NEWS...
MoJ Targets Firms 'Buying' Debts
The MoJ has urged debt collectors not to deal with claims management companies that state they have purchased debts from consumers.
Jan Farenden, deputy head of claims management regulation at the MoJ, told delegates at the recent CSA conference that debtors are not allowed to sell on their accounts, despite increasing suggestions from some claims companies that this is a legitimate process.
Farenden explained: "The sale of debts by the debtor is something that is not provided for in law and any business doing that is breaking the law."
The MoJ is currently working with the OFT to tackle firms that make misleading claims through marketing and advertising campaigns about purchasing debts. This year, the department has cancelled the authorisation of 31 financial services claims management companies for compliance failures. The companies are then banned from providing regulated claims management services.
The department also cancelled the authorisation of Credit Card Killer, which offers to cancel clients' credit agreements by buying their debt from them.
However, Basil Rankine, who owns Credit Card Killer with his wife Amanda said this was because certain information was not supplied. He added: "We would like the MoJ to educate us as to how our business practice is breaking the law. We would like the department to show us the legislation that applies."
Leigh Berkley of Tessera added: "These transactions are often illegal and are therefore excluded by the terms of the orginal Credit Act. We think it is a despicable exploitation of naive consumers and we are glad the MoJ and OFT have taken action to stamp out this unethical and unsavoury practice.
Original article courtesy of Credit Today.
