When a credit application is approved, it results in a debt being created. In banking terms, this results in an account being opened with a £0.00 balance. Then in terms of a mortgage or for that matter a personal loan, the capital balance borrowed is debited from that account by way of an example a personal loan would of £5,000, would leave the account when drawn down £5,000 over drawn. Monthly payments reduce the debt whereas interest installments increase the debt, until it is repaid.
An example of this can be seen in the statements for Tom Crawfords mortgage account.
Now this debt has value which can and is traded. The right to the debt (or rather the repayment of the debt) can be sold (assigned) in two main ways.
Firstly via an Equitable Assignment. This is when the borrower is not provided with a notice of assignment and is more than likely not aware that a sale has even taken place as the original lender, continues to administer the account with legal title remaining with the original lender, and from a customers point of view nothing has changed. In the UK, a prime example would be securitisation - when the benefit of an agreement is assigned (sold) to a third party.
Further information can be obtained from cases such as Paragon v Pender 2005
http://www.bailii.org/cgi-bin/markup.cg ... 5/760.html
This situation is covered within the T&C's in terms something along the lines of "we can assign our rights to a 3rd party", this does not result in a breach of the DPA, as when you sign the agreement it usually will also include a clause stating that information about you can also be passed to a third party. The agreement will not make a reference to a specific third party, just state a 3rd party (except to references to data being shared in a group)
Secondly the sale can also take place via a Legal Assignment. This is when a borrower is provided with a Notice of Assignment (Notice of the Sale) and the legal title (including the equitable/beneficial title) is transferred to a 3rd Party., as per s.136 of the Law of Property Act 1925.
http://www.casebooks.eu/propertyLaw/Cha ... rptId=2570
Examples of this can include a sale of accounts from one lender to another, with the accounts being held and administered by the new lender - examples include Woolwich/Barclays etc. Another example being when a debt is sold to a DCA. The effect of a legal assignment is that the 3rd party can bring legal proceedings in its own name.
Again this is all covered by the T&C's that you agree to when you sign a credit agreement and does not result in any breach of the DPA.
The trading of the paper credit agreement, does not occur in the UK as Tuco would like it to. The real asset, is the debt that has been created by the agreement. The trading of the debt / right to repayment is perfectly legal in the UK and does not breach the DPA.
If I understand correctly in Tuco's world Bank A lend a customer £5,000 and then sells the orginal paper agreement (after photocopying it and placing it in a draw) to Bank B for £5,000. Bank B then sells the original paper agreement to Bank C for £5,000, Bank C sells it to Bank D for £5,000 and on and on and on.
This is a freetard myth, as except for a piece of paper, each bank would not actually receive anything for each of their £5,000 and at the end of the term of the loan, it would leave the last Bank in this imaginary chain with nothing but a credit agreement for a loan that had already been repaid.
The above is my attempt to explain why Tuco is unable to provide any evidence to support his understanding, for the reason being that his understanding is wrong and based on Freetard folk tales