Loan with a debt collection agency

spring2020

Registered User
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15
Scenario:

Student loan, over 4 grand. Wasn't able to keep up the payments and instead of entering a payment plan - I paid bits and not enough and only what I could at the time, not understanding it and the balance was moved to a debt collection agency.

Paying it off the past few years. It was finally getting below 1000 and next thing it jumped back up by 2 grand a few months ago just when I was seeing the light.

I queried what was going on and was advised this was the interest from the debt with the bank even though it with a collection agency. The bank apparently notified them that I now owe an additonal +2k in debt.

I am looking for generic advice.

Thank you
 

tomdublin

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78
I'm not an expert on this but it sounds strange that the bank would continue to charge interest after it has offloaded the loan to the collection agency. You should ask for a statement and then get independent advice.
 

spring2020

Registered User
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15
Ask for a statement.
But interest is charged on loans.

And if you let it run, the interest will accumulate.

Brendan
Thanks Brendan. I will do this. I know it's my fault for not paying the debt back, being a silly teenager at the time thinking it was great to have the loan at the time. I thought the fact it was passed to a collections company, they would have assumed they wouldn't be getting the funds back. I wonder if they could see I was close to paying it all off that they added the interest?!
 

spring2020

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I'm not an expert on this but it sounds strange that the bank would continue to charge interest after it has offloaded the loan to the collection agency. You should ask for a statement and then get independent advice.
The debt collection agency advised the interest came from the bank so they were adding it on. I think that's what I will do. Admittedly it's my fault for defaulting but as it was a student loan, I also understood it to be interest free!
 

cmalone

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Do a gdpr request with bank.

Fortunately multiple episodes with bank of ireland which resulted in balances being waived / written off.

They discovered errors when asked for records - student loan , credit cards etc

total of errors in household amounts to over 4,000 euro...

similar to you -they referred two accounts to debit collector - Cabot financial. The debt collector closed file and withdrew complaints when they realised bank had failed to provide basic records of accounts.
 

tomdublin

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The debt collection agency advised the interest came from the bank so they were adding it on. I think that's what I will do. Admittedly it's my fault for defaulting but as it was a student loan, I also understood it to be interest free!
As far as I know the way it works is that the bank sells the debt (including accumulated interest) to the collector at a discount. Once that has happened the bank doesn't own the debt anymore and therefore cannot charge any further interest on it. It could be that the debt collection agency is chancing its arm by adding "interest" in its own right. You should take advice on this (especially on how it affects your credit record) but if the debt is unsecured ignoring the collection agency might be the best solution. Initially the agency will try to intimidate you. After a while they will offer you a deal involving partial debt write-off. If you ignore that they will eventually just go away.
 
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RedOnion

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As far as I know the way it works is that the bank sells the debt
Not always. Different banks have different approaches.

The quickest way to find out is to do a credit register request, and it'll show who the money is owed to (or if it's been written off).
 

cmalone

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In many cases the ‘sold debt’ is actually not valid and has been subject to previous dispute with the bank. If this is the case with your’s then there is a good chance debt collector will drop if you put them under pressure.

Also recall reading posts on here where debt collector settled for much lower amount than actually owed.
 

TLO

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It was finally getting below 1000 and next thing it jumped back up by 2 grand a few months ago
To make the maths easy let's assume an interest rate of 10%, which is reasonable for a student loan. A balance of around €1,000 would attract annual interest of around €100. The balance jumping up by €2,000 suggests 20 years of interest being applied, which doesn't appear realistic. More likely, the bank and/or the collection agency has made a mistake, or worse, is chancing their arm. This is well worth disputing. The contract was with the bank so maybe start there by asking for duplicate statements going back to when the loan account was created.
 

elcato

Moderator
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3,453
I queried what was going on and was advised this was the interest from the debt with the bank even though it with a collection agency. The bank apparently notified them that I now owe an additonal +2k in debt.
How did you query it ? If by phone write to them and ask for written details. how did you know you were down to less than 1k ? Again if by phone ask for written statement. I suspect they are chancing their arm. Do not engage with them by phone ever, always politely tell them you will correspond by mail only if they ring.
 

cmalone

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460
No harm contacting them by phone - it will be recorded. You can follow up by email and post , as appropriate
 

tomdublin

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I'd recommend you contact MABS for help with this. Their service is free and they have an excellent reputation and I'm sure they know all the ins and outs of dealing with debt collectors. It would probably be best for you to do this before any further contact with the collection agency.
 

spring2020

Registered User
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15
“T267 Correction - If the customer has any queries regarding these please direct them to X line XXXXXXXX”

Just blocked out name of bank above. Does anyone know what that means?

Thanks for all the comments. I have engaged with MABS who have provided good advice but not whether a bank can do this or not.

The balance when debt collection agency got it was over 3900. I’ve paid over 3400. In July they added another €3000 for interest.
I’m trying to get the agency to accept a payment of €500 to just close account. They keep telling me I need to go back to the bank even though it was them that have been dealing with me for the past few years.
 

spring2020

Registered User
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15
Hi,

I am not clearer in my query at the start of this mail trail. The collection agency keep referring me back to the bank for any questions and the bank advised it is a T267 Correction.

Can anyone advise if they have any knowledge on this please before I go back to the bank? Or do I just swallow it up and accept the interest that has been applied and continue to pay for another couple of years when my credit history is destroyed anyway.

Thanks in advance
 

cremeegg

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3,312
Hi Spring 2020,

These debt collection firms operate in a highly aggressive manner, usually within the limits of the law just about. They basically identify vulnerable people and send out demands for money. You may not think of yourself as vulnerable but they do. Random additional interest charges like this, without any supporting documentation are unreasonable and most people would just ignore them.

Have you acted on Red Onions suggestion of 3 June and checked the credit register, that was good advice. What was the result, or why haven't you checked.

The bottom line is that you can pay this if you wish, but if you do not want to pay no-one will force you to pay. As regards your credit record well what is on the credit register.
 

elcato

Moderator
Messages
3,453
Tell the debt collection agency you will not be paying anything else till you get a full statement of them. Check your credit rating. If what you say is true and that you have paid off 3.4k of a debt of 3.9k then you may ask them to accept the 500 as final payment. Forget about the bank as you are not dealing with them.
 

spring2020

Registered User
Messages
15
I’m just waiting on the credit report to come on the post. Is there a way to view it online?


The collection agency keep repeating the following:

Thank you for your email contents noted.

X are handling the case on behalf of X.

In regards to your query on the increase of payment you will need to contact X for an explanation as we were just instructed to add the amount to the balance and any further questions regarding it were to be directed to X.

Thanks,
Laura
 

tomdublin

Frequent Poster
Messages
78
As previous posts mentioned, it is possible that this collection agency is trying to defraud you. People who work for these agencies tend to be at the lower end of the human morality spectrum. You should take the advice you have received here seriously and stop all further payments to this agency at least until they have provided you with a clear and documented rationale for their demands. Even then, the best option for you might be to stop all further payments to this agency.
 
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