Statute Barred Debt Chasing

[Porky]

Hi,

Interesting one this one that I'm sure some of the experienced IP can cover off/answer.

Situation is that an individual had a personal credit card debt of £5k with Trust Card from years ago we are talking 12-15 years ago. She went through hard times, etc but ultimately, the debt wasn't re-paid. No CCJ but the credit card coy probably thought zero chance with all the other creditors at that time and gave up. No further action, debt no longer on credit file.

Wind the story on north of ten years since these events, the debt is sold on at least two or three times and the debt is now £9k

Now a company called Resolvercall has brought the debt and is constantly writing, phoning and texting having traced her requesting that the individual make contact to arrange a repayment plan. All this time the individual is not communicating and apparently they sent an agent to the individuals house, again the individual refused to engage. This is borderline harassment.

My advise was that the debt is over 15 years old, no communication and is Statute Barred. I advised them that if the agent returned to:-

* Tell them is statute barred and to go forth and multiply
* Tell them to cease and desist all calls and contact with immediate effect
* Stop calling round as it was now considered harassment
* They don't have their permission to turn up un announced
* Report the conduct to the FCA if they continue

Anyone got a view on this? I don't see how this outfit Resolvercall can possibly do anything to recover this debt?

I did some searches on the company and the feedback not great but parking that to one side how else should this be dealt with? Is their anything else they can do?. Am i missing anything here?

The individual is frightened to call this company for fear of it being deemed that they are engaging and acknowledging the debt in anyway and restarting the clock?
Frankly i consider it harassment.

Any thoughts?

 

[ChrisCallaghan]

Assuming the original creditor hasn't won a CCJ or other form of judgement in the past, this sound like it is well in statute barred territory.

The below link to SrepChange provides a useful summary and, more importantly, a template letter for your friend to use.

Statute Barred Debt & Debt Recovery. StepChange

 

[JEREMY HAWKE]

Tell them to sling their hook
They had ample opportunity to attempt to recover this debt in the past and failed to do so
If you explain the debt is SB they are not allowed to chase it further

 

[MBE2017]

Tell them to sling their hook
They had ample opportunity to attempt to recover this debt in the past and failed to do so
If you explain the debt is SB they are not allowed to chase it further

I’m afraid Jeremy is wrong on this. If a debt is statute barred the company cannot take your “friend” to court in an attempt to recover the debt. That does not mean they are unable to contact your “friend” and ask for payment.

Just tell them to ignore them and not respond, except for using the suggested step change letter as long as they are sure the debt is statute barred.

 

[Porky]

Thanks to both @Chris Callaghan and @JEREMY HAWKE for taking the time out to reply.

Noted and appreciated - Thanks guys

 

[Newchodge]

The individual is frightened to call this company for fear of it being deemed that they are engaging and acknowledging the debt in anyway and restarting the clock?

This^^

The debt exists but legal action to recover cannot be comenced as there has been no activity for 6 years+. Any acknowledgment of the debt may be used to reset the 6 years.

I would write stating that the individual has never heard of the debt, denies any and all liability and that further contact will be deemed harassment and appropriate action taken.

 

[kulture]

This^^

The debt exists but legal action to recover cannot be comenced as there has been no activity for 6 years+. Any acknowledgment of the debt may be used to reset the 6 years.

I would write stating that the individual has never heard of the debt, denies any and all liability and that further contact will be deemed harassment and appropriate action taken.

I have to disagree, I think that it is a bad idea to lie on a letter . A previous post has suggested a better letter

https://www.stepchange.org/Portals/0/documents/info/Statute-Barred-Template-Letter.pdf?ver=2016-04-14-162947-590

Alternatively get proper advice from a solicitor.

 

[Solvelaw]

As long as there has not been any resetting communications in 6 years, the 6 year limitation defence applies. I would advise writing a letter that person believes that there has been no notices received in last 6 years and therefore it is statute barred. Now the issue could be they show that various notices at various times have been sent (even if not received), then I am afraid, the limitation defence is unlikely to apply.

 

[Newchodge]

As long as there has not been any resetting communications in 6 years, the 6 year limitation defence applies. I would advise writing a letter that person believes that there has been no notices received in last 6 years and therefore it is statute barred. Now the issue could be they show that various notices at various times have been sent (even if not received), then I am afraid, the limitation defence is unlikely to apply.

Can the resetting communication come only from the creditor? I thought there had to be acknowledgment of the debt from the debtor (or their agent).

 

[Solvelaw]

naturally only a creditor will have a basis to send notices, it could be original or successor (assigned) creditor. It is by notice so not acknowledgement is required. No debtor acknowledgment will not prevent enforcement within the limitation period.

 

[kulture]

What kind of notice do you mean? I thought that a letter or basic demand did not count. I was under the impression that the creditor had to at least start the court order process. It would be nice to know the specifics of what counts as a notice that re-starts the six year clock.

 

[Solvelaw]

What kind of notice do you mean? I thought that a letter or basic demand did not count. I was under the impression that the creditor had to at least start the court order process. It would be nice to know the specifics of what counts as a notice that re-starts the six year clock.

It will depend on debts, lets assume there is consumer credit debt, the act and regulations may prescribe that enforcement notices are pre-requisite for court proceedings. Outside this and generally (although some debts may have different rules), notice is normal term eg a letter bringing the attention or refreshed attention to the debtor within the period will do so. Outside this time, the debtor must deny any knowledge of it or simply state no case to answer due to limitation act 1980 defence.

 

[Newchodge]

It will depend on debts, lets assume there is consumer credit debt, the act and regulations may prescribe that enforcement notices are pre-requisite for court proceedings. Outside this and generally (although some debts may have different rules), notice is normal term eg a letter bringing the attention or refreshed attention to the debtor within the period will do so. Outside this time, the debtor must deny any knowledge of it or simply state no case to answer due to limitation act 1980 defence.

Could you, perhaps, comment on the actual scenario in this post, which relates to a debt that is at least 12 years old, no court action has been commenced and the alleged debtor is now being harassed.

 

[ChrisCallaghan]

I don't profess to be an expert in this field (ultimately I'm an insolvency advisor, not a debt dispute expert or solicitor) but my understanding is that it is about the debtor acknowledging that they owe the debt. A letter from the debtor to the creditor (like the one in the StepChange link) advising that they believe a debt is statute barred is not acknowledgement. Likewise I don't think a simple chase/demand letter from the creditor will reset the clock. It has to be formal court action, i.e. CCJ.

I think it's worth stressing that if a debt is statute barred, it does not cease to exist. The creditor just can't pursue any further legal action. I have even known creditors write to debtors, saying that they understand a debt is statute barred, but would you like to pay it? All very strange!

Also worth noting that if a creditor has taken legal action, statute barred goes out the window. E.g. with a CCJ, though it will come off a creditfile in 6 years, the judgement is still enforceable for life, e.g. escalating to High Court Enforcement, bankruptcy proceedings etc.

For OP's friend, they advised this is a credit card. In my humble opinion, if OP's friend hasn't acknowledged this debt in 6+ years, and the creditor has not previously obtained a court judgement, than the debt is statue barred. This doesn't mean that the creditor can't write to OP's friend (though most FCA reg firms will cease contact) but that they can't pursue CCJs, money orders and bankruptcy.

(disclaimer: I am not a solicitor! Above is my understanding and I'm happy to defer to someone with better experience on this subject!)

 

[Solvelaw]

Whether its more than 6 years or more than 12 either way as long as not acknowledged the debt after period (6 or 12 years), it is not going to be enforceable.
With respect to harassment, a company can be liable for this (example of Ferguson v British Gas trading and many others). I would suggest getting an injunction done unfortunately there is some cost to do doing this. Perhaps a law university law clinic could also help here for no charge. A cease and desist type letter should be sent carefully avoiding any acknowledgment of the debt.

 

[Michael Loveridge]

As long as there has not been any resetting communications in 6 years, the 6 year limitation defence applies. I would advise writing a letter that person believes that there has been no notices received in last 6 years and therefore it is statute barred. Now the issue could be they show that various notices at various times have been sent (even if not received), then I am afraid, the limitation defence is unlikely to apply.

This is simply wrong, or at least very misleading. It doesn't matter how many `notices' the creditor sends the debtor - they have no legal effect at all.

It's only if the debtor acknowledges the debt in writing that the limitation period resets from the date of that acknowledgement.

In the present case Resolvercall are just hoping the debtor is ignorant of the law, so they can exploit that ignorance. The FCA Handbook makes it quite clear that where there has been no acknowledgement of the debt the debt collector should not pursue it - (sorry, I tried to post a link, but for some reason I got a message saying it's not allowed)

Furthermore, the OFT official guidance regarding debt collection states (para 3.15 (c)):

"where businesses seek to recover debt that they know, or reasonably ought to know, is extinguished, we would be very likely to consider this an unfair or improper practice which calls fitness to hold a consumer credit licence into question."

I'd therefore recommend writing to Resolvercall and drawing their attention to this, saying that if the debtor hears any more from them they will report Resolvercall to the FCA with a vierw to having their licence revoked. That should shut them up!

 

[Solvelaw]

Michael, I am referring to notices within (and importantly not outside of limitation period) the period which ever that may be. This of course is in addition to all the consumer credit complexity which may apply and has changed over the years.

 

[Newchodge]

Michael, I am referring to notices within (and importantly not outside of limitation period) the period which ever that may be. This of course is in addition to all the consumer credit complexity which may apply and has changed over the years.

And you have completely misled those people who are trying to discuss the subject of this thread.

 

[ChrisCallaghan]

This is simply wrong, or at least very misleading. It doesn't matter how many `notices' the creditor sends the debtor - they have no legal effect at all.

It's only if the debtor acknowledges the debt in writing that the limitation period resets from the date of that acknowledgement.

In the present case Resolvercall are just hoping the debtor is ignorant of the law, so they can exploit that ignorance. The FCA Handbook makes it quite clear that where there has been no acknowledgement of the debt the debt collector should not pursue it - (sorry, I tried to post a link, but for some reason I got a message saying it's not allowed)

Furthermore, the OFT official guidance regarding debt collection states (para 3.15 (c)):

"where businesses seek to recover debt that they know, or reasonably ought to know, is extinguished, we would be very likely to consider this an unfair or improper practice which calls fitness to hold a consumer credit licence into question."

I'd therefore recommend writing to Resolvercall and drawing their attention to this, saying that if the debtor hears any more from them they will report Resolvercall to the FCA with a vierw to having their licence revoked. That should shut them up!

For the OP, @Porky this from @Michael Loveridge is the advice to take away from this thread.

 

[Solvelaw]

And you have completely misled those people who are trying to discuss the subject of this thread.

I think I agree, teaches me to rely on just memory. Please do the needful and remove anything unhelpful

 

[Bob Morgan]

This is something that is becoming a real problem! - Especially when Statute Barred Debt has been sold. I have known of quite a few instances where New Debt Owners have even attempted to 'Collect' on Extra-Territorial Statute Barred Debt!

 

[Lisa Thomas]

I haven't read all the replies so apologies if I am repeating something, but my understanding was all a creditor needed to do was demand payment and it rewinds the clock. So it debt companies have chased at least once every 6 years then it wouldn't be statute barred?

 

[Newchodge]

I haven't read all the replies so apologies if I am repeating something, but my understanding was all a creditor needed to do was demand payment and it rewinds the clock. So it debt companies have chased at least once every 6 years then it wouldn't be statute barred?

No. The debtor has to acknowledge the debt in some way to reset the clock.

 

[Bob Morgan]

No. The debtor has to acknowledge the debt in some way to reset the clock.

CORRECT! The new 'Owner' of the debt is attempting to obtain Joinder! There is no obligation to even answer the door!

 

[Solvelaw]

I haven't read all the replies so apologies if I am repeating something, but my understanding was all a creditor needed to do was demand payment and it rewinds the clock. So it debt companies have chased at least once every 6 years then it wouldn't be statute barred?

It boils down to that a cause of action can only accrue once. Limitation is there to provide a certainty for both claimants and defendants.

 

[ChrisCallaghan]

I haven't read all the replies so apologies if I am repeating something, but my understanding was all a creditor needed to do was demand payment and it rewinds the clock. So it debt companies have chased at least once every 6 years then it wouldn't be statute barred?

This is exactly how I've understood it for years Lisa, but apparently it's all about the debtor acknowledging the debt.

 

[MBE2017]

Six years is plenty of time for a company to take legal action. Any debts taken to court do not enjoy statute barring.

 

[ChrisCallaghan]

Six years is plenty of time for a company to take legal action. Any debts taken to court do not enjoy statute barring.

Especially considering how easy and cheap it is to go for a CCJ.

 

[WaveJumper]

A bit of light reading for you all when drinking your tea this afternoon:

https://www.handbook.fca.org.uk/handbook/CONC/7/15.html#:~:text=A%20firm%20must%20not%20continue,because%20it%20is%20statute%20barred.

 

[Mark T Jones]

A bit of light reading for you all when drinking your tea this afternoon:

https://www.handbook.fca.org.uk/handbook/CONC/7/15.html#:~:text=A%20firm%20must%20not%20continue,because%20it%20is%20statute%20barred.

Okaaayy .

Seems to lean towards communication rather than acknowledgement?

 

[Solvelaw]

Noting that credit card is consumer credit act 1974 regulated, this makes interesting reading, it is cause of action accruing at default notice (which are usually prescribed) before enforcement can take place

Doyle v PRA Group (UK) Ltd case summary - Shelter England

The limitation period in Consumer Credit Act cases started to run after the expiry of the default notice served on the borrower.

england.shelter.org.uk

 

[JEREMY HAWKE]

while looking this up further on Money forum a debtor had a CCJ against them this scenario where the CCJ was not acted on by the creditor ( a credit card company) at all .
The CCJ was at the time of them writing was 10 years old The debtor believed that they were completely out of the woods but there was very limited feedback or help to this.
What is their situation?

 

[Gyumri]

The debtor could apply to the county court for an order under 140b of the CCA 1974 which gives the court wide powers to even cancel a debt.

Otherwise court judgments don't seem to have a time limit.
You can also apply for a stay of enforcement under the cpr pending the outcome of the application in the county court.

Other than that don't open the door to the bailiff or alternatively make a proposal to settle the debt.
There's also the option to apply online for a bankruptcy order which would clear the debt for around £600 along with any other debts.
That could be a bargaining chip with the creditor who would then get nothing.

Others here may have better ideas......

 

[MBE2017]

I know of a case where no evidence was supplied to a court or the defendant, but a prosecution for an old credit card debt was made by a debt agency. Despite having no chance of success they went ahead, and when the defendant wrote to the court on the complete failure to provide lawfully requested paperwork, the debt agency then stayed the case.

No one seems sure if this leaves this person in danger of further prosecution, since the wording is statute barring applies if no court action occurs in six years, despite asking for written proof for over four years without any paperwork showing the agreement etc.

Statute barring was meant to allow people to move forward, as does bankruptcy, DRO’s etc, but this person could be in limbo.

 

[Porky]

UPDATED POSITION

In the spirit of supporting other members or visitors that may come across this thread I provide the following update for openness and further clarity.

The “friend” in question, as many likely guessed, was actually my wife and I was somewhat annoyed that this firm “Resolvecall” had the audacity to try and pursue her for a statute barred debt over 12 years old with a bombardment of calls, texts and ultimately a home visit to harass and cajole here into entering a new agreement and repayment terms with them.

The advice from Cindy @Newchodge post #6 and @Michael Loveridge post #16 are 100% correct and completely spot on. For clarity: -

The debt exists but legal action to recover cannot be commenced as there has been no activity for 6 years+. Any acknowledgment of the debt may be used to reset the 6 years.

AND

It's only if the debtor acknowledges the debt in writing that the limitation period resets from the date of that acknowledgement.

As Michael further points out in post #16 the firm Resolvecall are hoping that my wife is ignorant of the law so they can exploit that ignorance. Had my wife accepted that she owed the money, they could then draw up an agreement for her to repay it and she would then be back fully on for it.

As @Bob Morgan commented: -

This is something that is becoming a real problem! - Especially when Statute Barred Debt has been sold. I have known of quite a few instances where New Debt Owners have even attempted to 'Collect' on Extra-Territorial Statute Barred Debt!

Frankly, they will try it on and it’s a dam disgrace that these firms can buy up debts for a token amount in the pound and then put commission based collectors on the road to try exploit and recover. This specific firm has a history of doing this and some diabolical reviews of same. They also record visits to the targets home they claim for “training and monitoring purposes” without consent which is also in breach of FCA guidelines. They are at best intimidating.

Its a numbers game, harass enough statute barred debtors years later in the hope that a percentage will give them money making it a lucrative business for them.

ACTION TAKEN

I actually went for a hybrid response in writing: -

• Never heard of the debt, deny any and all liability
• Not invited to my home, you are never to visit again, I do not give permission or consent.
• You reference Lloyd’s bank, yet my current provider is different who I have been with for 12 years hence you are referencing something that would be statute barred in any event.
• Stop, cease, and desist all calls and contact with immediate effect.
• Any further contact will be deemed as harassment and will be reported to the FCA with a view to having your license revoked.

RESULT / OUTCOME

As a result of the above the firm have responded that:

• They apologise for any inconvenience.
• Resolvecall is no longer dealing with this file which was returned to their client.
• There will be no further contact from Resolvecall regarding this matter.

So, job done, they got the message, problem sorted, and they know we will not fall for their antics. I just now feel sorry for others that are oblivious to the law and get taken in by these charlatans.

There are others doing the same practice and i guess in these tough economic times, there will always be someone prepared to work on commission deals visiting people with the view to getting cash out of them regardless of how unscrupulous the practice may be.

My thanks to all that contributed to this thread.

Pork’s

 

[Michael Loveridge]

That's great news, and proof that this forum does actually do a lot of good at times.

 

[WaveJumper]

That's great news, and proof that this forum does actually do a lot of good at times.

Yes a result, but lets be a bit controversial for a moment OP and I quote says above "never heard of the debt, deny any and all liability" but in fact we know there was a debt. Maybe they have used and I quote from OP "visiting people with the view to getting cash out of them regardless of how unscrupulous the practice may be" but can we actual blame them for trying, plenty of threads on the forum where members are chasing people for money....... if the boot was on the other foot.

For those chasing debt the lesson here is don't let the situation become statute barred as you face little prospect of a recovery.

 

[MBE2017]

UPDATED POSITION

There are others doing the same practice and i guess in these tough economic times, there will always be someone prepared to work on commission deals visiting people with the view to getting cash out of them regardless of how unscrupulous the practice may be.

My thanks to all that contributed to this thread.

Pork’s

I used to do work for the five main debt agencies up to approx seven years ago, and if I got sent a debt of such age I used to simply post it back. I rarely bothered with any debt over five years of age, since getting such an old debt into court was very hit and miss, and wouldn’t have benefited myself re commissions.

The old doorstep collectors only got paid on results, so statute barred debts were just a load of hassle, and there was never any shortage of work. Today doorstep collecting has all but died out, these days you might get a visit with a request to talk to the office, since no one can trust verbal communications today, at least a phone call can be recorded for both parties protection.

Lets hope this is the end, but warn your wife she might get contacted in the future but to simply not engage with the person, they will soon give up.

 

[Porky]

@WaveJumper you comment:

but can we actual blame them for trying, plenty of threads on the forum where members are chasing people for money....... if the boot was on the other foot.

Obviously, welcome all view points but the entire thread I posted is regarding a “Statute Bared” debt. It was originally a £4,000 TSB trustcard debt that had been sold on at least three times in over 12years, closer to 15 yrs.

We have statute Barred as a legal framework for a reason. Six years is plenty long enough to recover a debt.

I would say, yes a debt is a debt and should be repaid. However, in this specific case, the originator with the debt TSB Banks credit card division Trustcard had the debt on their books, they tried to collect in the original six years, didn’t and ultimately wrote it off.

Come to present day, my wife’s circumstances have materially changed since. But the debt is no longer TSB Trustcard, not even sure if Trustcard still trades? It is now a third company that has brought debts so in effect even if they were repaid, that money is lining their pockets not benefiting TSB Bank. This firm makes a profit out of chasing debts that are now theirs because they paid a penny in the pound for them and gets success from harassing people oblivious of the law, some of these people could be old, vulnerable, disabled, on the breadline, not in a great position. I guess it is your own moral compass to decide if that is a good ethical business practice or not?

So my take and possibly many others here in the current cost of living crisis can take comfort in knowing that if faced with this situation, the above steps will most likely remedy the situation. The debt is not enforceable uless you acknowledge it and agree terms, hence they can go forth.

If you are a business trying to enforce collection of a debt, make sure you do it within the time limitations.

So in answer to your point, yes I do blame them. I would actually go a step further and say it’s a totally disgusting activity to engage in this kind of shoddy business practice to attempt to extract money in this way via exploitation but you are welcome to a different viewpoint.

Good luck

 

[Gyumri]

I would actually go a step further and say it’s a totally disgusting activity to engage in this kind of shoddy business practice to attempt to extract money in this way via exploitation but you are welcome to a different viewpoint.

So if I lend you £5000 and then when the time comes to repay you blow a raspberry or if you fail to deliver what I have bought then according to your logic it's my hard luck for trusting you in the first place.

My debt is statute barred but I can surely still plead for you to repay me without being called a disgusting person for doing so.

If a debtor can't pay his debts who has to suffer?

There is little a creditor can do other than plead for his money if he hasn't taken legal action within six years which provides a lot of protection for a debtor. All the debtor needs to say is sorry I don't owe the debt have a nice day but some debtors will be tricked into making a token payment or accepting the debt in which case the clock resets but that's because the debtor is not aware of the protection which the law has already provided.