Customer Care Is Dead: Debt Collectors Rule

RIP Customer Care:

Replaced by call centres, poor administration and the propensity to terminate agreements and send out for the debt collection agencies.

In fact some loan agreement terms and conditions are so generous to the client (due to base rates at 0.5%) that finance houses appear to be forced into termination in order to turn a profit.

Unfortunately I cannot name names but car loans are a perfect example. Fall behind (there is still an ongoing recession in full flight) and they will send out default notices and terminations like confetti. But when you read the fine print, they have within their remit the ability to charge you with base rate plus 5%, (total 5.5%) but via the courts they can apply 8% and ask for all outstanding premiums to be paid in one lump (even though you may not have completed on the term of the loan). Then they can get the car back as well. What a way to turn a profit!

It's called churning. And churning is big business. But big business has a guilty secret of making mistakes, and burying them into your account. Then they take you to court. If you have the temerity to defend yourself they capitulate, but if you don't they take your money, even if you do not owe all they say. And worse, the court system adds in it's fee, and costs. And then there is the unbelievable statutory interest at a princely 8% yes, thats 7.5 % over base.

All in all there is a game going on in the UK called 'churn the debtor'. Every company, bank, mortgage lender, finance house and debt buying agency is in on the scam. They are aiming to transfer unsecured debts into secured debts via the court system. Then, hey presto, they will sell on the secures debt at around 3-10 times the price they paid for it. It's the bad side of capitalism, but the legal system has to take some of the heat - they love it. They get paid by the hour whether the case is right or wrong, even if they make mistakes and you pick up the bill - it's called chargeable hours.

It's a "reprehensible business" (to quote one District Judge), but hey it's legal.

So the tip of the day is to challenge everything. If your lender or credit card co or even the debt collector say you own £XXXXX, then challenge it. 9 times out of 10 the figures are wrong. Or worse, some debt collecting agencies actually fabricate debts. Yes really!

Times are becoming bad, customer care is a sham and few can see it at the moment.