complaint is upheld (strong feeling that it will be).
The default date for myjar is listed as 13th Feb 2019 and the default for Motormile is listed as 14th Jan 2019 – which does seem a little strange.
Sara (Debt Camel) says
ok so recent – you really want that gone. If the default was in 2015 it would be dropping off this year anyway.
Matthew says
I do! and I DEFINITELY don’t want a CCJ. Do you think perhaps I should agree a settlement figure with motormile on the proviso that they remove the default, then bide my time until the MyJar administrators hopefully find in my favour and remove that default also?
Sara (Debt Camel) says
Lantern/Motormile probably won’t agree to a settlement like that. But you don’t need them to reemove the default. If you can just get a settlement agreed, then if Myjar uphold your complaint for that last defaulted loan, Lantern should remove the default.
Rachel says
Sarah, I had a debt with payday express that was sold to PRA group. I’ve only just noticed this is being reported as a missed payment every month on my credit report. PRA can’t produce the CCA. I’m due to get a settlement from ICL as I made a successful claim. I want this off my credit record and worried the missed payment will show for years. I can’t ask the original company to add a default as they closed down. I’ve no idea what to do. I get the impression from ICL that the debt info will be removed from my credit file but they said as its gone to a debt company they can’t help
Sara (Debt Camel) says
Do you know when you defaulted on the loan? When it was sold to PRA?
If ICL uphold your claim, you can ask PRA to remove all negative information on the date.
Rachel says
Hi Sarah I defaulted in September 2015. The debt was sold to PRA in 2017
Sara (Debt Camel) says
Did the ICL loan show an any of the credit reference agencies – Experian, Equifax or TransUnion? If it did, has it been removed?
Rebecca says
Hi.
I had a debt with jacamo mid 2019, who then sold it to DMPay. There is now a default on my credit file, however, I have made payments from the beginning with DMPay.
I have been trying to seek clarity on who actually owns the default, as neither party are taking ownership.
Is there a way to find out?
Mainly seeking an answer as I’m wanting to settle the debt and hopefully remove the default as a good will gesture as I’ve seen people have done that.
Also, since the beginning of the default I have paid every month, but it is still been marked red and no payment every month which I’m unsure about?
Any advice would be extremely appreciated :)
Weatherman says
Hi Rebecca
The default could have been entered by either Jacamo or DMPay, or even one of each (although they should use the same date). What does the credit report itself say?
If you settle the debt with DMPay, who now own the debt, but Jacamo’s default is still on your file, you can also ask Jacamo to remove the default, although they might not.
As for the ‘no payment’ issue, again it depends on whose default it is. If Jacamo have sold the debt they should have updated the file to say so, and that there is now zero owing to them. You can ask them to do that if they haven’t.
If the debt is listed as owing to DMPay, contact them and ask them to update your payment status.
I hope that helps!
Rebecca says
Thanks for your reply weatherman!
That’s the issue I seem to be having though. On my credit file it states the default is DMPay Ltd, but when I have discussed the matter with them they say it is Jacamo who issued the default so it is not their responsibility. So, then I’ve gotten in touch with Jacamo, and they said the issue is DMPay as they have bought the debt.
I can’t seem to get a straight answer.
On my credit file its marked as missed payments every month even though I am paying also. Is that how it works as it’s a default even though I have a payment plan with them?? DMPay have said that’s how it works, but I don’t understand how it’s showing the total balance going down every month but marking the payments as not paid?
Thanks.
Sara (Debt Camel) says
If Jacomo added a default is them you have to complain to if you think its wrong. DMPay are just using the default Jacomo did.
If Jacomo remove it or change the date, DMPay will have to do the same.
Yes you will often end up with a default if you are making low payments. it may seem unfair but that’s how it works.
It is rare that a creditor will remove a default if you settle the debt. In fact it’s against the credit reporting rules. I won’t say it never happens but it shouldn’t.
you have to settle with DMPay as they own the debt.
Rebecca says
Thanks for clearing that up Sarah makes sense now. :)
I’m paying £50 monthly for £1200 debt didn’t think that was low, but what do I know about how it works.
I had read a fair few times that people were paying off there outstanding amounts and then they would remove the default as a good will gesture, I didn’t know it was against any rules :$
Sara (Debt Camel) says
you can try, I’m just saying it often won’t work.
lynne says
I am currently going through my three credit reports to see if they all match up.
Most/all of my defaults will have gone later this year.
However, I have identified a few from Lowell and from Intrum (all with low balances), which were bought from the original creditor in 2014/2015 and are marked on my file as being either in a “special arrangement” or “active”.I notice that a default date is not showing although I ceased to make full payments many years ago and have been making small payments all this time.
The debts to the original creditor have now fallen off my file but remain from these debt collectors for the same accounts.
My question is how do I get rid of these ?
Sara (Debt Camel) says
Ask the original creditor to add a default date on or before the date they sold debt. See https://debtcamel.co.uk/debt-default-date/
lynne says
I have now emailed the original creditors (J D Williams companies) to ask for a date of default to be added near to when I stopped making full payments.However I have read above that they may try to pass responsibility back and forth to the debt collectors and vice versa.
Should that be the case what options do I have in having this added?
Sara (Debt Camel) says
tell them it is their responsibility and you will send a complaint to the Ombudsman if they don’t agree. Do not waste time talking to the debt collector.
lynne says
Thanks Sarah.
Robert says
Hi.
I just got reply from Everyday Loans that they mis sold me two loans couple of years ago and they will refund me the interest I payed. As I was unable to repay those loans they sold them to Lowell and Lowell charging me massive interest. My question is that if Everyday Loans mis sold me those loans what can I do now to minimise paying to Lowell?
Thank you.
Sara (Debt Camel) says
Tell Everyday Loans that you want the payments you have made to Lowell taken into account and the default removed from your credit records with Everyday Loans and with Lowell.
Robert says
Hi.
Thanks for quick reply.
This mean I will still have to pay to Lowell even the loans has been mis sold to me by Everyday Loans?
Sara (Debt Camel) says
It is up to EL how they handle this. They will either arrange for the balance with Lowell to be reduced to what it should be without interest. Or they will buy the loan back from Lowell so you have to repay the balance to EL.
If you know the numbers I can help say how much you should owe?
Loan 1 – what did you borrow? how much did you pay EL eg 15 payments of £157.
Loan 2 – what did you borrow? If this loan settled loan 1, how much did you get in cash? how much have you paid EL for this loan? How much have you paid Lowell?
Robert says
“I have found evidence to suggest that some affordability checks were not completed when both loans were approved.
Loan 1: You took this loan in November 2014. The loan amount was £1,740. As this loan has been found to be unaffordable to you, we would require you to pay back the amount you had use of with no interest. By the time this account was settled you had paid a total of £1,274.14 on this account leaving an outstanding balance of £465.86 for the amount borrowed to be repaid in full. This amount will be deducted from the overpayment made on loan 2.
Loan 2: You took this loan in July 2015. The loan amount was £2,477.85 of which £977.85 was used to settle your previous loan and £1,500 which you had full use of. As this loan has been found to be unaffordable to you, we would require you to pay back the amount you had use of with no interest. By the time this account was sold to Lowell you had paid a total of £834.30. Lowell have confirmed that since they have been collecting this account you have paid them a total of £1,250. You have therefore paid a total of £2,084.30 to date on this account. You have therefore paid £584.30 more than the amount you had use of.” This is reply from EL. And just to give you head up that my starting balance on Lowell account was around 3500 pound! Thank you for your help.
Ash says
In January 2005, I had a debt of £8800 with Barclaycard. I lost my job and had a very difficult time financially. I left the UK and went back to my native land. I was never in touch with Barclaycard. In 2018, I came back to UK to start on a fresh slate. I check my credit file and the debt was time barred and my credit file was fine. I bought a house where I now live and managed to get a job, just about to make ends meet.
Today, Intrum ( debt collector) wrote to my new address, stating that they have bought my debt off Barclaycard on 1 Feb 2006. They asked me to consider paying 25% of the £8800 by this month (28 Feb 2021), and they will write off the balance. or pay £7000 in March 2021 and they will write off the balance of £1800.
They made me aware that the period for them recovering my debt has expired, so they will not be issuing Court Proceedings to enforce payment. But that the debt still exists and legally they are within their means to continue to ask me to make repayment. Currently I have chosen to ignore their letter. I already have credit card payments, which I opened again with Barclaycard/American Express outstanding by £18000, which I am paying each month and I am not in a position to pay a dent dating 2005.
Please advise if I can ignore the letter, given that Intrum (Debt Collector) is saying that they cannot enforce debt in Court. Any implications?
Weatherman says
Hi Ash
You don’t need to do anything with this debt. The main reasons you might are for peace of mind/to stop Intrum occasionally contacting you, or because a mortgage lender will sometimes ask if you have *any* outstanding debts (and you have to tell them, even if they’re not your credit report).
Are you handling the ongoing payments on your current credit card alright?
Sara (Debt Camel) says
Just tell Intrum that you won’t be paying them anything. They aren’t going to go to court. No one will come to your house.
If you are clear, then they will give up after a while.
Rob says
Good Morning all,
A little technical question about defaults and credit reports – as I couldn’t find an exact answer in the FAQ’s.
I had a catalogue account a number of years ago – 2011ish which went into default in 2015. The debt was sold to a debt company whom I have been paying back by direct debit every month since.
-The debt company updates the account status every month and reports the account in default.
Will this default mark be removed from my credit file in 2021 as that’s 6 years from when I first defaulted with the catalogue or will it remain until I have repaid the debt to the debt collector as they still update every month.
Thanks
Sara (Debt Camel) says
it will go 6 years after the default date.
How much do you still owe?
Sarah says
Hi I got a letter from BW legal regarding a bill for talk talk for £177. The letter states that if not paid county court action will commence on 28th March. I have emailed asking for the original credit agreement as proof. This morning they have emailed stating I electronically signed it and the contract is binding but they have requested the relevant documents from talk talk. My question is what do I do know? Do I rely to the message? Do I wait for the credit agreement? I’m worried if I don’t do anything they will still take me to court. Thanks in advance
Sara (Debt Camel) says
Have you had a letter headed something like Letter Before Claim or Letter Before Action? With several attachments including one headed Reply Form?
Also what sort of debt was this?
Sarah says
Hi thanks for your reply,
The letter I got had a financial statement included and it stated court action can be avoided if I either pay in full or instalments. It is for a utility bill.
Sara (Debt Camel) says
ok, if this is for a utility bill it is unlikely that is a CCA agreement at all, so they don’t have to produce one. I suggest you talk to National Debtline on 0808 808 4000 about what your options are.
Sarah Fallon says
Thanks Sara I’ll get in touch with them
Tracy says
Hi, My son had a parking fine that was not paid and BW legal sent him letters chasing this, due to his mental illness at the time he did not try to fight this and offered and they agreed to a payment plan of £1.00 per month. As he has been paying this for over 12 months now and the debt will not be fully paid till 2032 is there anything that we can do to get this written off without having to pay the outstanding balance in full?
He was also hounded by Gladstone Solicitors and has to pay them £10.00 a month. there was a lot of emails at the time and I did try offering both a reduced settlement figure due to his health and that it was a gift from me but they both refused and to be honest were not very nice to deal with so we accepted the payment plan just to get them off my sons back.
Thank you
Sara (Debt Camel) says
is this payment to Gladstone solicitors for the same debt?
does your son have other problem debts as well?
Tracy says
Hi Sarah.
No the one with Gladstone was different parking company.
Yes he had a lot of debts at the time most of them I managed to either pay reduced amounts to settle them in full or the company’s agreed to write them off.
He had one with Satsuma loans and they wrote to advise they would get back to me and I have not heard from them in over 18 months.
One with Lending stream who is now with Asset Management – which I have requested a Consumer Credit agreement as we can not locate
Tracy
Sara (Debt Camel) says
is your son in work? If not, is this ever likely to change?
Tracy says
Not currently but we are working towards this and hopeful that he will in the future even if only part time.
I am just trying to get rid of all his old debts so he can start with a clean slate so to speak.
I do not want to mess up his current payment plans but if they would take a full and final settlement at a reduced rate I am happy to get them paid off. I just do not want to mess up what is currently set up as he is managing them it just stresses him they will not end till 2032
Tracy
Sara (Debt Camel) says
ok so there are no simple ways to make them accept a settlement offer or write this off. You can ask them, see https://debtcamel.co.uk/debt-options/less-common/write-off/. It would help to include medical information about his mental health problems and an income & expensditure statement drawn up by a debt adviser. His local Citizens Advice can help with this.
But this is not a “commercial” debts so if the creditors say no, he can’t go to the Ombudsman and say this is unfair.
In many ways it is a shame you/he didnt take the easy way out earlier and opt for a debt releief order – a sort of simple bankruptcy. That would have saved you money and would have cleared the lot. That is still an option now, but you may feel you may as well try to repay the few that are left.