Ever had any dealings with a bank?

[Saracen]

Pay back what you owe? Sure!

Pay ten times that loan to a finance company ten years later because they forge a document that says they can charge 36% interest on paper they bought for $100? Hell no. That's unjust enrichment. The purpose of suing and the courts is to make things right, to fix a problem, and I absolutely support that. However the banks use the system to make huge profits from people either can't afford or don't have the knowledge to fight.

As I said, the methods some less reputable debt chasers use are a travesty and ought to be put a stop to.

But .... if they've bought a debt for 10p in the pound, it would because the original lender was prepared to sell it at that, and that will be because they didn't consider it worth chasing, or cost-effective to so so. Why not? Because they've tried all the conventional methods and they didn't work.

So .... when they buy debt at 10p in the pound, or whatever, part of their cost is that they may well end up writing off a large part of what they bought. And for the remainder, they may well incur significant costs, perhaps in locating the debtor, and then in enforcing it.

This is NOT to say I think they're all ethical, amnd certainly not to say that they always target the right people, though it also has to be borne in mind that most of the time, by the time it gets to this stage, the "right" people will swear up is down, and that they aren't the right people either.

There is regulation over these people. and codes on practice, and yes, it seems to me that they are both ignored on a regular basis and that the methods, and tactics, they use should be and could be much more closely scrutinised, and that if they harass people that have said it;s nothing to do with them, then they ought to have to prove that that's a lie or leave themn alone, precisely because there are too many cases where they've got it wrong.

So I'm not condoning the techniques these companies use.

But .... at the end of the day, the debt is outstanding, and it wouldn't be is people paid what they owed. When these companies plague people that don't owe the money, it's a disgrace. But when they target people that do, and it turns out that either the rate of interest is high or that there have been a lot of fees attached, well, it's hardly surprising when those people have done everything they can, up to and sometimes including moving and using a different name, to dodge their debt.

It's a cold hard FACT that some people try to avoid paying what they owe. Sometimes, as I said earlier, it's because they can't pay, due to some unforeseen event like illness, accident or unemployment, or a combination of these, but sometimes it's because they simply won't pay if they can avoid it.

And when people don;t pay, and the lender either winds up writing the debt off or selling it on at a heavily discounted rate, it's going to incur a cost that the rest of us pay because it's reflected in the interest rates we do pay. In your mortgage will be a cost reflecting bad debt on mortgages. In your car laon will be a charge reflecting the percentage the loan company expect to end up as bad debt.

We pay more, because others can't or won't pay the debts they, quite willingly, took out.

So do I have a lot of sympathy for those that get clobbered with 36% interest, and got a bucketload of fees and collection charges? Not really, because if they'd paid what they owed in the first place, or kept to an agreed repayment plan, they wouldn't be facing the extra fees or interest.

TeePee, I know you've got a personal interest in this, and from your "Location" I'm assuming you're in the US (Oregon). I'm not commenting on what goes on over there, as I don't know, and it may well be very different. My remarks are about the system I see in operation in the UK which, of course, is what the court judgement was about, and where I live. And from that perspective, while some of these collection companies can be very obnoxious indeed, and certainly there's anecdotal evidence that some pay scant notice to their codes or conduct or even the law, it's also the case that some of the people they're chasing do owe money, should and sometimes could pay it, but won't if they can help find a way to avoid it. And chasing them down can get seriously expensive and somebody has to pay for that. I just don't see it should be those that do honour their agreements and pay their debts.

This judgement merely removes a loophole people have been using, often quite well aware that they Do owe the money and in the example I quoted earlier, could have paid it, but simply tried to get out of it. And they had, after all, racked up some $400,000 in loans (fancy cars) and credit card debt by living the high life .... on someone else's money. Am I glad to see a loophole that people like that used to dodge their debts closed? Hell, yeah.

[wombar]

And, wombar, I'd say it took three, perhaps four, to tango. Yes, people and the banks are responsible. That's two. But third ... the regulators that were supposed to be overseeing the banks. That means the BofE and the FSA. That ls three. Finally, there's the politicians that designed and implemented that regulatory system, and yes Gordon Brown, I do mean you.

Couldn't agree more Saracen (as usual ). In principle the FSA is a great idea, but without true independance from the government, they've just become a framework for meaningless bureaucracy. Realistically, the FSA and BofE both get their marching orders from the government. Yes, they're meant to be independant, but broad policy will be issued at No.10.

I think we all know that the FSA looked the other way for years, because the government didn't want them ruining the image of the "end of boom & bust". The amount of fraudulent (i.e. lying about wages) mortgage/loan applications that were being approved in 2006/2007 is testament to this.

I try to be philosophical about these things, but when people are paying £200 on their mortgage (0.5% base rate. Seriously??!!) compared to £800 for rental, it gets pretty hard to go to my happy place

[cookie365]

What evidence that you agreed exists, other than a signed agreement?

You're completely missing the point.

If the only evidence of the contract is the original credit agreement, and that's gone walkabout, then the creditor isn't going to get judgment. But there's plenty of other ways the creditor might be able to demonstrate the terms of the agreement, e.g. through evidence that the terms of all loans taken out on that day were contained in booklet abc/123/c and evidence that the debtor was sent the booklet.

But if the evidence isn't good enough, the court won't grant judgment.

I'm not sure how much you know about English law, but the onus is on the person bringing proceedings to demonstrate the debt.

Before this decision, the creditor could prove that the debtor owed the money, and prove the terms of the agreement, but could still lose if they didn't have the magic piece of paper. Now they have to prove that the debtor owed the money, and prove the terms of the agreement.

Is that really too much to ask?

[TeePee]

The system here is much the same as the UK, with some exceptions. I lack any sympathy for people playing the system and using a loophole to dodge repaying what they owe. However the criticism should be towards the banks for failing to keep proper records. If they really care to reclaim the money owed then keeping these records should be very easy. My bank uses an electronic signature pad, and scanned all the old documents. If a bank can afford to lend someone 100K then they can afford to keep a god record of it!

The reality is, they tried to save money by not keeping the records they knew they could be required to present on request (and your mortgage was cheaper because of it!). Their failure to foresee that so many people would be defaulting, and that they would be required to show these records, is what is now costing you money.

Imagine if I said you owed me money. Would you pay it or ask me to prove it?

Then, what if instead of trying to prove it, I then called you twice a day, along with your friends, neighbours and boss, and told them all what a deadbeat you were for not paying? Then I sued you with a forged document and sewer served so you didn't know to show up and got a default judgement against you, had your car repossessed and your wages garnished? How do you fight me when I'm taking all the income you could use to fight?

This is not that extreme of an example of the current techniques used by debt collectors. Obviously I'd be breaking the law in this scenario, but you'd have to sue me to stop it. This is the reason we should require creditors to provide cast iron evidence of a debt owed. To prevent them from exploiting people who are often in very difficult situations.

[Clunk]

The system here is much the same as the UK, with some exceptions. I lack any sympathy for people playing the system and using a loophole to dodge repaying what they owe. However the criticism should be towards the banks for failing to keep proper records. If they really care to reclaim the money owed then keeping these records should be very easy. My bank uses an electronic signature pad, and scanned all the old documents. If a bank can afford to lend someone 100K then they can afford to keep a god record of it!

The reality is, they tried to save money by not keeping the records they knew they could be required to present on request (and your mortgage was cheaper because of it!). Their failure to foresee that so many people would be defaulting, and that they would be required to show these records, is what is now costing you money.

Imagine if I said you owed me money. Would you pay it or ask me to prove it?

Then, what if instead of trying to prove it, I then called you twice a day, along with your friends, neighbours and boss, and told them all what a deadbeat you were for not paying? Then I sued you with a forged document and sewer served so you didn't know to show up and got a default judgement against you, had your car repossessed and your wages garnished? How do you fight me when I'm taking all the income you could use to fight?

This is not that extreme of an example of the current techniques used by debt collectors. Obviously I'd be breaking the law in this scenario, but you'd have to sue me to stop it. This is the reason we should require creditors to provide cast iron evidence of a debt owed. To prevent them from exploiting people who are often in very difficult situations.

Agreed. I was just typing a very similar thing about my experience with a debt collection agency trying to recover a debt that wasn't even mine. For that kind of thing, this could be a kick in the teeth, I suspect.

Some of the tactics used to harass me were were actually illegal, it only came to light later that they were, so at the time, I didn't know I could do anything about it. The people rejoicing about this have obviously never been at the receiving end of a less than honest DCA's rampage.

[cookie365]

The system here is much the same as the UK, with some exceptions. I lack any sympathy for people playing the system and using a loophole to dodge repaying what they owe. However the criticism should be towards the banks for failing to keep proper records. If they really care to reclaim the money owed then keeping these records should be very easy. My bank uses an electronic signature pad, and scanned all the old documents. If a bank can afford to lend someone 100K then they can afford to keep a god record of it!

The reality is, they tried to save money by not keeping the records they knew they could be required to present on request (and your mortgage was cheaper because of it!). Their failure to foresee that so many people would be defaulting, and that they would be required to show these records, is what is now costing you money.

Imagine if I said you owed me money. Would you pay it or ask me to prove it?

Then, what if instead of trying to prove it, I then called you twice a day, along with your friends, neighbours and boss, and told them all what a deadbeat you were for not paying? Then I sued you with a forged document and sewer served so you didn't know to show up and got a default judgement against you, had your car repossessed and your wages garnished? How do you fight me when I'm taking all the income you could use to fight?

This is not that extreme of an example of the current techniques used by debt collectors. Obviously I'd be breaking the law in this scenario, but you'd have to sue me to stop it. This is the reason we should require creditors to provide cast iron evidence of a debt owed. To prevent them from exploiting people who are often in very difficult situations.

So how will allowing people to weedle out on a technicality of debts they demonstrably owe stop this from happening?

[TeePee]

How do you demonstrate that someone owes a debt without proper records?

If they can create a new signed agreement, what stops them from making a new agreement with different clauses? (JDB's do that here to remove the arbitration clause).

[Lucio]

How do you demonstrate that someone owes a debt without proper records?

If they can create a new signed agreement, what stops them from making a new agreement with different clauses? (JDB's do that here to remove the arbitration clause).

Proper records can include bank transfers, payment records, general advertising literature from the appropriate time period etc.

[Clunk]

Proper records can include bank transfers, payment records

What if it's been set up fraudulently, or in error? There may still be payments/direct debits/transfers?

[TeePee]

Now we get to a procedural issue where the US may differ. Here, in order for those records to be admissible in court they'd have to be accompanied by an affidavit, and would be challenged. Unless there are account statements from a 0 balance, they'd be unlikely to be considered proof of anything. If the bank can produce these records, they'd have no trouble with a written contract.

If the bank doesn't have a written contract, which should obviously be the most important document for them to keep, it's unlikely they have enough other evidence to prove their case. What this ruling does is allow them to manufacture evidence, plain and simple. It might stop a few people using the loopholes, but it's more likely to be used simply as further ammunition in an attempt to profit from junk debt.

[cookie365]

What this ruling does is allow them to manufacture evidence, plain and simple. It might stop a few people using the loopholes, but it's more likely to be used simply as further ammunition in an attempt to profit from junk debt.

No it doesn't.

I have to assume you haven't actually read the article in the link. The creditor STILL HAS TO PROVE THE DEBT. If a 'creditor' sues with manufactured evidence - which is a pretty daft notion because it'll cost them their broker's license and therefore their business - then that becomes your defence. And the onus is on the 'creditor' to show to the court that it isn't. Exactly the same as it works in all other civil proceedings.

And if the bank can't demonstrate the debt, it won't get judgment.

Repeat: if the bank can't demonstrate the debt, it won't get judgment.

[Saracen]

Now we get to a procedural issue where the US may differ. Here, in order for those records to be admissible in court they'd have to be accompanied by an affidavit, and would be challenged. Unless there are account statements from a 0 balance, they'd be unlikely to be considered proof of anything. If the bank can produce these records, they'd have no trouble with a written contract.

If the bank doesn't have a written contract, which should obviously be the most important document for them to keep, it's unlikely they have enough other evidence to prove their case. What this ruling does is allow them to manufacture evidence, plain and simple. It might stop a few people using the loopholes, but it's more likely to be used simply as further ammunition in an attempt to profit from junk debt.

No, it doesn't allow them to manufacture evidence.

What it does is to define the requirement to produce a copy of the agreement as necessary to establish the terms of the loan, and to refute the idea used by lawyers trying to avoid their clients having to repay legitimate that that, merely by not producing the original signed agreement, the debt is automatically unenforceable leading, as the judge pointed out, to such companies going on fishing expeditions and claiming that loans don't exist simply on the basis that the lender can't produce the original document, and moreover, do it within 12 days.

Now, the lender can produce a standard agreement, with the lenders details to show the nature of the agreement, but then as Cookie says, still has to prove the debt.

It is not that the agreement makes the debt automatically owed, because that is not what the judge said at all. It is that the absence of it (within 12 days) doesn't, in and of itself and any without regard to what other evidence there is, make the loan unenforceable.

[Saracen]

...

Some of the tactics used to harass me were were actually illegal, it only came to light later that they were, so at the time, I didn't know I could do anything about it. The people rejoicing about this have obviously never been at the receiving end of a less than honest DCA's rampage.

Don't make assumptions about what's obvious, because you know little to nothing about, for instance, my background.

And this ruling is not about techniques used to collect debts, by less than honest collectors or otherwise - it's about the interpretation of one specific requirement used by a growing number of people to dodge paying make money they borrowed.

As I said several times, the methods used by some companies are disgraceful. That I fully support this judgement is nothing to do with condoning those methods or companies, because I don't and said so several times. That's not the point at all.

[Clunk]

Don't make assumptions about what's obvious, because you know little to nothing about, for instance, my background.

So you have been at the receiving end of a less than honest DCA then? If so, I apologise for my assumption unreservedly.

[TheAnimus]

I don't think its remotely unfair to insist that the bank can put their hands on a copy of the agreement immediately.

So long as its only a copy?

[TeePee]

There is no requirement for it to be produced during a certain time period here, and I'd agree that the bank's inability to provide it within 12 days shouldn't render the debt invalid. However from a court perspective, no-one should be able to enforce a contract without a copy of that contract (and a copy is more than acceptable!)
Here it should be attached to the complaint, which essentially gives the bank forever to find it, but they can't make progress in court without it.