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 a month in January-March . 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.
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?
How to get a payday loan refund!
Ben Broad says
I thought as much, well at least I have some breathing room.
Yes I had borrowed several times from the lenders. I’m waiting on a ppi refund from HSBC for £8,000 and I’m also getting a complaint ready for an Amigo Loan where I’m the borrower.
It feels good to know I can make some headway in clearing my debt very soon.
Cheers for the help
Kiradevil34 says
Hi Sara,
Just a quick question in regards to credit reporting. If a debt is been defending on a court claim where there isn’t currently a judgment can the debt owner reporting to credit reference agencies add their court fees?
Thank you
Sara (Debt Camel) says
so there is a case in progress? This hardly seems worth trying to sort out, does it?
Kiradevil34 says
Thank you.
Fair point but its incredibly frustrating that they can do that, I’ve posted here before as they also brought a court claim when they were aware a complaint had been made to the fos. They are continuing proceedings regardless even after been asked by the fos to stay the claim
Sara (Debt Camel) says
This is your Shop Direct case? Where is it at the Ombudsman? Have you told FOS Lowell refuse to stay the Claim/
Kiradevil34 says
Yes it is, the fos have requested info from shop direct but so far haven’t requested anything from me, they seem to be snowed under and communication from the fos is slow. They are aware but unable to do anything further.
Another question I have is that the default balance according to the credit reference agencies and the sum claimed by Lowell’s are completely different by around £250, now that Lowell’s have added their court fees it’s around £500. I’ve never recieved a default notice so I’m lost as to why Lowell’s are claiming more than the registered default balance, is this common?
Sara (Debt Camel) says
You can ask Lowell to explain how the balance has been arrived at.
You can also put in a formal complaint to Lowell saying that they have been told you are disputing the debt and asked to stay the court action but they have refused, which is not treating you fairly and causing you unnecessary stress. If they reject it, send that to the Finacial Ombudsman!
Lee says
I have/had a payment plan set up with my creditor. The debt has now been sold. A friend has told me that I can ignor/ not acknowledge the debt. If I do this for 6 years the debt is wrote off. This seems to good to be true.
Sara (Debt Camel) says
It is too good to be true! If you try this you are very likely to end up with a CCJ.
Michelle croft says
If I took out a loan and it sold on, who do I make a claim against ? The original lender or the company that bought the debt ?
Sara (Debt Camel) says
This is affordability complaint? You claim against the original lender. BUT tell the debt collector you are disputing the debt with the original lender – they should not start court action if you do this.
Roy Langstaffe says
I have a statued barred debt, about 10 years old. However, I recently was sent a letter stating you have paid £81 and now you have stopped paying.
I have never paid or acknowledged anything for 10 years. Can debt collection make fraudulent claims like that?
Sara (Debt Camel) says
Write to them and deny you have made any payment, ask them which month it was in so you can produce your bank statements to prove you didn’t.
If this was a loan or a credit card, also ask them to produce the CCA agreement for the debt. If they can’t do that it is unenforceable even if it isn’t stature barred. See https://debtcamel.co.uk/ask-cca-agreement-for-debt/ for exactly how to ask – use the template and send a £1 cheque or postal order.
David says
Hi Sara,
I had a working tax credit debt from around 3 years ago passed to PDCS. I set up a repayment plan and made a few payments but didn’t have enough to cover one and thus it was cancelled.
I have phoned them just to set up a new one to be told the HMRC has closed the case with them. The debt is for just over £2000. Any ideas what happens now? Have tried calling the HMRC but automated voice said they were unable to deal with my call right now.
Please advise what might happen next as I am worried sick
Sara (Debt Camel) says
Sorry, I don’t see how I guess. I suggest you phone HMRC in the morning.
Michael says
Hi,
I have a rather curious one having been contacted by lowell regarding a finance agreement with Creation consumer finance regarding a sofa purchase. It was kind of a joke right from the start as they somehow managed to put the original agreement with myself under the wrong name(confused my street name and surname somehow). I contacted them regarding this after noticing they hadn’t taken the first payment and they said they had changed everything and monthly payments started coming off. I don’t think I ever received an updated credit agreement. Lowell have now contacted me claiming that I defaulted on the agreement in July 2014 still owing approx £300. This is news to me and quite clearly payments continued after this date until Feb 2015 at the end of the agreement. Looking over bank statements it looks like a couple of payments got missed so only about £60. I have told Lowell this info, except regarding the £60 owed, and they are investigating with creation but say they will do that on my behalf as it has been passed to them and I cannot put in a complaint with creation.
Am I right in thinking that I can still put a complaint in with Creation regarding the error originally and the lack of communication regarding any arrears or how they handled the supposed default if I chose?
Sara (Debt Camel) says
Are Lowell collecting on behalf of Creation or have they bought the debt?
Michael says
Hi Sara,
According to the email they have purchased the account.
Thanks
Mike
Sara (Debt Camel) says
Have you checked your credit records, does the debt to Creation show on them? I suggest you check your records with all three CRAs, see https://debtcamel.co.uk/best-way-to-check-credit-score/ for how to do this.
Did you move after the Creation loan had ended?
Michael says
Hi Sara,
I cannot see anything related to Creation on my credit reports. the first mention is from Lowell from July 2014. on the clearscore and credit karma sites
I actually moved during the period of the loan which I am reasonably sure I informed them about. It was only 6 months after the agreement had started.
Thanks
Mike
Gul says
Hi Sara,
Making an complaint to next and shop direct there gave me 2 x CCJ on my file in 2016. I am a complaining however its been sold to 3rd party like shoe smith and Ruston solicitors
Can I have advise how do I complain to ?
thanks
Sara (Debt Camel) says
What is the complaint about?
Gul says
irresponsible lending
Syed N says
Hi Sara,
I would like to make irresponsible lending to Lowell company for catalogs who sold the debt is it possible
Do I make the complaint to Lowell ?
I have spoken to Catalogs they said speak to 3rd party who is dealing with the complaint there will see what will help
Sara can you help me
Sara (Debt Camel) says
ok, the complaint goes to the original lender, not Lowell.
This article looks at the sort of thing you might want to say. This says “I would like you to refund me all the interest I paid and any late payment charges [on the account OR after you increased my credit limit in 2014]. I would also like any late payment and default markers to be removed from credit records after this point. I understand that if I take this complaint to the Financial Ombudsman, 8% simple interest is usually added to this sort of refund.”
but you could change that to ” I would like you to refund me all the interest I paid and any late payment charges. I would also like any late payment and default markers to be removed from credit records. And I would like the CCJ that is now with Lowell to be set aside.”
George says
What is the legality of a debt assignment where there is no clause on the original CCA that allows for it? I have a debt that was sold to a DCA over a year ago even though it was in dispute at the time and the DCA has recently been making searches on my credit record. I have a copy of the original agreement and cannot find any terms relating to the sale or assignment of the agreement. Having potentially sold the debt without a legal basis, what is the status of the debt now? Are the DCA searches legal?
Sara (Debt Camel) says
It is pretty standard to have an assignment clause in a debt contract. Who was the original creditor?
But unless there is a clause which prohibts assignment (and if there is, it may be possible to challenge that in some circumstances), then so far as I know, assignment is possible. But I am not a solicitor. You can go to your local Law Centre or Citizens Advice if you need advice on this.
If the DCA searches are admin searches they are not visible to other lenders and do not harm your credit score.
On what basis were you disputing the debt?
George says
There’s no mention either way on assignment, either prohibited or allowed. I’ve thoroughly checked all the wording on both sides of the page. The lender was Paragon. The Conditions is half of the back of the A4 CCA and is quite limited from what I’ve had from other lenders.
The loan had unrequested PPI on it but I couldn’t get Paragon to refund it, and due to age it didn’t fall within the FOS’s scope. They also added high charges at various points, like calling me in the middle of the week to make a payment over the phone and I could only afford £5, but £25 was added to the balance for the call. Whilst in a formal DMP, they were the only account that didn’t stop interest. Once all these things are factored in, their balance is eight times higher than it should be.
Sara (Debt Camel) says
How large is the current debt? What kind of debt was this originally?
If you aren’t sure that is a valid CCA, read the “How can you tell if it is right?” section in here https://debtcamel.co.uk/ask-cca-agreement-for-debt/ . That has a couple of links for where you can ask further about whether you have been sent a true copy.
George says
I still have the original CCA, and the copy I got from them in a SAR was the same.
The current balance by their account is under £10K – it was an unsecured loan.
Sara (Debt Camel) says
OK, but that doesn’t mean it had all the terms it should have had…
When were the extra charges added on? when were you in a DMP? what has happened to the complaint you had against them?
George says
Most of the charges are from before the DMP and some were refunded after writing to them. I already had the account in dispute with Paragon before it was sold, mostly for the charges and PPI. The PPI complaint was rejected and the FOS weren’t interested as Paragon weren’t regulated at the time of the loan. In my mind, that doesn’t make the PPI complaint invalid, but I can’t get the FOS to take any interest in it. Interest on the account didn’t stop until after I came out of the formal DMP and took it over myself. That’s when I discovered the interest was added all the time it was in the formal DMP – no other account did this.
Sara (Debt Camel) says
What dates were your DMP? So have you complained that Paragon added interest during your DMP when other creditors has stopped? See https://debtcamel.co.uk/creditor-wont-freeze-interest/
George says
The formal DMP with CCCS ran from approx June 2008 until January 2011 when I took it over myself. I have made formal complaints to Paragon regarding the interest during the DMP but never got anywhere with them. This was part of the dispute the account was under at the time they sold it, and forms part of the dispute with the new owners the whole time it has been with them.
Sara (Debt Camel) says
That complaint has to be against Paragon, not the debt collector. If it has been more than 6 months since you received a final response it’s now too late to send it to the Ombudsman :(
Peter says
Hi Sara,
I’m currently dealing with last couple of payday lenders. But my loans have been sold to debt collectors. One is from 1188 money, moneyboat and Quidie. I complained about all of them to FOS, but they haven’t replied.
I was going through emails, and I found a reply only for Quidie and moneyboat.
My 1188 money outstanding balance is around £1500. I took out a £1000 loan a long time ago and paid about £900 back, Apr was so high and I got about £1500 left to pay, back then I was in this payday loan circle I couldn’t afford to pay it back so I complained to 1188 but they didn’t upheld my complaint so I sent it out to FOS.
The problem is, now all 3 lenders are bombarding me with emails, letters and calls and I’m not sure what I can do. Should I call FOS or send an explanation email? Can you please help me? Thanks!
Kind regards,
Peter
Sara (Debt Camel) says
“I was going through emails, and I found a reply only for Quidie and moneyboat.”
Do you mean 118 Money did not reply to you? Or that you have not had an acknowledgement for FOS about your 118 Money complaint?
“My 1188 money outstanding balance is around £1500. I took out a £1000 loan a long time ago and paid about £900 back,”
If you win this complaint you will still have to repay the other £100 so you have repaid what you borrowed. You could make a payment arrangement with the debt collector for this debt and it will start chipping away at that money.
“The problem is, now all 3 lenders are bombarding me with emails, letters and calls and I’m not sure what I can do.”
Dso you have any spare money to make payments? Are you paying other debts such as loans and credit cards?
Peter says
I just can’t find any emails from FOS about 118 money. I’ve sent a complaint about them again at the end of the last year, through their website, but the worst thing is, they didn’t send an email with reference or anything.
I’m pretty sure I’ve done a complaint twice, but it looks like they have ignored it. Should I send a new complaint?
Thanks
Kind regards,
Peter
Sara (Debt Camel) says
When did you get the final response from 118 money?
Peter says
I complained on 9th of January at they sent a final decision on 1st of March. I’m pretty sure I’ve forwarded to FOS but I can’t find any emails from them regarding that complaint.
Sara (Debt Camel) says
It is more than 6 months since the Final Decision – if you put in a “new” complaint now, FOS will say it is too late.
You need to talk to FOS about finding your “old” complaint. You may not have sent it in … then you have probably lost your chance.
Victoria says
I am in a pickle!
I received a decree for charge of payment at the end of 2018. This was for a debt which was 8 years old. I disputed and the debt was “cleared” in the sense the company was chasing me for debt which was old.
I have now received a letter in from a another company – which after I have Googled and checked HMRC is the same solicitors who changed names in Feb 2019 – asking me to contact them.
I am now worried the debt was never cleared or that another decree will be filed. I want to know where I stand before I contact this company if anyone can help?
Thanks
Sara (Debt Camel) says
Are you based in Scotland?
Andy says
Hi Sara,
Any advice would be welcome.
I have a default on my file and CCJ from the same Company (Moneybarn) the default is due to drop off my file in February 2020 and the CCJ in December 2020, I have kept up my payments each month and noticed that my DD did not come out my account this month, so I phoned up and asked the question.
They have just said that the debt has been sold on and the new creditors will be in touch with me to sort out payments. I’m sure they said it was Arrow Global who has it. My question is can this new company extend my default and CCJ or reissue it for 6 years again from the day they take the debt over?
I have tried so hard to get out the hole I put myself in and these are the last two things on my credit file any thoughts would be appreciated.
Also have a affordability claim against Moneybarn which is with the ombudsman at the minute.
Thanks
Sara (Debt Camel) says
No. The debt collector has to use the same default date as the original creditor so it goes after 6 years. The CCJ can’t be extended or reissued, it too goes.
Andy says
Thank you for your fast reply.
Matt B says
Hi Sara,
My debt with PDUK was sold to PRAC with BW Legal chasing for repayment. The debt was circa £900 when bought with the loan amount being £450.
I paid down the loan to £400.00 but haven’t paid anything for at least 2 years.
I have a compliant with PDUK, which is in administration, after taking out numerous loans concurrently before the payments got too much.
I noticed that the loan was on my Experian report as being 6 in arrears and having the balance of £400, so contacted BW Legal to let them know this agreement was being complained about.
They have now sent me letter saying I need to pay the £400 regardless of whether I have a compliant or not. Is this correct?
And if I win the compliant, will the debt be wiped?
Thanks
Matt
Matt B says
Hi Sara
Any luck with this?
Caroline says
Hi
My husband had a ccj in 2008. Thsi was with HLCF, they sold the debt to booker management in 2010. The contact telephone details i’ve got for bookers is no longer working. I’ve searched and can’t find any info. We’re moving house and a charge was put on the leasehold. How do I find it who now owns the debt and how to pay it?
Thanks in advance
Sara (Debt Camel) says
whose name is on the Charge?
Jo says
Hi
I had a debt with virgin who sold the debt on to Intrum. It’s one of five debts I’m paying through a dmp. I’ve had my dmp around 2 years now.
Today I received a letter from Intrum offering 80% off my debt. Is this too good to be true? If I can get the money should I pay it as a partial settlement?
What would other creditors I have think? They are aware of the impact on my significant mental health issues so I’m hoping it’s going to be a good start to 2020 if it’s right to settle. It will bring my total debt from £34000 to £28000. Leaving 7 years to pay instead of 10.
Please advise me. Thanks
Sara (Debt Camel) says
Is this too good to be true?
No, there aren’t any catches here, provided you have the money for the settlement, there are no drawbacks to accepting this.
But this is now problem free debt where the interst is frozen. Don’t make your life harder by borrowing this money and then having to repay that as well as making your DMP payments.
What would other creditors I have think?
Realistically, they aren’t likely to notice! But if they did, they should be happy this has happened as it makes it more likely that they are going to be repaid in full and quicker. If they fancy a quick, low settlement, then they can always make you an offer themselves!
And your DMP firm won’t care either.
The possibility of this sort of offer is one of the reasons why people whopuldn’t worry when a debt is sold to a debt collector.
And it is also a reason why a DMPO which looks very look (and at 12 years at the beginning, yours was!) may improve.
And it’s a good reason for you to try to put some money aside in a pot that can be used for these sorts of settlements. After 2 years is pretty quick, but you may get some more after another year or two.
J Bairner says
Hi Sara,
My partner as several debts outstanding from around 2014 & 2015. There are 2 large ones that are about to hit the 6 year mark, 2nd & 15 Feb. Can I just clarify, when they reach these dates this year will they be removed from his credit report and become statute barred?
Also, regarding these 2 debts, letters seemed to have stopped which seems a bit odd as up until earlier December they were arriving regularly. He is concerned about this silence and worried that these have been turned into CCJ’s without knowing.
His concern arises from actions his ex partner might have taken, she knows if his debts turn to CCJ’s it will be detrimental to his work. It is possible that she will have contacted them and directed any letters from the DCA’s to her address and essentially my partner will not know if the DCA has decided to pursue the debt through court. To date they haven’t proved the debt but if he is not seeing the letters he is not in a position to stop any court action.
Is it acceptable and safe to contact them by email with a request to validate the debt and then maintain contact/monitoring by email going forward.
Sara (Debt Camel) says
“ 2nd & 15 Feb”
are those the default dates on his credit records?
“It is possible that she will have contacted them and directed any letters from the DCA’s to her address”
I have never heard of anyone doing this. Would she know who the debt collectors are and know the details about the debts?
“To date they haven’t proved the debt”
Can you say some more about this? What sort if debts are they?
J Bairner says
Yes, 3rd & 15th are default dates and there’s been no contact or payments since, and only because we haven’t been able to afford it.
Yes, it is very possible and likely she would contact them, she has done something similar in the past.
One Debt is a credit card and another is a loan both sold to Lowell. We have written twice asking them to prove the debt and on both occasions they’ve written back saying they’re looking into it
Kelly says
Hi
I was wondering if you could help me, my welcome finance debt was sold years ago to Lowell who I’ve been paying through stepchange.
I got a letter this morning from welcome finance regarding its liquidation, does this mean I still have to pay the debt as they sold it previous to the liquidation?
Rich says
I had a credit card debt with Aqua, they in turn sold it to Mortimer Clarke / Cabot , whom I never got any paperwork from in any form ( I understand this is common)
They then tried unsuccessfully to gain a CCJ against me , they failed as I asked them to prove they owned the debt via the advise on here and other forums
Now that the debt is stayed can I ask/ make them remove the defaults and records from my file?