Page 1 of 2 12 LastLast
Results 1 to 25 of 45

Thread: Questions are growing about a possible bubble in the debt industry.

  • Share
  • Thread Tools
  • Display
  1. #1
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Questions are growing about a possible bubble in the debt industry.

    There is an interesting article in The Times Business section today about a possible debt bubble within the Debt Collection Agencies. Seems ironic!

    Search, using your favourite search engine, - The Times with "Questions are growing about a possible bubble in the debt industry"

    It claims financial experts are worried about the expansion of the debt purchasing industry is creating a bubble that will soon burst.

    They say that most of these 'toxic' debts have scant paperwork; time barred or belong to the poorest sections of our society. Therefore, they will find realising these potential assets will not work. That is they will have difficulty getting the money. Since these DCAs have borrowed heavily to purchase their port folios they will soon run into financial trouble.

    It goes on to say that these companies have become more aggressive ( and in a lot of cases illegal) in their activities to collect on these debts. They list some of the complaints inc. spitting in envelopes sent out to people. Yuck!

    Cabot, Lidorff, Intrum, Arrow, Hoist, Lowell are amongst some of the names mentioned as having unstable business models.

    Hedge fund managers are worried a lot of these companies will go bust.

    I wonder what will happen to all the debts purchased?

    sidley

  2. #2
    warwick65's Avatar

    VIP Member



    Joined
    Feb 2017
    Posts
    2,079
    Mentions
    139 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    As the Times is behind a paywall i will see if I can find a copy and scan it
    Any advice or opinions I offer are based on my experience dealing with personal debt as well as other life events.
    I have no formal legal training
    Any advice is offered without liability
    If in doubt take professional legal advice or contact the CAB

  3. #3
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Hi Warwick,

    I have a copy I can scan, just worried about the copyright laws?

  4. #4
    wales01man's Avatar

    VIP Member



    Joined
    Jan 2012
    Posts
    6,593
    Mentions
    54 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Will we lose sleep if some of these companies go bust?

  5. #5
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    The article states that the financial authorities are worried about another sub-prime loan collapse, although not on the scale of Northern Rock or Lehman Bros. The scale of these companies is too small to bring about another financial collapse.

  6. #6
    warwick65's Avatar

    VIP Member



    Joined
    Feb 2017
    Posts
    2,079
    Mentions
    139 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    The Times .pdf

    Page 1 is the article and pages 2 and 3 show the 'behind the story'

    Sorry for the poor scanning, if anyone can do a better job be my guest
    Any advice or opinions I offer are based on my experience dealing with personal debt as well as other life events.
    I have no formal legal training
    Any advice is offered without liability
    If in doubt take professional legal advice or contact the CAB

  7. #7
    warwick65's Avatar

    VIP Member



    Joined
    Feb 2017
    Posts
    2,079
    Mentions
    139 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Interesting though how the Times reports incorrectly about Limitations - it was a view expressed to me several years ago by a DMC.

    They say 'If a lender does not contact a company for six years the debt can be deemed unenforceable'

    This, as we know is not the case- they can write every week if they so wish but it doesn't stop a dent becoming SB
    Any advice or opinions I offer are based on my experience dealing with personal debt as well as other life events.
    I have no formal legal training
    Any advice is offered without liability
    If in doubt take professional legal advice or contact the CAB

  8. #8
    Amethyst's Avatar

    Site Owner



    Joined
    May 2007
    Posts
    60,767
    Mentions
    1819 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Same old same old...
    Attached Thumbnails Attached Thumbnails Cabot SB.png  
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

    Find Solicitors offering fixed fees on our sister site - JustBeagle.com

  9. #9
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Thanks Warwick,

    What are the exact rules about SB is it just last payment made?

    sidley

  10. #10
    warwick65's Avatar

    VIP Member



    Joined
    Feb 2017
    Posts
    2,079
    Mentions
    139 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Quote Originally Posted by sidley View Post
    Thanks Warwick,

    What are the exact rules about SB is it just last payment made?

    sidley
    Sadly much more complicated than that and we could talk for a month about what is the cause of action.

    However it is 6 years from the cause of action, but that is reset by any payment or written acknowledgement of the claim.

    Many debt purchasers argue the cause of Action is the default date (or remedy date from the DN) which may or may not be correct
    Any advice or opinions I offer are based on my experience dealing with personal debt as well as other life events.
    I have no formal legal training
    Any advice is offered without liability
    If in doubt take professional legal advice or contact the CAB

  11. #11
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Many debt purchasers argue the cause of Action is the default date (or remedy date from the DN) which may or may not be correct
    Presumably, the one from the original creditor? Selling it to a DCA does not restart the clock?

    sidley

  12. #12
    beaconsman's Avatar

    Senior Member



    Joined
    Jan 2015
    Posts
    264
    Mentions
    5 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Indeed, one of my discontinued claim, has two dates on it, 2012 and 2013..like plucking things out of thin air. Today I have put together a letter to have the original default removed..see what happens..

  13. #13
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    @ beaconsman.

    Good luck.

  14. #14
    warwick65's Avatar

    VIP Member



    Joined
    Feb 2017
    Posts
    2,079
    Mentions
    139 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Hi Sidley

    No selling it to the creditor, or sending a cca request does not reset the clock

    It would take a written acknowledgement or a payment to reset the clock which is always my personal worry about engaging too much with a creditor or trying for misselling with a PDL or reclaiming PPI


    Remember that the default date on a credit report does not necessarily correspond with the default date of a DN
    Any advice or opinions I offer are based on my experience dealing with personal debt as well as other life events.
    I have no formal legal training
    Any advice is offered without liability
    If in doubt take professional legal advice or contact the CAB

  15. #15
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Thanks Warwick


    sidley

  16. #16
    Debt Camel's Avatar

    VIP Member



    Joined
    Jun 2014
    Posts
    1,281
    Mentions
    297 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Quote Originally Posted by beaconsman View Post
    Indeed, one of my discontinued claim, has two dates on it, 2012 and 2013..like plucking things out of thin air. Today I have put together a letter to have the original default removed..see what happens..
    why on earth do you want this default date removed? then the debt, with the arrears, will stay on your credit record for ever! Think twice before you decide this is really a good idea.

  17. #17
    beaconsman's Avatar

    Senior Member



    Joined
    Jan 2015
    Posts
    264
    Mentions
    5 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Why will it stay on forever, i meant the entire entry be removed as it is not a true and accurate record. The debt has been written off, the balance shows zero, amount owing, is zero. I have the letter of discontinuance and the wording on the letter says it is no closed. Noddle agreed as I disputed the entry, it is now closed but lowlifes continued entering it up to feb 2016.

    I want it removed as it is the only thing stopping a remortgage application.

  18. #18
    Debt Camel's Avatar

    VIP Member



    Joined
    Jun 2014
    Posts
    1,281
    Mentions
    297 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    OK, asking for the debt to be removed is fine - asking for just the default to be deleted wouldn't be!

  19. #19
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    A bit more on the Cabot float in todays Times business section, In the penultimate paragraph I'm sure it should read that Cabot estimate their equity at 5x what other traders think, as was in the Times a few days ago.
    Attached Thumbnails Attached Thumbnails cabot float.jpg  

  20. #20
    Amethyst's Avatar

    Site Owner



    Joined
    May 2007
    Posts
    60,767
    Mentions
    1819 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Apparently ....




    Ahh

    Attached Thumbnails Attached Thumbnails 2017-11-16 14_49_57-Start.png  
    “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

    Any advice I provide is given without liability, if you are unsure please seek professional legal guidance.

    Find Solicitors offering fixed fees on our sister site - JustBeagle.com

  21. #21
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    I thought they would pull out.

    How can you value assets of piles of delinquent consumer debts, bought from organisations, that presumably would collect on the debt if they stood a chance, when you have no idea how many you'll be able to collect. The face value of the assets may be 1 billion but how much are they worth?
    Last edited by sidley; 16th November 2017 at 15:26:PM. Reason: spelling

  22. #22
    sidley's Avatar

    Member



    Joined
    May 2013
    Posts
    69
    Mentions
    0 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Encore Capital Group which owns the subsidiary Cabot says this about itself today!!

    Encore Capital Group is an international specialty finance company that provides debt recovery solutions and other related services for consumers across a broad range of financial assets.

    Through its subsidiaries around the globe, Encore purchases portfolios of consumer receivables from major banks and credit unions.

    Encore partners with individuals as they repay their debt obligations, helping them on the road to financial recovery and ultimately improving their economic well-being.


    Really, .....improving their economic well-being..... so that's what the threatograms are for; improving their lives!!

  23. #23
    Onestepatatime's Avatar

    Member



    Joined
    May 2017
    Posts
    144
    Mentions
    1 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    Thanks for this peach of a thread, what an uplifting present prior to Chrimbo!

    I'm just surprised it's taken this long for them to realise!

  24. #24
    thedirtyhound's Avatar

    Junior Member



    Joined
    Oct 2017
    Posts
    26
    Mentions
    1 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    The problem facing these companies is that bank lending has got a lot tighter over the last few years, so far fewer people are able to take out big sums of credit.

    Given that the lending criteria are stricter, less people are likely to default. For those that do, it will be most likely down to a change in circumstances, ie divorce, redundancy, illness, etc, in which case even though they have defaulted on the sums borrowed, they may be unable to pay back the money. The debts that do go bad are likely to be more toxic.

    One way to put the debt purchase firms out of business is simply to make them work very hard for their money. If they write to you, don't ignore the letter. Answer it and put them to as much trouble as possible. If every case they pursued ended up in court, they wouldn't have enough staff to attend the hearings or enough money to pay the fees.

    The recent change in pre-action protocols for civil claims won't help them either, for they are now expected to be able to provide information upon request prior to issuing claims. Many people on this forum have experienced difficulty in getting documents (ie copies of credit agreements, statements, notices of assignment, etc) even after they have received a claim. That, at least theoretically, should no longer happen.

    So even if you are the sort of person who has kept everything, should one of these companies come after you, ask them for all the documents, even if you have them already.

    For one old account of mine I requested a copy of the original agreement on three occasions and got three different items. Finally they dug up a scanned copy of the original, but it is totally illegible. They could never take me to court on that, but it didn't stop them from trying to trick me.

    Some of these firms will undoubtedly go bust in the near future, but as with the banks a few years ago, some of the stronger ones will take over the business of the weaker ones to preserve the "credibility" of the industry. But they will be taking over toxic debt and it will only be a matter of time before the industry as a whole ceases to exist.

    The days of the DPCs and credit management companies are coming to an end.

    YIPPEE!

  25. #25
    EXC's Avatar

    Site Owner



    Joined
    Jul 2007
    Posts
    18,442
    Mentions
    145 Post(s)

    Default Re: Questions are growing about a possible bubble in the debt industry.

    From today's Times:

    https://www.thetimes.co.uk/edition/b...loat-6snmf9dfq

    Britain’s biggest debt collector has pulled its plans for a London flotation, blaming poor and volatile market conditions amid claims it was overvalued.

    In what would have been one of the market’s biggest listings of the year, Cabot Credit Management had hoped to complete the pricing of its shares this week. Yesterday it said that moving forward with the initial public offering “would not be in the best interest of the company or its shareholders”.

    Cabot buys debt owed by consumers who, for example, cannot pay their mobile or credit card bills from banks at a discount and then seeks to collect the outstanding payments. It had intended to raise £195 million through the flotation, which its private equity owners had hoped would value the company at about £1 billion.


    However, market sources said that it had become clear within the last 24 to 48 hours that Cabot would not be able to sell the shares, with only about 40-50 per cent of the book covered by orders at the lower end of the £830 million and £981 million pricing range.

    The Times understands that a number of institutions had declined to buy any shares or had sought to buy a smaller quantity, spooked by concerns about the health of the UK consumer market and wider market volatility.

    One trader said: “Everyone we went to see at the moment is telling us ‘I don’t like buying UK consumer stuff right now’. I don’t like the headlines [on consumer debt] and we own a bunch of Arrow Global right now anyway.”

    Shares in Arrow Global, the closest listed peer to Cabot, have fallen 14 per cent over five sessions of trading and one fund manager warned this week of a “lack of momentum”. Those who believed that the £830 million bottom end of Cabot’s range “looked OK” were “surprised by how badly Arrow is doing”, the source said.

    The cost of credit protection for Lowell, another unlisted debt collector, has risen 30 per cent in the past two days as concerns about the long-term health of the sector has risen.

    The Times reported earlier this week that questions were being raised about Cabot’s estimated £1 billion value. Critics claimed that Cabot’s costs of securing its “estimated remaining collections” from defaulted consumers could be much higher than it anticipated meaning its collections could be much lower in the coming years.

    Hedge funds, including some which are already shorting the shares of Arrow Global and Intrum Justitia, a European listed debt collector, suggested that Cabot’s equity could be worth only as much as £200 million.

    Ken Stannard, chief executive of Cabot, said: “The high level of engagement and interest that we received from a wide array of investors was very encouraging but the timing has been unfortunate with respect to IPO market conditions.”

    Cabot is owned by JC Flowers, the US private equity firm, and Encore Capital Group, a debt management and recovery business that is quoted on Nasdaq and whose shares fell 10 per cent in early trading on the news.

    Ashish Masih, Encore’s president and chief executive, indicated last night that Cabot may still be listed in future.
    Analysis

    Debt collectors put on notice as Cabot float sinks


    It would appear as if, for now, London’s stock market is only big enough for one debt collector — and it isn’t Cabot Credit Management (Deirdre Hipwell and Callum Jones write). The plans of Britain’s largest collector to float were dashed after a combination of market turbulence, concerns over the proposed valuation and the volatility of Arrow Global, the only London-listed peer, hit demand for its shares.

    Cabot’s failed £1 billion float also comes amid a period of uncertainty where Arqiva, the mobile mast company, had to pull its float recently and Bakkavor, the food group, only succeeded in listing after dropping the asking price to 180p a share, from an earlier guidance of 195p to 235p.

    One equity capital markets expert said Cabot had clearly been hit by “a bit of volatility, plus downward pressure on valuations, and this is a sector which also struggles on the ethical side too [with some investors] — I would say it was a combination of all three factors”.

    Cabot, which is owned by JC Flowers and Encore Capital Group, has indicated that it could look to list again but its failed float and declining sentiment about debt collectors could raise wider questions about the long-term health of the sector.

    Specialist investors have been warning of a bubble in the market for the debts of poorer borrowers, pointing out that in the past five years €14 billion has been raised through the European public debt markets to finance the purchase of non-performing loans. Critics say that if it becomes harder, and more expensive, for debt collectors to collect loans then servicing and refinancing their own debt piles could become extremely difficult. This could be even more pronounced if collectors’ access to Europe’s high yield debt market is restricted or cut off.

    One hedge fund investor said: “Recent figures showed that 50 per cent of UK adults could not absorb an increase in costs of £100 a week, [indicating] that if there is a slowdown from Brexit it could become very hard to collect.”

    Cabot has a debt pile of £1.1 billion but no debt that matures before 2020. Another market source said: “If Cabot can’t IPO, far more indebted debt collectors will become zombies for their private equity owners.”

    I like your pin shot
    I keep it with your letter
    Done up in blueprint blue
    It sure looks good on you
    And when you smile for the camera
    I know I'll love you better

    Then the shutter falls
    You see it all in 3-D
    It's your favorite foreign movie

    'Peg'

    Donald Jay Fagen


Page 1 of 2 12 LastLast

Similar Threads

  1. Protect You Bubble mobile phone insurance
    By pianoman in forum Welcome Forum
    Replies: 1
    : 4th December 2011, 22:14:PM
  2. OFT reminds debt management industry not to use misleading names
    By Legal Beagles in forum Office of Fair Trading (OFT)
    Replies: 0
    : 2nd December 2010, 11:40:AM
  3. Replies: 2
    : 28th September 2010, 07:16:AM
  4. An independent review of the fee-charging debt management industry
    By Amethyst in forum Debt Management Plans
    Replies: 1
    : 1st August 2009, 08:11:AM
  5. Halifax confirms housing bubble is bursting
    By Legal Beagles in forum News and Information
    Replies: 0
    : 6th September 2007, 02:40:AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Contact Us



© Celame (UK) Ltd 2017
LegalBeagles® are DPA Registered No. ZA158014
LegalBeagles® is the trading name of CELAME (UK) LIMITED ( 09220332 )
Registered Address: 25 Moorgate, London, England, EC2R 6AY
VAT registration number 206 9740 02
User Alert System provided by Advanced User Tagging v3.1.3 (Lite) - vBulletin Mods & Addons Copyright © 2017 DragonByte Technologies Ltd.
Feedback Buttons provided by Advanced Post Thanks / Like (Lite) - vBulletin Mods & Addons Copyright © 2017 DragonByte Technologies Ltd. Runs best on HiVelocity Hosting.
Celame (UK) Ltd Powered by vBulletin® Version 4.2.3
Copyright © 2017 vBulletin Solutions, Inc. All rights reserved.

To find out more about managing your money and getting free advice, visit the Money Advice Service,an independent service set up to help people manage their money.

TOP