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We all know the Financial Crisis was caused by greedy profiteering in subprime misery. Financial and regulatory frameworks are slow to respond and ineffective at keeping the vultures of our society at bay. For too long has Great Britain behaved in a way that is far from great. The argument for a Greed is good culture is defensible when id drives innovation and improved services. I for one am glad that Steve Jobs was greedy, for if he were not, we would all be poorer for it, no iPhone, no iPad, no apple software, is just one example of why capitalism should be allowed to flourish, but there is a darker side to capitalism.
This article addresses some of the more loathsome behaviours that a greed culture invokes. There is a new bread of misery merchants on the block, they are a hybrid form of Private Equity yest I would be ashamed to call myself a Private Equity manager if I approved investment in some of the new subprime funds that they do. We have a financial regulator for a reason, it is there to protect and serve and it is not doing its job, not by half.
On top of this the court system, the last bastion of hope for the downtrodden of society is adding the regulatory impotency by hiking up the court fees for the very defenceless individuals who need them the most. Do we really want a society devolved from effective justice?
For too long have we allowed too many to fall victim to the predators roaming our financial services markets, using every loophole they can to circumvent the very letter of the laws they were designed to help
In most cases subprime asset collectors never go to court to collect unfair, miss-sold or defensible disputed claims, as to do so would not be cost effective, yet because a significant number of defendants do in fact pay up, even when they probably should not have to, the practice pays. This is an outlawed practice which breaches most of the Financial Conduct Authorities guidelines, yet individuals not aware of their rights often fall victim to the vultures.
These practices prey on the weakest in our society but what if anything can be done? There are several options which can be taken and I will try to address some of them in this article but first lets look at what behaviours increased court fees are driving.
The focus of this article is to examine the premise that the escalating price of court fees or the cost of defending oneself is fast becoming a luxury good that is effective in pricing ordinary people out of justice. The purpose of a justice system is to provide justice for all free and fair. Unfortunately this is a dream as the reality is somewhat different on the ground.
This article will take a look at one defendant who recently discovered a judgement was passed on his small business without his being made aware of the claim action. IT is the practice of the courts to send out notice of a claim and such notices provide a path to defence, should the defendant which to take it. However in some cases post goes missing and the courts then offer an opportunity for defence by resubmitting another form, but at a hefty court price. We all know the cost of administering courts have to be paid for, but surely the costs of defence should be proportional. For if they are not, these costs become a stealth tax on the poor.
In the defendants case the cost of defence amounts to 33% of the initial claim. If the defendant does not win, she bares the brunt of the claim, the cost of claim charges, and the court fees.
To put some context to the case which is being defended, the initial claim stems from late filing of Companies House documents. The documents are in themselves an administrative burden, in that they relate to filings for a small company which has not traded and is in all but name dormant. The reason the defendant needs the company is because it is a necessary part of the back office infrastructure that will support the company once the directors ramp it up. The directors are certainly culpable for not filing their form on time, and did in fact call companies house to apologise, and discuss their need to keep the company live. They filed their returns and were assured that the penalty charges would be rescinded.
The penalty charge did in fact disappear from the logged in account of the company and so the defendants assumed it had indeed been taken care of. But in actuality the Companies House staff did not issue a debit note, they instead sold the disputed bill to an asset collector.
Asset collectors are a new bread of debt agency that have emerged from the financial crisis, to make money from misery, through investing in subprime debt. These debt collectors are rarely interested in collecting genuine debt, but rather engage in the practice of driving up the size of the debt through issuing phoney charges, then selling on the debt, as an asset much the same way stock traders might do when their shares rise in value.
These firms are frequently funded by big private equity practices. They operate a marginal high risk business that requires heavy handed tactics to make it work. Mostly they themselves borrow large sums of cheap money, taking advantage of low interest rates, then purchase debts for pennies in the pound. They purchase thousands of debts as a portfolio, then process them using a finely tunes collection process. There is nothing intrinsically wrong with collecting debts you are due, however when the practice is a clear violation of Financial Conduct Authority rules, designed to protect the most vulnerable in our society, it is just plain wrong.
The process involves using heavy handed practices to collect such as deliberately sending multiple letters, that attempt to push you into entering debtor agreements that are in effect subprime debt traps. Once you do, the collect has you, they can then legitimately claim you agree to the debt and this increases its resale value on the subprime black market. The best option is almost always to defend the claim in court, this is free and typically means the collector writes you off. Take notice however if your collector is chasing a legitimate debt, you should pay it, it is not defensible, but it is important that you know the difference. Basically if you owe money and you are not disputing the legitimacy of it you should almost always seek to pay. This article is specifically referring to the case of disputed debts, that are often just no more than unfair penalties that large companies or government agencies try to get away with but are in and of themselves acts of crime. In these situations, you have a right to dispute a bill or charge, which is wrong, unfair of even a mistake. Banks, telecoms companies and government bureaucracies are all guilty in recent years of using big data to pick on the small guy. Consumers and that means of banks governments and service providers do still have rights, and when you feel they are violated by Blue Chips and Faceless bureaucrats or unhelpful banks you should make yourself and your position known.
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The price of court fees is effective in pricing ordinary people out of justice
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