Cabot Financial: what a letter means and what to do

A letter from Cabot is a request to pay, not a court document, and it does not mean you have been taken to court. Before you pay, check that the debt is yours and the amount is right. You have time to ask questions and get free advice. This guide covers England and Wales.

Who are Cabot Financial, and why are they contacting you?

Cabot Financial is the customer-facing name of a group of companies based in Kings Hill, West Malling, Kent. Cabot describes itself as a debt purchase company, established in 1998, and says it is a member of the Credit Services Association, the trade body for debt collectors and buyers, and follows its code of practice.

The companies behind the letters

• Cabot Financial (Europe) Limited, company number 03439445, incorporated in 1997 and active, with its registered office in West Malling. This is the company named on Cabot’s customer website.
• Cabot Credit Management Group Limited, company number 04934534, which holds the FCA authorisation. It has been authorised since 11 March 2016, firm reference number 677910, with permissions including debt collecting, debt administration and exercising a lender’s rights under regulated credit agreements. Its trading names include Cabot, Cabot Financial and Cabot Credit Management. It cannot hold client money.

On the FCA register, Cabot Financial (Europe) Limited appears as an appointed representative of Cabot Credit Management Group Limited, under its own reference number 743525. That means the authorised group company is responsible for its regulated work.

Who owns Cabot?

Companies House shows a chain of Cabot holding companies leading to Cabot UK Holdco Limited, which is owned by Encore Capital Group UK Limited. Encore Capital Group describes itself as a global specialty finance company that, through its subsidiaries, buys or services portfolios of debts from banks, credit unions and utility providers, and is listed on the Nasdaq exchange. Cabot’s group law firm also describes itself as “an encore capital group company”.

The wider Cabot Credit Management group says it works in the UK, Ireland, France, Spain and Portugal, and that its UK businesses include Cabot Financial (debt purchase), the collection agency Wescot Credit Services, the water-sector specialist Orbit, and Mortimer Clarke Solicitors. If a letter comes from Wescot, see our guide to Wescot.

Why Cabot has your debt

Usually a bank, card company or other lender has sold Cabot an account that fell behind and defaulted. Cabot says it contacts people about accounts it has recently acquired, or to review payments on accounts it already manages. Once a debt has been sold, you owe it to the new owner. The sale only takes full legal effect once you have been told about it in writing, usually in a letter called a notice of assignment. For a regulated credit agreement, the new owner counts as the creditor, so your Consumer Credit Act rights now apply against it.

Is the debt yours, and is the amount right?

Old accounts change hands and details can go wrong. Check before you pay or admit anything.

1. Compare the letter with your records: the original lender, the account number, your address at the time and the balance.
2. Write to Cabot asking for the original creditor, the original account number, when Cabot bought the debt, the default date and a breakdown of the balance. FCA rules say firms must give you information on the arrears and the balance. See how to ask a creditor to prove a debt.
3. For a loan, credit card or other regulated credit agreement, write to Cabot as the owner asking for a copy of the agreement and a statement, with a £1 fee. It has 12 working days to reply and cannot enforce the agreement while it fails to do so.
4. Check your credit file with Experian, Equifax and TransUnion for the account and its default date.
5. If the debt is old, check whether it could be statute-barred. In England and Wales most debts cannot be recovered through the courts once 6 years have passed from when the creditor could first sue, but a payment or signed written acknowledgement before then restarts the clock.

If you dispute the debt, say so in writing with your reasons. Where there are valid grounds, or what appear to be, the firm must suspend collection, investigate and tell you the outcome. It must not keep pursuing someone it believes may not owe the money, and must not keep demanding payment once you say a debt is statute-barred.

What can Cabot do, and what can it not do?

These limits come from the FCA’s debt collection rules in CONC 7. Harassing someone with payment demands designed to cause alarm, distress or humiliation, or falsely claiming official authority, can also be a criminal offence.

Mortimer Clarke Solicitors

Cabot’s group has its own law firm, Mortimer Clarke Solicitors Limited (company number 06211733, registered office in Worthing), so a legal letter about a Cabot account may come from it. Mortimer Clarke says it is part of the Cabot Credit Management group and an Encore Capital Group company. It is a licensed body regulated by the Solicitors Regulation Authority since 1 July 2015 (SRA number 622915), and it has been authorised by the FCA since 5 May 2020 (firm reference number 912356).

Cabot says it only passes an account to its solicitors after trying to get in touch in other ways. As solicitors, Mortimer Clarke must not mislead you or take unfair advantage of you because you do not have a lawyer.

What should you do at each stage?

When the first letter arrives

Read it, check the details as above, and reply in writing if anything is wrong. If you are getting debt advice, tell Cabot: a firm told that you, or an adviser, are working out a repayment plan must pause active collection for a reasonable period. You can ask to be contacted in writing only.

If you want to pay or settle

Work out a budget first so that rent or mortgage, council tax, energy and food come first. The firm must consider a reasonable offer and explain clearly if it refuses. If it accepts a reduced settlement, get the acceptance in writing before you pay. A default stays on your credit file for 6 years from the default date whether or not you pay; clearing the debt changes how it is marked, not how long it stays.

If you get a Letter of Claim

A Letter of Claim is the formal warning a business must send before suing you. It comes with an information sheet, a reply form and a financial statement. You have 30 days from the date on it to reply. If you say you are getting debt advice, the creditor should not start court action until at least 30 days after it gets your reply form, and it should not start action while you keep to an agreed repayment plan.

If a court claim form arrives

Respond by the date on the claim form. You can pay, admit the debt and ask to pay by instalments, or defend all or part of it, and if you are not paying in full you can ask for another 14 days. See a Money Claim Online claim form for each option.

After a judgment

A county court judgment is removed from the register if you pay it in full within one calendar month. Otherwise it stays for 6 years from the judgment date, marked satisfied once paid. Cabot lists attachment of earnings, bailiffs or enforcement officers, and a charging order on property as possible enforcement routes if a judgment is not paid. A judgment on a regulated consumer credit agreement can only be enforced in the County Court, not by High Court enforcement officers. If you cannot keep up with court-ordered payments, get advice about asking the court to change them before you miss one.

How do debt solutions affect Cabot?

Cabot is an unsecured creditor, so the usual options apply:

• Breathing Space: creditors cannot contact you about included debts, add interest or charges, or take enforcement action, for up to 60 days (England and Wales only).
• A debt management plan: one monthly payment shared between creditors. It is informal, so creditors do not have to agree, freeze interest or stop action.
• An IVA: a legally binding agreement under the Insolvency Act 1986. Creditors bound by it cannot take further action to recover the debts included in it. Protocol IVAs usually last 5 or 6 years, fees come out of your payments, and it usually stays on your credit file for 6 years from the start. See does an IVA stop debt collectors?
• A debt relief order: for debts under £50,000, less than £75 a month spare, assets under £2,000 and a vehicle worth less than £4,000. Creditors cannot pursue listed debts during the order without the court’s permission.
• Bankruptcy: after a bankruptcy order, creditors owed debts in the bankruptcy have no remedy against your property or you personally for those debts.

Each has costs, conditions and long-term effects, and none suits everyone. The debt solutions comparison sets them side by side. IVAs, debt relief orders and Breathing Space are not available in Scotland.

How do you complain about Cabot?

1. Complain to Cabot in writing using its complaints process on its website or the details on your letter. Say what happened, with dates, and what you want done.
2. For a credit debt, if you are unhappy with the final response, or 8 weeks have passed, you can go to the Financial Ombudsman Service. You normally have 6 months from the final response.
3. For a complaint about Mortimer Clarke’s conduct, complain to the firm first. Serious concerns, such as being misled, can be reported to the SRA, although it cannot award compensation.

Our guide to dealing with debt collectors sets out your wider rights.

Is this letter or call really from Cabot?

• Cabot says that when it calls, it asks security questions to check it is speaking to you before discussing the account.
• It warns that fraudsters may ask for things like passport details or passwords, or call from withheld numbers, which it says it would not do.
• If you are unsure, do not click links or call numbers in the message. Contact Cabot using the details on your own letter or its official website, or check Cabot Credit Management Group Limited on the FCA register (firm reference number 677910).
• A genuine letter names the original lender and gives an account reference. If in doubt, ask the original lender whether your account was sold to Cabot.

What to do next

1. Check the letter against your records and ask Cabot in writing for anything you need.
2. If you cannot pay, tell Cabot you are getting debt advice, so collection pauses while you work out a plan.
3. Get free, impartial debt advice from MoneyHelper, StepChange, Citizens Advice or National Debtline. See where to get free debt advice.
4. If a Letter of Claim or court claim arrives, reply by the deadline and keep copies of everything.