- May 5, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Situation Overview
In June of last year, a letter from Cabot Financial informed me that I owed them £1500 due to a debt transferred to them by Lloyds. Despite never having any outstanding debts, not even a mortgage, I found myself embroiled in a confusing situation. After months of back-and-forth communication with both Lloyds and Cabot, I still could not ascertain the origin of this alleged debt, as my only known Lloyds account showed a credit balance.
## Extended Explanation
It was eventually revealed to me that I had opened a student account with Lloyds in 2000, at my parents’ previous address. Subsequently, when the account was upgraded to a non-student account, I had assumed it was closed. However, it transpired that the account had remained open and had incurred a minor overdraft balance. Over the course of nearly 25 years, this overdraft had accumulated additional fees daily, ultimately reaching the £1500 limit before being sold to Cabot Financial.
Throughout this lengthy period, Lloyds failed to notify me of the escalating debt, despite my updated contact information. Now, faced with the prospect of a CCJ (County Court Judgment) if I do not settle the debt within 21 days, I am seeking legal advice on my options to challenge the validity of this claim.
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As long as you haven’t had contact witht them in the 6 years after the debt was accrued, then the debt would be classed as statute barrred and they would be unable to apply for a CCJ… They can still chase you all they want but they’re way beyond the timescale for any kind of legal enforcement.
I’d inform them of this and let them try to apply for a CCJ, they’ll get nowhere imo.
EDIT: Info at the bottom of the following link in regards to contacting them and the steps to be taken…
[https://www.citizensadvice.org.uk/debt-and-money/help-with-debt/dealing-with-your-debts/check-if-you-have-to-pay-a-debt/](https://www.citizensadvice.org.uk/debt-and-money/help-with-debt/dealing-with-your-debts/check-if-you-have-to-pay-a-debt/)
First, you raise a formal complaint about the debt. Every time you get an answer that is anything other than “We’ve cancelled the debt and will ensure it doesn’t show on your credit record”, you reply “Is that your final response before I can approach the ombudsman or do you need to escalate further internally?”
They will almost certainly clear the debt before it gets that far, and if it does get that far, you should easily win
Did they send statements to the address they had for this account?
Thank you all so much this has been very helpful. I guess my question would be – on which point do I fight this first? I see that they have a few things that mean they probably can’t make me pay this:
1) they don’t seem to be able to provide proof that I agreed to this overdraft as the document would have been signed 25 years ago. I guess there may be proof that I once used it during student years? Does that amount to agreeing to it?
2) they have had my correct address on file the whole time with other accounts, so they should/could have contacted me
3) they haven’t contacted me in over 20 years other than to send statements to an address not connected to me any more, and have allowed to is debt to grow exponentially whilst it was clearly a defunct account (whilst ironically sending me a letter last year to tell me that I no longer have access to my account that is very much in credit because I haven’t used it to spend from in three years – so they can do it when I’m in credit, but not in debit??).
4) as a commenter pointed out above – there may be multiple of us in the same situation due to a change in charges in 2008 so we may be getting charges on charges (or fees on fees it might be called)
Does anyone have any advice on my first steps. Do I send an email to Cabot with all of these points? Or do I start at the top and work down? Or bottom up? I just don’t want one to contradict the other.
Thanks in advance – so glad I posted here!
Either your other half and you don’t speak to each other or they’re awful at following advice and are also on Reddit.
https://www.reddit.com/r/LegalAdviceUK/comments/1c8iwmz/lloyds_charged_my_wife_interest_over_20_years_and/
Edit: ccj would let you pick the battle in court, but you need to get onto the ombudsman immediately because the court won’t care if it’s irresponsible lending, the ombudsman will
Raise all of this as a formal complaint with Lloyds and then unless they get this debt wiped and correct any negative marks on your credit record, escalate that complaint to the ombudsman. They’re the statutory avenue for these scenarios.
If you’ve been keeping your contact details with them updated and they implied that they converted your student account to a regular one, this is almost certainly negligence on their part.
Copy Cabot Financial in on your complaint to Lloyds and ask them to suspend proceedings while you address this at the source. If they don’t and they proceed to court, provide all correspondence with both Lloyds and Cabot.
This came up a few weeks ago with someone else. I think there was some good advice about Lloyds failing their own processes and a complaint to the ombudsman being required. I can’t remember all the points raised but if you search you should find the post.
Ask the debt colector to show you the financial agreement between you both, signed and dated. Case closed.
I had exactly this but with RBS this and they wrote it all off
I found myself in an almost identical situation with Bank of Scotland about 3 years ago. I’d taken on a Student account with an overdraft when I was at uni, spent on it and forgotten about it. I found out it was an issue when I went to re-mortgage as they had closed the account & sold the debt which had impacted my credit.
Thankfully, I had received no correspondence about this account or my debt from the bank over the years & they hadn’t even sent me anything to inform me of the accounts closure. They apologized profusely, removed the negative credit marker and deposited something like £750 into my current account as way of making it up to me once I told them about the stress they had caused me with my mortgage application.
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You may have acknowledged a debt that would’ve been statute barred had you not acknowledged it, and unenforceable, unfortunately.
Send Cabot a letter with “THIS IS NOT AN ACKNOWLEDGEMENT OF ANY MONEY OWED” at the top and ask them for proof of the debt – that would usually be the original loan agreement, but this was a (presumably) unauthorised overdraft so all they would need is proof that you owned the account, and terms and conditions of that account.
Don’t sign the letter – print your name.
Citizen’s Advice might even be able to put together a letter for you to send them tailored to your specific situation.
Lodge an official complaint with Lloyds. It triggers a regulated process so they take it seriously and I doubt the regulator would consider this anything other than customer harm.
Going round the houses with the two thieves is pointless – your only route to getting this resolved is lodging an official complaint to the bank in the first instance and then the banking ombudsman if necessary. Refer https://www.lloydsbank.com/contact-us/how-to-complain.html
Raise a complaint with the bank. Tell them to recall the debt from Cabot. Only deal with the bank. If their complaints process fails. Go to the financial ombudsman.
There was a similar story a few weeks ago.
In Spain and many other countries this kind of revolving interest cards are illegal https://www.in99.com/en/claims/revolving-credit-cards-claim
I’m just going to advise what I did was follow the formal complaints process with the bank and then, as I had to, go to the banking ombudsman. Barclays did something similar when I moved an account
Surely this is out of the time frame for a recoverable debt? Have you acknowledged the debt? Because if not, then as long as it has been a certain number of years since there was verifiable contact about the debt then they can’t recover it.
I get scammy phone calls claiming to be Cabot Financial. I think this whole thing could be a scam. Be careful with your personal information!
Offer them a payment plan of £1 a month, say that’s all you can afford. They will accept.