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Archive for the ‘Debt News’ Category
Thursday, September 9th, 2010
Marlin Financial Group has sealed a multi-million debt purchase deal, rumoured to be the biggest the industry has seen for 18 months, Credit Today can exclusively reveal.
It is understood the deal with one of the UK’s leading banks is in excess of £21m and was completed in a single transaction, according to sources.
The acquired debt portfolio is primarily non-performing consumer loans including credit cards and personal loan debts.
The transaction will fuel hopes that activity is beginning to return in the sector and lenders are more willing to sell debt once again.
One industry expert said: “There certainly are a lot of large deals underway in the market but it is becoming increasingly difficult to secure funding and complete on large transactions.
“This deal shows that you need surety of funding to gain a big portfolio and could send warning signs to smaller firms who don’t have the balance sheets needed.”
Banks and investors shied away from the market after the brink of the recession created volatile pricing conditions which led to ill-disciplined deals and dented profit margins.
The lack of funding by lenders resulted in the market drying up and activity grinding to a halt while sellers and buyers waited for an equalisation in prices.
But this latest deal could stoke a return of activity to the sector. Private equity firm Duke Street Capital snapped up a controlling stake in Marlin earlier this year in a £50m deal which added to the debt purchaser’s buying fire power.
Martin Dunphy, executive chairman of Marlin, said: “We are involved in several large transactions at any one moment and we wouldn’t like to comment on one in particular.”
Tags: credit today, debt purchase deal, marlin financial group
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Wednesday, September 8th, 2010
Comments and pictures parents post on Facebook can come back to haunt them during custody battles, debt-collection efforts and job applications.
A compromising Facebook post “is like a smoking gun in that you can’t destroy it,” said attorney Shawn Kenney, the law department team leader at Thrush Law Group.
Kenney said he’s seen custody cases hinge on arguments of parental incompetence stemming from Facebook posts. He recalled a case in which a father posted a picture of himself proudly displaying a 3-foot acrylic bong. In another case, Kenney said a mother wrote about how she’d been out with her girlfriends “getting trashed for the third time this week.”
“When people put information on Facebook it may not be in their best interest and does come back to haunt them in ongoing litigation involving custody,” Kenney said, adding he’s also seen a mother call her young boy “my pimp” and a father post a picture of himself baring tattoos while posed with a butcher knife, joking that he was a killer.
Divorce attorney Robbie Lewis, who owns the Law Offices of Robert G. Lewis, P.C., has also seen Facebook rear its often-ugly head in custody battles.
“The whole face of discovery in divorce has really changed over the last few years,” Lewis said. “I can’t tell you how many times clients have found out about extramarital affairs through looking through their spouses’ telephones in the middle of the night, or checking their spouses’ e-mail or Facebook accounts.”
Lewis said in the past, clients would hire private investigators to dig up dirt on spouses. Now the evidence can be found with a few mouse clicks.
“People put silly things on Facebook accounts – pictures of themselves or other people in bars doing inappropriate things” that end up presented at trial, Lewis said.
Attorney Grady Wade, who, along with his work in other legal fields, defends clients in debt collection cases and sometimes collects debt for creditors, said while he doesn’t personally use Facebook to investigate debtors, anything people post publicly on Facebook is fair game.
“If they put stuff up there, it’s pretty much for public use,” Wade said. “If they don’t make the page private, then it’s for public use and they don’t have any expectation of privacy.”
The Fair Debt Collection Practices Act, which prohibits abusive behavior and restricts the methods collectors can use to locate debtors, doesn’t prohibit using social networking sites.
Wade said third-party debt collectors aren’t allowed to publicly shame debtors. For instance, a collector couldn’t become a friend of a debtor under a false pretense and then post something on his wall about him owing money.
The restrictions don’t apply to the creditors themselves, Wade said, adding that he’d advise clients to record any contact with a third-party collector.
Tucsonans applying for jobs at the University of Arizona, the region’s second-largest employer, had best clean up their Facebook profiles.
UA human-resources manager Chris Wolf said managers dig up whatever information they can to vet job prospects, and Facebook is within limits.
“If a candidate regularly references violent behavior, then that may be a red flag,” Wolf said. “It’s more likely that a hiring manager will discover that someone references topics such as their political views – irrelevant when it comes to determining whether they can perform well, yet it may create an unintended bias.”
No matter the context, Kenney said people should stop thinking of Facebook posts as semi-private announcements to close friends. He recalls a mentor’s advice from decades ago, advising him to be careful about what he put in writing and says it applies to social networking sites:
“Never put anything on there you wouldn’t want on a billboard on the highway,” he said
Tags: Arizona, debt collection, debt collections act, facebook, USA
Posted in Debt News, Financial News, International Debt News | No Comments »
Tuesday, September 7th, 2010
Maureen Walder, 54, married John Lewis, 48, in a lavish ceremony in Sri Lanka in October 2007, eight months before his divorce from his fourth wife was finalised.
The pair had begun their romance in April 2006 after Lewis “melted the heart” of Miss Walder, who had been single for almost 20 years.
He had led her to believe he was a “true survivor” by pretending he had been a former paratrooper in the Falklands and was shot in the leg after being forced to eject from his plane. He also claimed to have been a Lord’s chauffeur.
He later whisked her off to a Paris restaurant on Boxing Day 2006, knelt down on one knee and proposed to her.
However months later, Miss Walder, discovered the man she had agreed to marry was not only a bigamist, but also a fraudster and a fantasist.
At Taunton Crown Court on Friday, Lewis was jailed for 15 months after pleading guilty to bigamy and three offences of fraud.
Lewis swore an affidavit that he was free to marry before their ceremony in Sri Lanka, for which he hired elephants and dancers, the court heard.
The newly married couple later moved to Italy to take a house sitting job for a wealthy British couple. But when Miss Walder returned to her flat in Minehead, Somerset, she discovered a pile of letters from debt collection agencies.
A subsequent investigation found Lewis had twice forged her signature to obtain £36,000 in loan payouts. The court also heard the couple had applied for a £70,000 mortgage, but Lewis actually received £89,000, having lied to his wife.
The court was told Lewis suffered from Munchausen’s syndrome, a psychological condition that can lead to compulsive lying.
Before sentence was passed on Lewis, Miss Walder said: “This whole period of my life has been horrendous. I never want to see or hear from him again.
“Looking back it seems so far-fetched but I trusted him completely. I hope my story will save some other poor woman from being duped. All I wanted was a bit of romance but my hopes and dreams have come crashing down around me. I don’t think I’ll ever trust a man again.”
She added: “My lavish life had been a lie. I had been paying for it without even realising. I had never been in debt before and he had taken me for a mug, someone who was weak, and could be manipulated.”
Miss Walder said she discovered her husband was a bigamist, because she was curious about why he had changed his surname. “I looked online and found out that he hadn’t divorced his wife. It was the final nail in the coffin.
“Not only had I been defrauded, but I had naively married a bigamist. I reported him to police and told them everything I knew.”
Tags: Fraud, mortgage arrears, swindled, unpaid loans
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Monday, September 6th, 2010
A MEMBER of the IRA gang responsible for the death of Detective Garda Jerry McCabe has set up a debt collection agency with an ex-garda who was jailed for leaking intelligence to the IRA.
John Quinn, 43, who served six years in jail for conspiracy to commit the robbery in Adare, Co Limerick, is listed as a director of Global Debt Collection Agency, which was registered in May last year. His co-director is Denis Kelly, 47, who is a former garda.
Quinn was described as a “gopher” and “messenger boy” in the IRA’s 1996 post office robbery, in which Det Gda McCabe was gunned down and his colleague Ben O’Sullivan was seriously injured.
Kelly, meanwhile, was jailed for five years in 1992 after he was found guilty of tipping off the IRA about impending garda raids on arms dumps.
The ex-garda and the convicted IRA robber are registered on company documents, which give the address of the firm as Faha in Limerick.
Garda sources say they have received no complaints about the business. But the involvement of two convicts in recovering debts from cash-strapped businesses highlights the lack of regulation in the booming debt-collection sector.
Consumer and legal groups have repeatedly warned about the need to monitor the plethora of new debt recovery agencies that have mushroomed during the recession. The Law Reform Commission recommended the regulation of debt collection agencies earlier this year while the Free Legal Advice Centres have also called for urgent monitoring.
Justice Minister Dermot Ahern is understood to be examining ways of regulating the industry.
Kelly and Quinn are among a number of former prisoners to have joined the debt collection business. Martin Foley, a one-time henchman of Martin Cahill who has survived several assassination attempts, was one of the first in the business with Viper Debt Recovery and Repossession Services.
In a separate case, the garda’s organised crime unit is investigating the involvement of criminals in debt collecting in the Dublin area. Five men were arrested in Dublin last month for allegedly aggressive debt collection.
Quinn was described in court as the “messenger” or “gopher” for the IRA gang behind the botched robbery in 1996. Quinn was charged with the unlawful possession of ammunition and with conspiring to commit a robbery. He eventually pleaded guilty to the conspiracy charge and was sentenced to six years in jail. During his sentencing hearing, the court heard that Quinn was a carpenter who worked for his father’s construction firm, and had no previous convictions. He claimed to “deeply regret” the killing of the detective.
During his trial, gardai said that Quinn repeatedly claimed he was a “dead man” and would be found in south Armagh with a bag over his head. He allegedly told gardai off the record: “I’m a dead man. I’m looking at 30 years, ye know that. What if this got sanctioned from above? Where do I stand? I know it got the nod from above. I was told I’d be found in south Armagh with a bag over my head.”
Four other IRA men, Pearse McAuley, Kevin Walsh, Michael O’Neill and Jeremiah Sheehy, pleaded guilty to the manslaughter of Det Gda McCabe.
Former garda Kelly, who is originally from Cullen, Mallow, in north Co Cork, was stationed in Henry Street garda station in Limerick city centre during the 1990s when he was caught passing information to the IRA. At the time, gardai suspected that the IRA was getting tip-offs about impending raids on arms dumps.
Kelly was caught taking notes from a confidential fax ordering a swoop on three IRA arms dumps. Detectives then followed him to a phone box where he telephoned his IRA contact to pass on the details. Kelly was later released after serving three years of a five-year sentence.
Tags: debt collection agency, Garda, Gerry McCabe, IRA
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Friday, September 3rd, 2010
Cash-strapped families are being overwhelmed by debts they can never afford to repay, figures revealed yesterday.
Between April and June banks and building societies were forced to ‘write off ‘ £3.5bn, around £40m every day, the largest amount since records began.
The alarming Bank of England figures highlight the nightmare facing millions who borrowed money before the credit crunch to fund a lifestyle they could not afford.
The largest chunk of write-offs – a record £2.1bn – was credit card debt, with many spending more on the High Street in a day than they earn in a month.
A further £1.2bn came from overdrafts, personal loans and hire purchase agreements. Just £184m was from ‘bad’ mortgages. Before the credit crunch struck in 2007 the bill for write-offs, where lenders accept they will never be repayed, came to just £1.9bn.
Yesterday debt experts insisted the figures prove that although the recession is over, its impact is only now emerging as unemployment rises and pay remains frozen.
Mark Sands, director of personal insolvency at the accountants RSM Tenon, said: ‘We are seeing the impact of the downturn really starting to hit now.
‘It is not necessarily that people have lost their job, but they have lost their overtime, an extra shift or have had a pay cut. They can survive for a while, but suddenly they are tipped over the edge and they cannot cope with their debts.’
He predicted the number being plunged into insolvency would hit 140,000 this year, the highest ever.
Michael Saunders, an economist from the investment bank Citigroup, said: ‘The reason is simple – we borrowed too much money and people are losing their jobs.’
Over the past two years, nearly 800,000 have become unemployed, with many more set to follow as the Government’s austerity measures start to bite. To make matters worse banks and building societies have also been increasing the interest rates they charge on loans, credit cards and overdrafts.
This is despite the Bank of England keeping the base rate at 0.5%, the lowest in history, since March last year.
Since then the average rate on a £5,000 personal loan has jumped from 12.15% to 13.14%. Average rates on credit cards are up from 15.7 to 16.7% and overdrafts are up from 18.6 to 18.9%.
Meanwhile, a report from online debt forum iva.co.uk has revealed the ‘shocking depth of despair’ among many who have been plunged into debt.
It found 30% have considered suicide or self-harm ‘in response to the stress caused by being in debt’ and one in four have turned to ‘excessive use of alcohol or drugs’ to try to cope with the problem.
The majority of those who took part in the poll had debts of more than £55,000, double the average salary in the UK. Half blamed their debts on ‘overspending’, with many using easy credit to fund a lifestyle they could not afford and thus leading to debt collection.
Forum spokesman Andy Davie warned: ‘The number of people in serious debt is only going to increase.’
A spokesman for debt charity the Consumer Credit Counselling Service said: ‘We think a lot of the pain caused by the recession has been deferred. Once interest rates start to rise, which they inevitably will, or there are mass public sector job cuts, the situation is going to get even worse.’
Before the credit crunch, a typical £150,000 mortgage cost £1,127 a month on a standard variable rate of 7.69%. Today it costs just £785, but is guaranteed to go up if the expected rise in interest rates takes place.
A spokesman for the British Bankers’ Association said: ‘In a recession, it is inevitable there will be write-offs as a result of people’s financial circumstances changing. But, throughout the reporting season, the main banking groups have held the view that the worst of these impairments should be behind us.’
Tags: banks, credit cards, debt collection, insolvency, IVA, record levels of debt, written off
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Thursday, September 2nd, 2010
The Complaints Commissioner has upheld an IFA firm’s complaint over the “hectoring” phone manner of a debt collection agency employed by the FSA.
At the end of July, Commissioner Sir Anthony Holland wrote to an unnamed IFA firm, which had penned a protest letter against not only the fines imposed for its failure to pay the balance of its fees, but also the way in which the money was chased up by the FSA’s debt collectors.
However, while the Commisioner replied that the FSA was within its rights to claim the full amount of fees from the firm, as laid out in the Fees Handbook (paragraph 4.2.9), he was concerned to hear that the firm received rough handling by the debt recovery agent.
During a phone conversation with ‘Ms A’ at the debt recovery agency, referred to as ‘Y’ in the Commissioner’s letter, the IFA firm was subjected to a “somewhat hectoring approach with continual interruptions, which I consider does not reflect well on the FSA”.
The Commissioner said: “The call lasted just more than 10 minutes and in my view, was badly handled by the company concerned who, in this case, represents the FSA. While it did not represent harassment it was certainly a conversation that the company should not have allowed to develop in the way it did.”
The IFA firm had said it was unhappy that it had been asked to pay the balance of its fees for the 2009/2010 accounting year as it had already informed the FSA that it had closed to new business on 19 August.
Its reason for closing to new business was that a provider had suddenly stopped its renewal commission payments.
The IFA firm claimed it should have been charged a pro-rata calculation, from 1 April to 18 August.
Following a consultation with the Commissioner, the FSA has agreed to allow the IFA to repay the balance of the fees in affordable instalments, based on the IFA’s proof of limited income.
Tags: Complaints Commissioner, debt collection agency, FSA, IFA
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Tuesday, August 31st, 2010
When dealing with the issue of outstanding Commercial Rent then Landlords should look to instruct a commercial debt collection agency at the earliest possible opportunity, according to the Operations Manager of Federal Management.
Russell Jameson has stated that although the rights a landlord has when it comes to recovering commercial rent arrears have been restricted, it is still the right of the landlord to instruct a debt recovery firm such as Federal Management in order to seize goods from the property to resolve the arrears.
Mr. Jameson confirmed that, at present, you only needs to have commercial rent in arrears of a single day in order to instruct a debt collection agency to recover the amount. However, with recent changes to the Tribunals, Courts and Enforcement Act 2007 (TCE), Landlords will soon be forced to make clear their intentions and provide written notice of their plan to recover the debt.
Mr. Jameson said “Clearly, no business is able to operate without it’s premises but currently many commercial rent agreements are paid on a quarterly basis which means the commercial tenants are more likely to focus on daily, weekly and monthly outgoings first of all.”
“We find that most tenants in arrears find it quite simple to forget about their next quarterly rent payment but this dangerous action can lead to issues for all parties concerned.”
Mr. Jameson did emphasis, however, that although new legislation had removed distress, the rule that permits seizure of a property by landlords, it had not removed the landlord’s right to recover debt through the value of the defaulter’s property.
Continuing, he said, “All that has really changed is that the process now takes a little longer to complete and that the relevant certifications must be acquired in order to act which is even more of a reason to act as early as possible.”
“Clearly, Landlords should not be victimised and be the last to receive what is owed to them, they should be at the head of the queue and should not be made to feel guilty about collecting their outstanding rent.”
Tags: arrears, commercial rent, debt collection agency, federal management, landlords
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Friday, August 27th, 2010
Students may soon be confronted by debt collectors on their doorsteps.
A source inside the Ministry of Social Development has told The Wellingtonian the Government is considering using private debt collectors for collecting outstanding student loans.
Revenue Minister Peter Dunne has denied the claim, saying it would only apply to students living overseas.
The Government has engaged consultant company Burleigh Evatt to research private debt collection practices, and has also discussed creating a student finance company to manage the collection of student loans.
Last year in the Student Loan Annual Report, the Government recorded 30 per cent of student loans as an expense, given that they were unlikely to be repaid.
The Wellingtonian requested more information from several government ministers and departments about how the changes to student loans collection would work, but they proved extraordinarily evasive.
Questions about the proposal were sent as Official Information Act requests to Tertiary Education Minister Steven Joyce, Finance Minister Bill English, Social Welfare Minister Paula Bennett, the Treasury and the Inland Revenue Department.
All acknowledged receipt of the request except Ms Bennett’s office.
Mr English’s office informed us its request was being transferred to Mr Joyce and this was followed by the Inland Revenue Department transferring its request to both Mr Joyce’s and Ms Bennett’s offices.
The Treasury transferred the request to Ms Bennett and Education Minister Anne Tolley’s offices, neither of which acknowledged the request.Each time the request was transferred The Wellingtonian was told there would be another 20-day wait for a response.
When the 20 days to respond had expired, the only response we received from the Government was yet another transfer. Mr Joyce transferred the request at the last minute to Ms Bennett’s office.
Initially, when The Wellingtonian told Mr English’s office that we would be running a story on student loans, the office denied any talks about privatisation had taken place. Later that day Mr English’s spokesman demanded the right to comment before we published.
When we subsequently offered Mr English the chance to comment last Friday he declined and referred us to Ms Bennett. She also declined to comment, saying her office had never received the Official Information Act request. On Monday she then passed us on to Revenue Minister Peter Dunne.
Mr Dunne provided a brief written response to our inquiries about administration of the student loans on Tuesday.
“The Government aims to improve services,” he said. “Part of that includes the efficient administration of student loans and ensuring that all loan borrowers repay their loans in a timely manner.”
Mr Dunne denied the Government was planning to create a private student loan company, but said private debt collection practices might be used to collect from overseas borrowers.
“Regularity of payments tends to slip especially when borrowers move overseas,” he said.
“To improve the efficiency, officials have been investigating a number of options, including the possibility of private debt collecting.”
WHAT HASN’T BEEN CONFIRMED
These are the questions which have still not received full answers:
- What is the share structure of the proposed student finance company?Will it be state-owned, privately-owned or a mixture of both?
- How will the shares be issued?Will they be offered to the public?
- Has a preferred owner been established? If so who? Or would ownership be split between banks?
- Would the student finance company be empowered to deduct money directly from an employee’s pay or would the Inland Revenue Department still collect it?
- When is the proposed student finance company expected to take over student loan collections?
Additional questions were also sent to Ms Bennett’s office last Friday. They were:
- Will the payment exemption for low-income earners continue?
- Will the company have the same power to impose late payment penalties and penalty interest as the Inland Revenue Department?
- Will the company be able to seize property or other assets?
- Will the company be able to restrain the travel of people with student loan debts?
Tags: debt collectors, dtudent loans, new zealand, students, Welingtonian
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Thursday, August 26th, 2010
It has been reported that London financial services firm, St James’s Place, has launched a High Court claim against its former partner, Peter Carron.
The claim is part of debt collection proceedings to claw back a £184,000 loan, according to a report on industry news site, Citywire.
Carron is the owner of collapsed brokerage, Primrose Associates, which was placed into liquidation in June of this year, along with Evaluate Technologies, which was also owned by Carron.
The companies folded with £4 million of client money feared missing, as reported on Debt Management Today at the time.
St James’s Place has since offered £2 million in compensation to Carron’s clients, although a spokesman for the firm stated that this was unrelated to the debt collection process for the £184,000 loan given to Carron.
City of London Police are still probing the collapse of Primrose, and how client money came to be lost. Last month a 41 year-old man from South East London was arrested on suspicion of fraud, as part of the investigation into Primrose.
Some reports have said this man is believed to be Carron. Police have now released him on bail.
Tags: debt collection, high court claim, london financial services, peter carron
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Tuesday, August 24th, 2010
If you are an Arizona citizen who owed money for power, gas or water then chances are that you will be, or will have, had contact with a debt collection agency.
As the Cities of Arizona struggle for cash, they claim that their staff lack the necessary skills and resources, not to mention time and expertise, to track down and chase outstanding accounts. By outsourcing to debt recovery companies the cities say that it will help to keep utilities costs down.
Last year the city of Mesa outsourced it’s delinquent accounts to a debt collection agency and recouped $1.4million while Peoria has been outsourcing to debt collectors for eight years.
The utility billing and revenue manager for Surprise says the city started using a collection agency and recovered 32 percent of past-due water and sewage bills.
Tags: Arizona, debt collection, outsourcing, utilities
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