Bank Insurance Claims for debts

by Waffle Fri Sep 01, 2017 9:53 pm

I have seen in a number of threads that banks are claiming on insurance for unpaid debts, they then claims the money for the defaulted debt from the insurance company and continue to pursue the debtor for the money they have already claimed.

If I were to think of insurance claims.............

Lets say I'm driving a private conveyance Very Happy

and I crashed into someone, unfortunately I forgot to renew my insurance, who does the victim of the crash claim the insurance from!!! No one because I would be uninsured!

If I were running a business and there was an accident at work concerning the public but I had forgot to renew my public liability insurance, who would the public claim the insurance from??? I didn't have any public liability for them to claim from!!

If a debtor falls on hard times and cannot repay their debts, but has never taken out any insurance for these circumstances who is the bank claiming the insurance from???? Is it the NINO??

Does anyone know more about this because wouldn't a PERSON have to be insured for someone to claim insurance from them, I am not disputing this goes on and am pretty sure it does happen, what I am saying is shouldn't it be the debtors insurance company that settles the claimants debt......

by **daveiron** Sat Sep 02, 2017 9:55 am

Hi waffle,

I believe its possible to insure against most things. One example that comes to mind was at one time usually at fetes etc ,if you threw 6 sixes in a row with dice you would win a car that was on show .I understand this was covered by an insurance policy should someone actually win.

Regarding OC's it would make commercial sense to have in place a policy to cover defaulted accounts. Whilst i do not know if they have such a policy ,I always require from them a statement that they have never claimed insurance against said account.
Obviously if they have ,any claim against you would be fraud .

by Waffle Sat Sep 02, 2017 12:27 pm

Hi Daviron

When I applied for a student loan they incessantly stressed they needed the national insurance number, it was stressed in a number of the conditions, like it was the most important piece to the declaration.

I can't remember if I used it on 'loan' applications, however, like yourself I am of the presumption they do have some type of insurance. But if we liken it to the above example of insurance claims, it is our insurance they would claim it from, which makes me question is it the NINO, as with the student loan?

a little digging into this may reveal more.

by Tiggy Sat Sep 02, 2017 2:47 pm

Waffle wrote:Hi Daviron

When I applied for a student loan they incessantly stressed they needed the national insurance number, it was stressed in a number of the conditions, like it was the most important piece to the declaration.

I can't remember if I used it on 'loan' applications, however, like yourself I am of the presumption they do have some type of insurance. But if we liken it to the above example of insurance claims, it is our insurance they would claim it from, which makes me question is it the NINO, as with the student loan?

a little digging into this may reveal more.

The Student Loan Company would obviously need your NI number to track your salary, so HMRC can start initiating repayments through your tax code when you reach a certain threshold, that's why they need it.

by **daveiron** Sat Sep 02, 2017 2:57 pm

Is not the Student loan Company just another lender ? because I remember all the accounts being sold to them very cheaply .
So what gives them the right to track any ones earnings ?

by Tiggy Sat Sep 02, 2017 3:00 pm

daveiron wrote:Is not the Student loan Company just another lender ? because I remember all the accounts being sold to them very cheaply .
So what gives them the right to track any ones earnings ?

No, the Student Loan Company is a Government body, all student loans are lent by the Government and repaid through tax codes.

by Ausk Sun Sep 03, 2017 7:52 am

Student loans are one of those debts which are not extinguished through bankruptcy in the US.

On the basis of this I presume it may be same in the commonwealth countries, or will soon be.

by Guest Sun Sep 03, 2017 1:25 pm

Hi all

Is there still any such thing as a 'government body', what with all governments being corporations?

Unless the SLC is attached to the treasury maybe.

i think Waffle may be right in his suspicion that the NINO is connected to the fabled 'ESTATE'. Certainly worth considering.

Cheers!

by Ausk Mon Sep 04, 2017 12:24 pm

daveiron wrote:Hi waffle,

I believe its possible to insure against most things. One example that comes to mind was at one time usually at fetes etc ,if you threw 6 sixes in a row with dice you would win a car that was on show .I understand this was covered by an insurance policy should someone actually win.

Regarding OC's it would make commercial sense to have in place a policy to cover defaulted accounts. Whilst i do not know if they have such a policy ,I always require from them a statement that they have never claimed insurance against said account.
Obviously if they have ,any claim against you would be fraud .

It would be extremly likely to presume that a bank would take out repayment default insurance as part of their risk mangement strategy. Its called contracting out the risk and yes it certainly would be fraud if they had a go at getting it off debtors after claiming on insurance.

They would not dare do that because fraud vitiates all contracts and there is no time limitation on fraud. Fraud is relatively easy to prove and the fraudster has few or no defences to use that have any reasoanble chance of success.

Then again banks being banks .......

by 1saberwow Mon Sep 04, 2017 1:42 pm

A few years ago i got caught up in a scam and a good friend told me not too worry. He said that the Bank would get their money as they have insurance. I will have to give him a call to find out more about it. But he seemed sure that the Bank would not loose.

by **daveiron** Mon Sep 04, 2017 1:47 pm

Hi 1saberwow,

Any info you or anyone else could get hold of on this subject would be of great assistance.

by 1saberwow Sun Sep 10, 2017 2:20 pm

My friend said that the Bank can only claim on their insurance if there has been a scam involve and not for any default on credit cards.
I have given it some thought and maybe the Banks do not claim on their insurance as that would be fraud. So what could stop them from claiming on their tax?
Years ago aguy had done work on my car and i owed him at least $500 for many years and i think he claimed what i owed him on his tax. So if this was what he was doing each year. Could the Banks do the same when we fail to pay off our credit cards?

by **daveiron** Sun Sep 10, 2017 2:31 pm

Hi ,
thanks for that,I still think its worth putting in the letters as they will need to rebut it & put their name to the answer.

by 1saberwow Sun Sep 10, 2017 3:23 pm

With the Banks, could we add in letters to the Banks that they may have been claiming on their taxex? It may take time for the Banks to refute or rebut?

by **daveiron** Sun Sep 10, 2017 3:27 pm

Would not hurt, the more you can ask them awkward question the better.

by Tiggy Sun Sep 10, 2017 3:33 pm

I've never been 100% certain where the idea of insurance claims against bad debts came from, perhaps someone could do more digging to see if it's actually the case?

I've always assumed they were written off against tax.

by Guest Sun Sep 10, 2017 5:11 pm

Hi guys

What always struck me as odd about the insurance thing is that surely the insurance companies know all about banking shenanigans, indeed they too must be owned by the banks, and payouts affect their spreadsheets so why would they go along with it?

Cheers!

by **daveiron** Sun Sep 10, 2017 6:37 pm

My thinking is why would they not have it, For example I know some of our steel and other suppliers carried insurance
for defaulted accounts.
It must always be advisable to ask .If they dont have it there should be no problem stating so ,however if they refuse or will not give a direct answer ,then that should be a clue.

by Guest Sun Sep 10, 2017 6:40 pm

Hi guys

Apols - I was thinking of mortgages.

Cheers!

by 1saberwow Mon Sep 25, 2017 9:20 pm

If the Banks have claimed their bad debts on their taxes could DCA's do the same after purchasing bad debts from Bank's?

by Tiggy Mon Sep 25, 2017 10:01 pm

1saberwow wrote:If the Banks have claimed their bad debts on their taxes could DCA's do the same after purchasing bad debts from Bank's?

For the ones they write off, yes, but only the cost of what they paid for them - not their face value.

by petesomething Mon Sep 25, 2017 10:40 pm

Hi 1saberwow

NO DCA.s can not claim on bad debt on thier taxes because DCA.S only buy your data, why do you think they never have the paper work ,
The DCA .s would have to show to the taxman proof of purchase the DCA.s cant even show us the proof of legal ownership of the alleged debt,
the bank claim off their insurance, if they sell the debt , they would be committing fraud , but just by selling your data they still make money without committing fraud
Also if the banks did claim from the taxman on their tax returns , then bad debt will be a burden on the taxpayer , and the taxpayer would have paid the debt

by **assassin** Tue Sep 26, 2017 1:41 pm

They do exactly this, they write it off against tax as in most cases they lower their tax bills on profits, and it works simply.

Company makes a profit and this is taxable, they deduct their allowances to reduce their tax bill, and if they are near a tax threshold they use these losses to ramp up their expenses and fall into a lower tax bracket, they don't necessarily save directly from a single case, but by adding multiple losses together to lower their profits to fall into a lower tax band and get it through tax savings.

by sirus0 Mon Nov 11, 2019 12:54 am

Could anyone write a Freedom of Information query to the bank to find it out if they get paid by insurance company?
The loan was created by our signature on the application, so did they actually lost anything apart from the future interest?
The banks and insurance companies are interconnected so they will most likely do it in the way to make money for both of them...

by **LionsShare** Mon Nov 11, 2019 9:19 am

sirus0 wrote:Could anyone write a Freedom of Information query to the bank to find it out if they get paid by insurance company?
The loan was created by our signature on the application, so did they actually lost anything apart from the future interest?
The banks and insurance companies are interconnected so they will most likely do it in the way to make money for both of them...

all I can say is try it.

I have for something else, my reply should arrive in the next week. I have had an acknowledgement they had received it.

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