Set off against a sold third party debt ordered by the FOS

[MerlinW]

I made an unaffordable lending complaint and the complaint has been upheld. However the FOS have decided that the lender must either buy back the account from a third party and settle it, or pay redress to the third party directly. This contradicts previous decisions in which they told lenders they couldn't set off redress against accounts they had sold, which was pointed out.

The third party were completely oblivious to the complaint until a few days ago when I sent the final decision to them. I think they're as stumped as me as to what to do if I reject the decision because of this set off clause. Because the basis of the complaint has been upheld, the lender has admitted wrongdoing, so the account will still be seriously undermined even if I reject I think.

Any views?

[nightwatch]

puzzled.com?

[Roger]

I made an unaffordable lending complaint and the complaint has been upheld. However the FOS have decided that the lender must either buy back the account from a third party and settle it, or pay redress to the third party directly. This contradicts previous decisions in which they told lenders they couldn't set off redress against accounts they had sold, which was pointed out.

The third party were completely oblivious to the complaint until a few days ago when I sent the final decision to them. I think they're as stumped as me as to what to do if I reject the decision because of this set off clause. Because the basis of the complaint has been upheld, the lender has admitted wrongdoing, so the account will still be seriously undermined even if I reject I think.

Any views?

1/ Complaint upheld unaffordable lending

Original Lender
2/ Buy back the account from Current Creditor (third party) and settle it
or
3/ Pay redress to the Current Creditor (third party) directly

Seems to me that 1/ applies either way.

Is 2/ or 3/ YOUR PROBLEM Or something that they need to resolve? amongst themselves? Presumably in their Assignment Deed.

4/ Or is this as Nightwatch points out puzzle.com?

[MerlinW]

1/ Complaint upheld unaffordable lending

Original Lender
2/ Buy back the account from Current Creditor (third party) and settle it
or
3/ Pay redress to the Current Creditor (third party) directly

Seems to me that 1/ applies either way.

Is 2/ or 3/ YOUR PROBLEM Or something that they need to resolve? amongst themselves? Presumably in their Assignment Deed.

4/ Or is this as Nightwatch points out puzzle.com?

Seems to me that 1/ applies either way That's the issue really. I can't accept 1/ without accepting 2/3 (would be for the original creditor to decide whether to take option 2 or 3 if I accepted the decision).
I'm thinking of rejecting the decision out of principle because I think the redress should be paid to me not the third party. It wasn't necessary to do it this way, they could have told the original lender to refund the payments I made directly to them, minus the principle for that part of the loan/s, then remove interest and charges from the third party debt. I haven't seen other decisions in which they mandate set-off be used against third party debts, normally it's the other way around. When the original lender first made the proposal to set off redress against the third party debt, the adjudicators told them they would have to buy it back or it wouldn't be fair to set off, that was 9 months before the final decision so they had plenty of time and opportunity to do that. I always maintained that they should make their decision on the legal position of the debt at the time of the decision. i.e if they owned it at that time they could set it off, if not it should be paid to me.

I think they have opened up a can of worms. If I reject the decision, whether I can use 1/ to defend a ccj from the third party. Whether I can complain to the third party to remove interest and charges because the original lender has admitted wrongdoing, and potentially throw this complaint back to the fos if they disagree, this would just be to highlight the failure of the first decision. Whether I could set off the money I feel the original lender owes me if we start doing business again some time in the future, comes back to point 1.

[Roger]

Well you have in writing FOS complaint upheld unaffordable lending.
I should ask either the Original Lender of the Current Creditor for a refund! You surely don't mind which Do You?
I mentioned the Deed of Assignment it may well that provides for the return of a Debt.

[Joanna Connolly Solicitors]

I made an unaffordable lending complaint and the complaint has been upheld. However the FOS have decided that the lender must either buy back the account from a third party and settle it, or pay redress to the third party directly. This contradicts previous decisions in which they told lenders they couldn't set off redress against accounts they had sold, which was pointed out.

The third party were completely oblivious to the complaint until a few days ago when I sent the final decision to them. I think they're as stumped as me as to what to do if I reject the decision because of this set off clause. Because the basis of the complaint has been upheld, the lender has admitted wrongdoing, so the account will still be seriously undermined even if I reject I think.

The FOS can't order the original lender to do either of those things. Was this decision at the Adjudicator stage or had it gone further to an Ombudsman?

You no longer have a contract with the original lender. You've made a complaint against them which the FOS has upheld. The original lender should send the money (redress) direct to you.

The Deeds may allow the original lender to recall the debt and/or allow the debt purchaser to reassign it to the original lender but that may depend on what was written in the conditions which can sometimes be time-sensitive (i.e. only in the first six months etc).

How much was/is the outstanding balance and how much is the amount that the FOS say they owe you (on the assumption that you made some payments along the line)?

Can you say who was the original creditor and who is now the owner.

Without knowing the full facts or seeing the FOS Decision it's hard to comment but I would like to think that this Decision on irresponsible lending (whether accepted or not by you) would be useful as part of any Defence if you were to be issued with a claim for the full amount.

Di

[MerlinW]

The FOS can't order the original lender to do either of those things. Was this decision at the Adjudicator stage or had it gone further to an Ombudsman?

You no longer have a contract with the original lender. You've made a complaint against them which the FOS has upheld. The original lender should send the money (redress) direct to you.

The Deeds may allow the original lender to recall the debt and/or allow the debt purchaser to reassign it to the original lender but that may depend on what was written in the conditions which can sometimes be time-sensitive (i.e. only in the first six months etc).

How much was/is the outstanding balance and how much is the amount that the FOS say they owe you (on the assumption that you made some payments along the line)?

Can you say who was the original creditor and who is now the owner.

Without knowing the full facts or seeing the FOS Decision it's hard to comment but I would like to think that this Decision on irresponsible lending (whether accepted or not by you) would be useful as part of any Defence if you were to be issued with a claim for the full amount.

Di

Hi Diana,

This was at the Ombudsman stage, he actually made a provisional decision on these lines and gave us a month to make further comments and replies. I thought this was just a way for him to allow the creditor more time to buy back the account, but I sent proof just a few days before the deadline that they still hadn't bought the account back. I think that's why he added the bit about them paying the third party directly if they can't buy it back.

I made lots of comments about no longer owing the original lender a debt.

I did tell the adjudicators when they were handling it, and the ombudsman after the provisional decision, that the lender had provided no evidence that they had a contractual right to buy back the account. So I think what you suggest about time-sensitive conditions are probably correct, otherwise you would think they would have bought it back.

I borrowed £1,050 and paid back £923, about £620 to original lender and £300ish to third party, balance outstanding is around a thousand.

I have screenshot the final decision removing my personal details. It should be on the decision database in a few weeks if this doesn't work.