Archive for June, 2012

Banks Using PPI Refunds to Lower Outstanding Debt

Friday, June 29th, 2012

Some £9 billion has been set aside to repay premiums on miss-sold policies. However, in some cases instead of being paid directly to the claimant, the payment is being taken instead and used to reduce the size of debt owed to the bank by the individual.

Banks and building societies are running the ploy legally. They are allowed to ‘set-off’ cash held in a customer’s name against any overdue debts and use it to reduce the size of the existing loans without warning.

Critics say hard-up borrowers may have more pressing loans to repay elsewhere, often at higher rates of interest, and some need the cash to ward off debt collectors.

Steve Rees, adviser at debt management company Vincent Bond, says:

‘You should have the right to prioritise which debts get cleared first because you might owe a more aggressive company that is threatening to take you to court.’

However James Falla, personal debt advisor at BeatMyDebt.com disagrees, saying:

“Banks should not be penalised for taking a more lenient stance when it comes to debt collection. If they are prevented from off-setting their own debts because they are not shouting the loudest, then it is simply going to encourage more banks to take early legal action to collect their debts.”

“This would be in no-one’s interest, certainly not the individual who is trying to deal with their debts using a debt management plan.”

Nationwide said:

‘As with all financial services institutions, Nationwide has the right to set PPI compensation payments off against debts due on the account to which the PPI applies. We believe this is a fair and reasonable approach and it only applies to our customers in arrears’.

‘Customers who have a loan with us which is not in arrears can choose whether to use any PPI redress they receive to set off against their loan or have a payment direct to them by cheque.’

James Falla believes that people who are struggling with their debts should not be discourage from making claims:

“What we are talking about here is people who owe a debt to a bank that they cannot afford to pay. Anything that will help them reduce this debt is an advantage and people should not be discouraged from making PPI claims in these circumstances”

“It may well be the case that the same individual has other debts which they are unable to pay. However with one less debt to manage, resolving the remaining issues will be that much easier.”

Tags: banks, debt collection, PPI, premiums
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Experian Names Collectors Bureau Director

Thursday, June 28th, 2012

Experian®, the global information services company, today announced the appointment of Paul Rout as Commercial Director, Collections Bureau and National Property Database, Experian UK&I.

In his new role, Paul will be responsible for the development and overall strategic direction of Experian’s Collections Bureau, a new service which will be launched later this year with the aim of improving data accuracy in the collections marketplace. Paul’s key focus will be to bring data sources together to help organisations adhere to changing Office of Fair Trading (OFT) debt collection guidelines, consolidate customer contact and minimise stress of the customer. Experian’s industry wide solution will ensure that the most recent and appropriate information about a debtor is used with a goal to increase efficiency, improve customer relationships and increase data accuracy in debt collection practices.

Paul’s primary expertise is focused on Strategic and Operational Marketing, Credit Risk and Customer Relationship Management, gained in a variety of industry and consulting roles, including Bank of Scotland, AMP, Accenture and PA Consulting Group.

Paul previously spent five years as a product director at Experian where he played an instrumental role in developing and implementing customer and marketing strategy as well as driving forward product and proposition development.

Jonathan Westley, Managing Director of Consumer Information Services at Experian UK & Ireland, said:

“Paul is recognised for his strong strategic and analytical experience having held numerous positions across a range of sectors over the last 17 years. He brings with him extensive experience delivering growth, innovation and client value as well as prior knowledge and understanding of Experian and its core target markets so is ideally placed to drive the exciting new developments within Experian’s collections portfolio.”

Tags: Collections Bureau, experian, Jonathan Westley, Paul Rout
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Late Payments ‘Crippling’ Many Small Businesses

Wednesday, June 27th, 2012

Late payments are crippling many small businesses, according to a survey by the Federation of Small Businesses.

The survey found that almost three-quarters of companies have been paid late in the last 12 months. This puts strain on their cashflow – meaning that they find it hard to pay their suppliers and their staff on time.

According to the survey, two of the worst payers are big businesses and members of the public.

Small businesses say chasing late payments uses up valuable resources that could be better used to attract new customers, instead of clawing back what they’re owed.

Jackie Williams runs her own micro-business servicing smoke ventilation systems in Cardiff. She wants to see the Government back her ‘Just Pay’ campaign, which would see businesses settle their debts 37 days after invoice.

“We always pay on 37 days, and sometimes that’s very difficult, but obviously in the current financial trading situation banks aren’t keen to give overdrafts. People are holding onto their cash and it causes a knock-on effect that leads to such a big challenge for business.”

The Federation of Small Businesses says the Government’s commitment to pay all invoices to small firms within 10 days has improved payment times, but that more can be done to protect small businesses dealing with late payments.

“In the current economic climate, every penny counts and for small businesses a late invoice can mean not being able to pay their staff. We need to see all businesses ensuring that they make payments on time if the private sector is to get on with the job in hand of strengthening the recovery.”

Tags: federation of small businesses, late payments, small businesses
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SMEs Spending 130 Hours a Year Chasing Late Payers

Tuesday, June 26th, 2012

A recent survey has revealed that SMEs are spending an average of 130 hours a year chasing late payments for unpaid invoices and overdue accounts.

The research, carried out by RBS Invoice Finance, suggests that these two factors – spending time chasing late payers, and the impact overdue invoices have on cash flow – are a persistent threat to the wellbeing of small businesses.

The company has suggested measures that small firms could adopt to ease the pain of late payment – we have summarised these suggestions here:

Tips for keeping on top of overdue invoices

When working out your cashflow forecast, factor in a ‘worst case scenario’, to establish the impact on your business is all your outstanding payments were not paid for several months.
You might consider offering customers or clients an early payment discount, e.g. deduct 5% if you pay the invoice within 14 days, or for an immediate upfront payment.
Always clearly print your payment terms on all relevant paperwork, such as your invoices, order confirmations, and contracts.
Ensure that you have an efficient plan for keeping on top of any outstanding invoices. Make sure you chase up overdue payments promptly, and ask for an accounts department contact when you first do business with a new client or customer.

Mark Qualter, from RBS Invoice Finance, said that business owners could free up a lot of time by outsourcing the payment chasing process to a third party debt collection agency:

“By reducing the need to chase up payments, SMEs could free up to three extra weeks every year – time that can be spent concentrating on business development, marketing or improving customer relationships.”

Any business who is experiencing difficulties with late payers, unpaid invoices or overdue accounts should contact Federal Management immediately on 0844 875 4022 to discuss how debt collection can improve your cashflow and free up time to run your company.

Source: Debt Collection News

Tags: overdue accounts, small and medium enterprises, sme, unpaid invoices
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£31Million Drop in Tenant Arrears

Monday, June 25th, 2012

Recent figures show a £31million drop in outstanding rent arrears in may, according to the latest Buy-to-Let Index from LSL Property Services plc

Rents rose for a second consecutive month in May, according to the latest Buy-to-Let Index from LSL Property Services plc, which owns the UK’s largest lettings agent network, including national chains Your Move and Reeds Rains.

In May, the average rent in England and Wales rose by 0.4% to £712 per month, with rents returning to their January level. Despite the monthly rise, the rate of annual increase slowed, with rents 2.3% higher than a year ago, compared to 2.4% in April.

Part of this fall in the amount of outstanding rent arrears is coming from the usage of private debt collection agencies who are helping landlords up and down the country to recover their outstanding bad debt.

David Newnes, director of LSL Property Services comments

“The end of spring has brought with it renewed activity in the rental market, and rents have returned to the level seen before the impact of the stamp duty deadline rush by first-time buyers. The reality is that thousands of frustrated buyers are still financially trapped between a rock and a hard place. Historically high rents and rock-bottom savings rates are hampering attempts to save for the larger deposits banks now require – not to mention meeting the cost of the reinstated stamp duty tax. In turn, fewer tenants are able to leave the sector, and the strong tenant competition is pushing up rents as a result, making saving for a deposit harder still.”

Overall rental arrears improved after a seasonal increase in April, with 8.9% of all rent late or unpaid at the end of the month, down from 9.9% in March. In total, unpaid rent in May amounted to £275m, down from £306m in the previous month.

Newnes concludes:

“Rental arrears took a turn for the better in May, following a seasonal spike triggered by Easter holiday spending. In fact, while a minority of tenants may be facing severe financial difficulties, the general tenant population has broadly coped well with high rents and the rising cost of living so far this year. However, with the economy struggling and the labour market far from flourishing, households will remain under financial pressure, and it is crucial landlords are not caught flat-footed by a deterioration in tenant finances.”

Tags: landlords, LSL property services, rent arrears
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£82,000 Debt Left in Limbo

Friday, June 22nd, 2012

A TEAM of Truro doormen awarded more than £82,000 by employment tribunals are claiming a security firm has avoided paying up by exploiting “loopholes” in business law.

The L2 nightclub in Truro was purchased out of administration in the summer of 2010 with no redundancies being made from new owners Peter and Jason Masters. Then, with just weeks to go until Christmas, security staff discovered that they were being transferred to Pathfinder (UK) Ltd.

Former assistant head doorman Rob Penhaligon said:

“We didn’t have any qualms.”

But Pathfinder (UK) Ltd director Kenneth Gordon then stopped their work, giving shifts to others.

Former head doorman Anthony Caruana said:

“I asked if I was going to get any work and they said, ‘not at the moment’.

“We had not been given a P45 or P60. We were told we were on a ‘zero hour’ contract – effectively we were left in limbo.”

After unsuccessfully attempting to meet with their new employed over a period of several weeks, the decision was made to take Pathfinder (UK) Ltd to an employment tribunal. Ultimately, 11 of the staff were found to have been dismissed unfairly and were awarded £76,031.83 in total. Interest added after 42 days took this to more than £82,000.

Doorman Dickie Vinson, who won an award in the first tribunal, said:

“On the first day we won, but on the second we came in to find out what we had been awarded and they (Ken Gordon and his solicitor) didn’t even come in to argue the case.”

Shortly after the doormen applied for tribunals on April 10 last year, Pathfinder Security Services Ltd was set up, of which Mr Gordon was also a director. Within two weeks of the result of the first tribunal Mr Gordon had resigned as director of the new Pathfinder company and the company name was changed to SIA Security Services South West Ltd.

While Pathfinder (UK) Ltd and SIA Security Services South West Ltd are different companies and have different directors, calls to a number linked to Pathfinder (UK) Ltd are answered by SIA Security Services South West Ltd staff.

Pathfinder (UK) Ltd’s former web address redirects to SIA Security Services South West Ltd. Company websites, which are no longer active, linked both Pathfinder companies, while Pathfinder (UK) Ltd and SIA Security Services South West Ltd share an address and have similar logos.

A five-year £7 million contract for Plymouth City Council’s event security was awarded to Pathfinder (UK) Ltd and three other companies in 2009.

In May a council spokesman said:

“Pathfinder are now trading with the council under SIA Security Services South West Ltd.”

In March this year Mr Gordon became director of a new company, Security South West Ltd, registered to the Plymouth address of SIA Security Services South West Ltd. SIA Security South West staff said he runs the company’s monthly training for industry badges, and St Austell Brewery also confirmed he runs courses for them.

Pathfinder (UK) Ltd’s accounts were not filed in 2011 and Companies House applied to strike it off, but this was suspended when Mr Penhaligon, an unnamed third party and an unnamed government organisation objected.

Collection company High Court Enforcement Group (HCE) has been chasing the tribunal award money. In law it can only pursue the company against which the tribunal award was made.

Mr Gordon told the West Briton:

“There is no real comment I can make”, adding the tribunals sunk Pathfinder (UK) Ltd, which has not traded since.

He subsequently failed to return calls or respond to e-mails.

Mr Penhaligon, L2 assistant head doorman for eight years, said he believed the system was unfair and that company directors should be personally liable.

“If you (as an individual) get a court ruling (against you) and don’t pay out you are breaking the law.”

But if the ruling was against a limited company, the directors were not personally liable.

Mr Penhaligon added:

“It’s just so frustrating. In my opinion they’ve just used loopholes in the law to get what they wanted and avoid paying.”

Doorman Don Florin said:

“What’s the point – we’ve done it all by the book but we’re no better off.”

Mr Vinson, now working at Bunters in Truro, added:

“We’re not going to give up. We don’t feel this is justice.”

Source: Debt Collection News

Tags: business law, employment tribunal, security debt
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CSA Hails Government Announcement on the Edited Electoral Roll

Thursday, June 21st, 2012

The Credit Services Association (CSA), the voice of the UK collections industry, has welcomed the decision by the Government to retain the Edited Electoral Register (EER) and will continue to lobby Parliament for access to the Full Electoral Register.

President of the CSA Sara de Tute believes the decision is a victory for common sense saying:

“We are delighted that our efforts as part of the Cross Industry Working Party have borne fruit,”

“We have always maintained that it is somehow strange and unfair that creditors can use the Full Electoral Register for lending money, but we are denied access to it for collecting money owed and helping individuals resolve their financial difficulties.”

It was in November last year that the Political and Constitutional Reform Select Committee published its report on ‘Individual Electoral Registration and Electoral Administration’, calling for the abolition of the EER on the grounds of improving voter registration rates.

Sara says that the Government’s decision to retain the EER will be well received by CSA members, many of whom have been actively lobbying their own local MPs:

“This announcement is an encouraging step forward as we continue to campaign for access to the Full Electoral Register.”

Source: Debt Collection News

Tags: Credit Services Association, CSA, Edited Electoral Roll, Government Announcement
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New Credit Ratings Rules ‘To Help Markets’

Wednesday, June 20th, 2012

Tighter controls on credit ratings agencies should steady volatile markets and cut out conflicts of interest, MEPs have said.

A plan approved by the European Parliament’s Economic and Monetary Committee now triggers talks with EU governments and the European Commission on the final terms of new legislation designed to curb agencies’ powers.

Italian socialist MEP Leonardo Domenici, who steered the proposals through the Parliament, said: “The debt crisis in the eurozone has demonstrated that credit rating agencies have gained too much influence on the financial markets to the point of being able to interfere in the political agenda. We need to restore a balance here.

“Credit rating agencies should provide an information service to investors and consumers. We don’t expect them to give political opinions. Their work should respect rules on quality and transparency but should also be subject to a system of liability.”

The European Commission threatened a crackdown last November because a series of ratings downgrades by the main agencies at key moments in the unfolding eurozone crisis were seen as worsening the drama.

EU Financial Services Commissioner Michel Barnier said more competition was needed in the sector, with more accountability by agencies for any mistakes. He even suggested banning such agencies from downgrading countries in the eurozone bail-out scheme.

The draft accord falls short of that but says that as sovereign debt ratings can affect the credibility of nations and increases their borrowing costs, the agencies’ pronouncements should reflect national situations and avoid comment on policy changes.

MEPs also want to force agencies to publish annual timetables of dates for publishing its sovereign ratings, to give countries time to prepare for them. But Conservative MEP Ashley Fox warned that a fixed calendar for issuing ratings would make markets more “twitchy”. He said:

“The commission and some MEPs have sought to overstretch the EU’s reach into areas where it is not needed and, at the same, failed to deliver the obvious and limited reforms which could have made a real difference.”

While he successfully talked down efforts to ban agencies such as Moody’s, Fitch and Standard and Poor from issuing unsolicited ratings at all, Mr Fox said the rest of the proposal was a “wasted opportunity.”

The agreed compromise would force them into a strict reporting calendar, adding “needlessly” to market volatility around the report date. The EU would also create its own credit-worthiness authority, a move Mr Fox said would lack independence and therefore credibility.

Source: Press Association

Tags: Banking, credit rating, EU, Europe, Government
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Debt Collectors Attacked by Machete Wielding Thug

Monday, June 18th, 2012

A thug wielding a machete has robbed two debt collectors as they made their rounds.

The masked attacker struck as the man and woman were outside a flat near Park Road in Sale. He demanded money, mobile phones and car keys before running off in the direction of Firs Road.

Police are appealing for witnesses to the theft, which happened at 11.25am on May 29.

Det Con David Wood said:

“It is unthinkable for most people to be confronted by such violence when simply going about their daily job. I would therefore appeal to anyone who might have information about this robbery to come forward. I want to hear from anyone who either witnessed the robbery itself, or perhaps someone saw a man fitting this description hanging around the area. If do you have any information then please call us.”

The attacker was white, 5ft 7, of medium build, and wore black leather gloves, a black hat and a thin cotton scarf over his face.

Anyone with information should call police on 0161 856 7652 or Crimestoppers, anonymously, on 0800 555 111.

Source: Debt Collection News

Tags: debt collectors, debt collectors attacked, manchester debt collection
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Six Jailed in Credit Fraud Scam

Thursday, June 14th, 2012

Six men have been jailed for their part in running a huge fraudulent credit forum, selling fake identity document to an estimated 11,000 customers to be used in crimes such as identity theft.

The criminal scheme was run by British ringleader Jason Place, 42, who set up the website www.confidentialaccess.com from a villa in Spain, offered criminals access to high-quality fake documents, including bank statements, credit history print-outs, driving licenses, wage slips, and even utility bills.

To give the documents an air of authenticity, the gang set up a fake firm, National Chartered Accountancy Network, hijacking the identity of a real accountant to back up its references.

The criminal gang were not satisfied with simply aiding identity fraud and began to offer additional consultancy services to criminals who bought the top end “platinum package”, showing them how to carry out crimes via web chat and video.

Then, once the information had been bought, the gang threatened to wreck the credit profile of customers carrying out successful identity theft unless they paid over 50 percent of the takings from their first fraud.

British police now have the task of tracing the worst offenders from the thousands of Confidential Access website users, which is known to have caused at least £1 million of fraud in addition to the £11 million the site generated for its masters over three years of business.

Metropolitan Police detective inspector, Tim Dowdeswell said:

“This was a sophisticated operation which has netted millions of pounds over the years. These cyber criminals not only provided the tools to commit fraud they instructed their clients in how to use them to make the maximum amount of money, whilst ruining real people’s credit histories into the bargain.”

“We have already brought many of their students in crime to court and will continue to work with other police forces and partners to bring those people who bought and used these identities in their own frauds to justice.”

Full sentencing details

Last Friday (8 June) at Southwark Crown Court for a catalogue of fraud offences.

Jason Place, 42, 9( pictured) of Gravesend, Kent was sentenced to six years nine months for conspiracy to defraud.
Mark Powell-Richards, 59, of Bickley, Kent was sentenced to two years three months for conspiracy to defraud.
Allen Stringer, 57 of Crossgates, Leeds was sentenced to two years three months for conspiracy to defraud.
Michael Daly, 68 of Erith, Kent was sentenced to 12 months suspended for two years and 250 hours of unpaid community service for conspiracy to defraud.
Jaipal Singh, 31 of Wednesbury, West Midlands was sentenced to 18 months for conspiracy to defraud.
Arun Thear, 22 of West Bromwich, West Midlands was sentenced to six months suspended for two years and 150 hours unpaid community service for forgery.

All six had pleaded guilty at earlier hearings.

The Crown Prosecution Service (CPS) made a decision not to prosecute Barry Sales because he has a terminal illness.

Source: Debt Collection News

Tags: credit fraud, identity theft, ientity fraud, jason place
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