Full & Final Settlement Offer

Here is a letter recently received from 1st Credit:

“1st Credit
P.O. Box 278
Reigate
RH2 7WB
Tel: 01737 235202
Fax: 01737 887697

1st Credit Ref: NUMBER

“Special Low Discount Opportunity”

YOU PAY HALF
WE PAY HALF

Mr NAME
BLACK HORSE LIMITED – (reference number) Balance – £8,562.31

1st Credit believes in helping its customers to pay off their outstanding debt  while saving them money.  We are now in a position to apply a very large discount to your account  for month one month only. Unfortunately, this could be the only time  we can offer such generous discounts on your account.

Take up our offer this September and all you need to pay is: 428 £1.16

OR WE CAN OFFER YOU ONE OF THE FOLLOWING DEAL:“

The letter from 1st Credit then goes on to offer  various  other reductions  if you are not able to pay immediately.

Shortage of Funds?

I always wonder when this sort of letter is sent out  are they actually being generous, or is there a shortage of  money in the coffers? My personal opinion is that generosity  is not part of the equation! You have to remember that they actually purchase the original debt  for just pennies in the pound. So even with a 50% reduction, they are still making a nice tidy profit!

Reduce Settlement Offer Acceptance

If you are going to accept their reduced settlement offer, I would suggest that you take a few precautions.

• Make sure that all correspondences  to 1st Credit are in writing
• Make payment by cheque
• Includes a letter stating that the check is a full and final settlement
• If possible make the payment through a third party  who can act as a witness.
• Keep all correspondence for years!! I have known other companies  chase debts on settled accounts.

The more evidence that you have to show that the account has been settled in a full and final  the better.

How Much Could You Settle For

If they are offering a 50% discount, we can be very sure that they will be making a profit! In my experience you should be aiming for about a 70% discount when it comes to a full and final settlement. Just remember though, the lower you want to pay, the longer the fight. You may be interested in this this post, Full and Final Settlement Success Stories.