Wednesday, February 6, 2008

Vanishing Debt and People

I am in the unfortunate position, that one of my business clients owes me about £300 for products and services supplied to him over the year. His cheque bounced and despite several reminders to cancel his subscription and doing so, I am yet to see my money. I had a conversation with a debt collection company, a very large one that sounds like something to do with a court called Intrum Justitia. One of the debt advisors told me they would do everything they can to trace this individual and try and extract from funds, but they said a lot of people are dissapearing from the system.

Curiously I asked what did she mean and she told me that in the UK our entire banking, mortgage, credit and insurance system is based on your name being on an electoral at your council. Each council is legally obliged to give/sell every name on that list to the credit reference agencies and this becomes the cornerstone of your credit file.

Every application for credit, is subsequently checked against your name being on the latest list of voters. When granted credit your payment history form the the principle part of your credit file and your ability to get finance, bank accounts and credit cards.

...what people are doing, is finding an empty property, or block of flats etc and simply download a form from the internet and claiming they live at that new address. The council add their names to new property and delete it from the old property where of course the debtor may or may not still live.

I asked what about council tax, she said the council tax system and the electoral system are not linked and in any case only one name need go on the council tax bill and no proof of identity is needed for that nor is there any checks done as long as the bill is paid.

I asked and phone bills, gas bills, electric bills what about these, she said of course when was the last time your were asked to prove your identity when you switched suppliers.

Ok what about their exiting arrangements, most just keep or open up a non status or basic bank account, then apply for credit in their own names on an empty property, as far as we are concerned they have moved and we have no right to pester the previous address. They simply vanish from our debtor system.

Surely, I said there must be someway to track them down.

Yes she said only one way, that is to try and tempt them to take out more credit, so get them back on the system so we can chase them for the debts they already have.

She said. People are doing this all the time and they are getting so good at it, there little we can do. Her advice was write off the £300 and put it down to experience.

People are choosing to simply vanish and disappear than go bankrupt. We'll see more of this as things get tighter, a hell of a lot more.

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