Shock news for major company - your customer "William Shakespeare" is a fraudster using a false name

I shouldn't laugh - but I did.

IT giants Cisco were shocked to discover that certain of their customers including "William Shakespeare", "Thomas Hardy", "Frank Lampard" and "Mr Fred" were actually fraudsters using false identities.  Which was a pity - as Cisco had despatched up to £12 million worth of computer equipment to these customers to replace 'faulty items' following purported warranty claims under guarantee.

The 'replacement' equipment was then being sold on by the fraudsters.

There really is nothing new under the sun!  I remember 30 years ago doing due diligence work at a finance company which - it turned out - had lent to such prestigious borrowers as "D Duck" and "J Cryst".

Apparently Cisco called in the police when their internal auditors spotted the unusually high value of warranty claims and dug deeper.  Police have arrested three men and a woman, all Chinese nationals, in London and Hampshire who are - no doubt - 'helping the police with their enquiries'.

David

www.AccountingEvidence.com

Comments
BirdnCo's picture

A fictitious Jack Jones and O2 Mobile

BirdnCo | | Permalink

On a similar vain, I kept getting reminder bills from O2 mobile addressed to a “Jack Jones” requesting settlement of an outstanding bill for £86 odd, that had been billed some four or five months earlier. These were addressed to my home address where I have lived for a number of years. I rang O2 whom said just ignore it they will resolve it and cancel. It. I subsequently received numerous letters from three different debt collection agencies, namely Moorcroft Debt Recovery Ltd, Wescot Credit Services Ltd and Buchanan Clark & Wells.  I contacted all three agencies and their responses were appalling, although I did say that this “Jack Jones” was non-existent and didn’t the name give them a clue? . However, when this was finally resolved, it appears that O2 had sold this debt to each of the debt collection agencies, each of whom had purchased the debt at face value.

 How does this situation fit in with the current law and of course Money Laundering regulations? 

davidwinch's picture

Selling an uncollectable debt

davidwinch | | Permalink

Suppose I am owed a £1,000 fee for work done.  If I sell that debt to to debt collector I would ordinarily (as part of the sale agreement) express either explicitly or implicitly that the debt was collectable.

Suppose I knew the debt was uncollectable and I was selling it to try and recover some of my loss.  That would involve me in dishonestly making a false representation to the debt collector with the view to getting money which I would not receive if I was honest.  The one word description of that is "fraud".  It would in fact be contrary to section 2 Fraud Act 2006.

If I was successful in my fraud then my possession of the money I had fraudulently obtained would be a money laundering offence contrary to section 329 Proceeds of Crime Act 2002.  If my accountant became aware of my money laundering (or suspected me of it) he would be obliged to make a report to SOCA under section 330 and the Money Laundering Regulations 2007.

But suppose I had a business where I had tens of thousands of customers who owed me money.  If I sold a 'job lot' of these debts to a debt collector would I be regarded as representing that ALL of the debts were collectable - so that if SOME of them proved uncollectable I would be regarded as having dishonestly made a false representation?  I don't think so.  If there is no dishonest false representation there is no fraud, and because there is no crime there can be no money laundering (because there are no proceeds of crime).  If there is no suspicion of money laundering there is nothing to report to SOCA.

Bear in mind also that, as an accountant in practice, you are obliged to report suspicions of money laundering by others based on information which comes to you in the course of your work.  You are not obliged to report suspicions of money laundering by others based on information which comes to you in your private life.

David

www.MLROsupport.co.uk

cymraeg_draig's picture

Moorcroft

cymraeg_draig | | Permalink

 I subsequently received numerous letters from three different debt collection agencies, namely Moorcroft Debt Recovery Ltd, Wescot Credit Services Ltd and Buchanan Clark & Wells.  I contacted all three agencies and their responses were appalling, although I did say that this “Jack Jones” was non-existent and didn’t the name give them a clue? . However, when this was finally resolved, it appears that O2 had sold this debt to each of the debt collection agencies, each of whom had purchased the debt at face value.

Posted by BirdnCo on Fri, 08/10/2010 - 17:35

 

Moorcroft Debt Recovery Ltd are in our experience one of the worse companies around.  We have had cause more than once to file formal complaints for clients regarding these clowns who seem incapable of accepting that a denbt is not owed.

The first response to companies like this is to demand a copy of the executed deed of assignment.  This is a statutory requirement under the Consumer Credit Act and they have 12 days in which to comply.

The letter template we use is -

 

Dear Sir/Madam

ACCOUNT NUMBER: xxxx
YOUR REF: xxxx

OUR CLIENT DOES NOT ACKNOWLEDGE ANY DEBT TO YOUR COMPANY

With reference to the above account, we request that you send us a true copy of this credit agreement before we will correspond further on this matter.

This is our clients right under the legislation contained within section 77 (1) and section 78 (1) of the Consumer Credit Act 1974, and our client is entitled to receive a copy of his/her credit agreement on request.

Your obligation also extends to providing our client with a statement of account. We enclose a £1 postal order, which represents payment of the statutory fee payable under the Consumer Credit Act. A copy of our clients credit agreement should be supplied within 12 working days from the date of this letter.

Under the Consumer Credit Act, creditors are unable to enforce an agreement if they fail to comply with a request for a copy of the agreement under these sections of the Act.

Also, since you are a Debt Collection Agency, we ask that you supply a signed true copy of the executed deed of assignment for the above referenced agreement. This is an obligation, whether you are the original creditor or not, under section 189 of the Consumer Credit Act 1974.

For the sake of clarity, we also draw your attention to the following:
Consumer Credit Act 1974 s.175
Where under this Act a person is deemed to receive a notice or payment as agent of the creditor or owner under the regulated agreement, he shall be deemed to be under a contractual duty to the creditor or owner to transmit the notice, or remit the payment, to him forthwith.

In summary, OUR CLIENT DOES NOT ACKNOWLEDGE THIS DEBT AND THEREFORE REQUIRES YOU TO SUBSTANTIATE THIS BY PROVIDING THE FOLLOWING DOCUMENTATION BEFORE WE CORRESPOND FURTHER :

1. True copy of original signed executed credit agreement
2. FULL Statement of account
3. Copy of the executed deed of assignment from (original creditor) and (DCA)
4. A fair processing notice.

As you are aware, a credit agreement that is not properly documented and signed by the customer is totally unenforceable under the CCA and therefore is a complete defence to any court claim that is issued.

Take note at this stage, that any legal action you may contemplate will be both vigorously defended and contested.

Further to the above, please ensure that any contact by yourselves is made in writing only to the above address. Telephone calls and personal visits will not be accepted and viewed as harassment.
We look forward to hearing from you within the statutory time limit.

We would appreciate your due diligence in this matter.

We look forward to hearing from you in writing.

Yours faithfully ________________________________________________________ How to deal with Debt Collection Agencies

First Rule: NEVER talk to them on the phone as they will say anything to secure payment. Keep EVERYTHING in writing as this will supply an excellent paper trail should the need arise.

Second Rule: Admit NOTHING. Now bear in mind that DCA's are simply commission based "agents" and are looking for any admissions that they can use as leverage. It is the DCA's job to prove the debt is owed and valid, not yours to do their job for them.

Third Rule: Always deal with DCA's in a professional manner. Let them rant and rave and make all the threats. They will come unstuck before you do.

Fourth Rule: Stay cool and calm. Yes there is a debt to pay, but on your terms.

Fifth Rule: Well that'll do for now

 

 

 

 

 

 

cymraeg_draig's picture

Disagree David

cymraeg_draig | | Permalink

But suppose I had a business where I had tens of thousands of customers who owed me money.  If I sold a 'job lot' of these debts to a debt collector would I be regarded as representing that ALL of the debts were collectable - so that if SOME of them proved uncollectable I would be regarded as having dishonestly made a false representation? 

 

 Posted by davidwinch on Fri, 08/10/2010 - 19:22

 

I disagree David. If it can be shown that the original creditor "knew" that just one debt was in fact not due, and they still included it in a block of debts sold, then that constitutes fraud.

Interestingly we have had several cases where debt collectors have refused to supply a copy of the deed of assignment claiming that it contains details of other debts too and supplying a copy would be a breach of Data Protection.

The law is specific and makes no provision for this, the courts simply state that a copy of a signed deed of assignment must be supplied within 12 days as prescribed by law and failure to do so for whatever reason (including data protection) is a breach of the Act and renders the debt uneforceable. 

 

davidwinch's picture

Meanng of a "true copy" of the agreement

davidwinch | | Permalink

C_D

We have to be a little careful as to what we mean by a "true copy" of the agreement in the context of s78.  As I understand it a "true copy" is not required to be a photocopy but is required to contain information about the terms of the original agreement (including the name and address of the debtor) and details of the terms which currently apply (if these are different).  That information may be produced by the creditor either from the original agreement itself or from other information held by the creditor.  The "true copy" need not carry the signature of the debtor.  The purpose of the "true copy" required under s78 is to supply information about the terms of the agreement - not to prove that the debtor actually made the agreement in question (which is a different issue).

As it was put in the High Court last year, "a creditor can satisfy its duty under s78 by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself", see para 54 of the judgement in Carey v HSBC Bank Plc [2009] EWHC 3417 (QB).

My own view is that a "true copy" of an agreement for the purposes of s78 is a document which has been honestly prepared to reflect the content of the original and which does not suffer from any material defect whether by error or omission. 

I agree with you to some extent about the effect of a failure by the creditor to comply with s78.  The creditor who fails to supply a "true copy" requested under s78 is unable to enforce the agreement in court - but that inability only persists so long as the failure to supply a "true copy" persists.  Once a "true copy" of the original terms of the agreement, and the current terms if different, has been provided then enforcement through the courts can move forward again.

It is also the case that, notwithstanding any failure to comply with s78, the creditor can (a) take any action short of court proceedings to seek to recover the debt (such as demanding payment or issuing a 'default notice'), and (b) supply information to credit reference agencies concerning the debtor's failure to pay (and need not add that the debt is currently unenforceable).

Obviously that could have an adverse effect on the customer's ability to obtain credit from elsewhere.

If the debt is one on which interest is accruing then that interest continues to accrue notwithstanding any failure to comply with s78.  Note also that failure to comply with s78 does not, of itself, render a credit agreement an "unfair relationship" within the meaning of the Consumer Credit Act 1974.

As is often the case in law - the detailed legal position in practice is not quite what one might have thought on first reading!

David

 

P.S. C_D you have lost me slightly with your reference to s189 CCA 1974 - can you expand on that please?  I can see that there is a need to give the debtor express notice of the assignment of the debt under s136 Law of Property Act 1925 by registered post - see s196(4) LPA 1925, but you have lost me on the need for a copy of the executed assignment agreement.

 

P.P.S.  I think I follow you now.  You are saying that the debt collector is now the "creditor" (per s189 CCA 1974) and therefore that the deed of assignment has changed the terms of the original credit agreement.  You therefore need a "true copy" of the current terms (per s78).  OK, I get that.  In my view it imposes a requirement on the debt collector to inform the debtor that the assigned debt is no longer due to the original provider / lender but is now due to the debt collector.  But, in my view, s78 does not require anything more than a statement to that effect (i.e. one sentence in a letter to the debtor or, better still, a copy of the letter sent to the debtor when the debt was assigned per s136 LPA 1925) and does not (again, in my view) require a copy of the actual assignment agreement between the original provider / lender and the debt collector.

davidwinch's picture

Fraud - maybe

davidwinch | | Permalink

C_D

Fraud necessarily involves dishonesty.  Dishonesty necessarily involves the dishonest person realising that he is behaving dishonestly (by the standards of ordinary and decent people).  That's a question for the jury or Magistrates in a criminal trial.

I agree that the sale, within a 'job lot', of just one debt known to be irrecoverable might be regarded as dishonest. But I think you would have to look at all the circumstances surrounding the sale of the 'job lot' before reaching a conclusion.  As I said, "I don't think so" - but there is room for differing views on that.

David

cymraeg_draig's picture

Fraud

cymraeg_draig | | Permalink

I agree that the sale, within a 'job lot', of just one debt known to be irrecoverable might be regarded as dishonest. But I think you would have to look at all the circumstances surrounding the sale of the 'job lot' before reaching a conclusion.  As I said, "I don't think so" - but there is room for differing views on that.

David

 

Posted by davidwinch on Sat, 09/10/2010 - 11:44

 

This depends on the circumstances. Where, for example, an alleged debt is disputed, then its sale as part of a job lot whilst that dispute remains unresolved, clearly constitutes fraud as the original creditor knows that it is disputed and therefore may not in fact be due.

 

cymraeg_draig's picture

Offences

cymraeg_draig | | Permalink

My own view is that a "true copy" of an agreement for the purposes of s78 is a document which has been honestly prepared to reflect the content of the original and which does not suffer from any material defect whether by error or omission. 

I As is often the case in law - the detailed legal position in practice is not quite what one might have thought on first reading!

David

Posted by davidwinch on Sat, 09/10/2010 - 11:21

 

The point is, that in our experience, the vast majority of debt collection companies fail to supply a copy within the prescribed 12 days allowed. Once formally requested they then have to send this within 12 days. If they do not the account is in dispute and they cannot chase for payments and no interest can be charged.  After 30 days, if no copy, it becomes an offence.
At this point applications to the court tend to result in the automatic striking out of any claim by the debt collection agency.  Offences should of course be formally reported.

davidwinch's picture

No longer a criminal offence to fail to supply a "true copy"

davidwinch | | Permalink

C_D

I understand a failure to supply a "true copy" is no longer a criminal offence as s78 CCA 1974 was amended by paragraph 20 of Schedule 2 to the Consumer Protection from Unfair Trading Regulations 2008 so as to omit s78(6)(b).

My understanding based on the cases of Carey (particularly at paragraph 130) and of McGuffick is that "if the debtor stops paying during the s78 breach period, interest will accrue. And if and when the s78 breach is cured, the creditor may sue him and recover all outstanding amounts. Moreover, during the breach period the creditor can still report the debtor to credit reference agencies ("CRAs") without the need to tell them that the agreement is currently unenforceable. It can demand payment from the debtor or instruct a third party to do so and can issue a default notice. None of that constitutes "enforcement". The only restriction on the creditor is that he cannot, after starting proceedings, obtain a judgment which enforces the agreement. So he cannot obtain a judgment sum, a charging order to enforce that judgment or make the debtor bankrupt".  (The case concerned credit card debts.)

I understand that in the case of other forms of credit:- demanding early repayment; recovering possession of goods or land; treating any right conferred on the debtor by the agreement as terminated, restricted or deferred; enforcing any security; and terminating the agreement; are also actions which a creditor is barred from undertaking whilst he has failed to meet an obligation to provide a "true copy".

However, whilst enforcement of a court judgment is not permitted, I understand that the creditor is not legally barred from threatening legal proceedings or bringing those proceedings (it is the enforcing of judgment in the proceedings that is prevented until the "true copy" has been provided).  Although in practice it would be pointless to bring proceedings which could not be enforced.

If a creditor knows that he cannot, now or in the future, provide a "true copy" which complies with s78 then he should not threaten court proceedings because he will never be in a position to make good the implied threat of enforcement and so in issuing the threat he is misleading the debtor.

David

davidwinch's picture

A word of explanation

davidwinch | | Permalink

C_D

Earlier this year I was instructed by BBC Radio 4 'Money Box' programme to assist them behind the scenes in connection with a documentary item they were making about a claims management company, and the implications of failure by lenders to provide debtors with a copy of their credit agreement.  So I got to know a bit of the relevant law.

The company in question is no longer trading.

Apologies for going on at length on some pretty esoteric points in that connection!

We seem to have got a long way off the topic of "William Shakespeare". . . .

David

cymraeg_draig's picture

Stupidity

cymraeg_draig | | Permalink

We seem to have got a long way off the topic of "William Shakespeare". . . .

David

 

Posted by davidwinch on Sat, 09/10/2010 - 17:40

 

To be honest, I have little sympathy for any bank or large organisation that is stupid enough not to check out customers before giving them credit or replacing "faulty" goods without proper checks.   It seems to me that they got exactly what they deserved. 

The sheer stupidity of some victims of crime almost beggars belief at times. 

We dealt with a case last year where a girl admitted getting blind drunk, admitted she could remember nothing from before leaving the bar to waking the next morning, but because she woke on the sofa in the accused's house concluded that he "must" have raped her.  

weaversmiths's picture

Debt Collectors

weaversmiths | | Permalink

I have had an enormous amount of grief from Certegy who have been sending copious amounts of mail to the rogue trader who was operating fraudulently from our address.  They refused to stop - I presume in the hope that I would pay them in excess of £30,000 just to get rid of them.  Even though they were in full knowledge that the trader was using our address without permission and even after our address had been removed form Companies House  - after 11 months of screeching at them - Certegy and their allied companies were still making a nuisance of themselves.  I stopped being angy and  got my head together and worked out a plan - I couldn't send them "Return to Sender" as they dont put their address on the envelope, so I bought a llittle "John Bull " type stamp and stamped  their name and address on the front of the received envelopes and then posted them back Return to Sender (all 120-odd received during less than a month) at a rate of 6 or so at a time and they had to pay £1 plus postage on each letter.  Whilst we were on holiday they were posted from Scotland, Northumberland, Birmingham, Stoke on Trent, Uckfield etc so there was no regular pattern. Needless to say it has been quiet on that particular front - at last. Our own Sorting Office was very helpful with advice on how to make sure they paid for the returned post.  (Its no good getting older if you dont get craftier). (;-).

The latest correspondence we are getting for him is from MCO Capital Ltd/Helploan - apparently it is a scam.  It comes in the form of an invoice for £300  plus interest which makes the bill £513.00.  It would appear that some people are paying this money so they are sending more and more letters out.  It is with the Fraud authorities at present.  My next door neighbour has had two different demands from these people.

Its a bad world out there.

The Ancient One

Monsoon's picture

Crafty

Monsoon | | Permalink

Our own Sorting Office was very helpful with advice on how to make sure they paid for the returned post.  (Its no good getting older if you dont get craftier). (;-).


 

Posted by

weaversmiths

on Sun, 10/10/2010 - 22:14

Please could you share this gem with us? I was under the impression that post marked RTS was simply returned (or binned) and the sender didn't have to pay for it.

 

Interesting thread, by the way! :)

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