G E Money and Secret Commissions

**frustrated46** · 14th August 2008 19:36

Hi,

Just to let you know that I am about to issue 2 Claims against GE Money (then Ocwen) for 2 secured loans taken out on our house in 1999/2000. These claims are possible because, after a professional audit, it was clear that we paid both a stated commission and secret commission on each loan. On one loan the broker's disclosed commission was £2,300 and the undisclosed commission was £4,500 - on a loan of approx £40,000. Both loans were redemned when we sold the house.

I am claiming all associated costs of the loans, in fact, everything except the capital sum, and eight/nine years interest icon

. This gives claims of approximately £25,000 and £30,000.

As per the Hurstanger case, the undisclosed commissions are a breach of fiduciary duty and a form of bribe. Am I one of this first to do this?

Frustrated.

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**Bona** · 14th August 2008 20:15

Good for you keep us posted

**andrew1** · 14th August 2008 23:47

http://www.consumeractiongroup.co.uk...ges-loans.html

As a matter of interest icon

, on what grounds do you feel you have to claim all the interest back as a result of this? can you explain your line of thinking and what backs it up at all because I know a number of people who have requested info from brokers.

I'm glad this is coming out into the open, going to be a few brokers with sticky nick knocks after they start seeing people onto this .

Sarah

**frustrated46** · 15th August 2008 11:17

Okay. About me: just finished Law Degree (2:1) at Birkbeck in London. Only reason to do this was a feeling of lack of power and irritation. Buffeted by the institutional contempt of financial institutions. Knowledge is power and I really do get quite irritated. Collected monies taken from my accounts by Natwest icon

a few years ago, etc..

In the case of G E Money/Ocwen the grounds are as follows: Our audits show two separate commissions to the broker on each loan; one disclosed and one not disclosed. The courts will take their lead from the Hurstanger case. The defendants in Hurstanger were not allowed redress because it was not a "true secret commission case", ie. their documentation stated that the broker "might be paid" a commission and that was enough to negate secrecy. In addition, even if there is no such statement, the customer should ask themselves what the broker is living on if he does not receive commission, and should be responsible enough to ask about commission.

However, in our case, the documentation shows quite clearly a commission of £2,500 to the broker. Being aware of this disclosed commission we would be entitled to believe that this was the brokers only return and we entered into the contract in that belief. The exposure of the undisclosed commission (much larger) would, reading the judge's explanation in Hurstanger make ours a true secret commission case. The remedies, as described in H, are "the amount of the bribe or for damages for fraud where he can recover the amount of any actual loss sustained by entering into the transaction in respect of the bribe given".

We are going for damages for fraud; the actual loss sustained includes any amount except the capital amount. So all interest icon

, penalties, disclosed broker fee, undisclosed broker fee, legal fees, settlement charge, admin icon

charges, completion costs, etc. These amounts are our financial loss caused by entering into a fraudulent contract.

Frustrated

**frustrated46** · 15th August 2008 11:40

In addition, the court will ask, would we have entered into the contract for a £40,000 loan knowing the real total commission was approximately £6,500? A sum which does not even take into account the interest icon

and fees of the lender. And were there more favourable loan arrangements that we could have entered into? And did our broker not reveal these other loan arrangements to us in a clear breach of his fiduciary duty because the return to him was greater if we signed up to the G E Money/Ocwen loans?

If the secret commission is established, the broker is in breach of his fiduciary duty and the lender is jointly liable. The courts have defined the way forward, but, as yet, I don't think that a provable case of secret commission has allowed the courts to follow through on the judgement given by Tuckey LJ in Hurstanger.

Frustrated

Frustrated

**andrew1** · 15th August 2008 12:10

Thanks frustrated, I'll watch this with interest icon

.

Sarah

**Jonny Insider** · 13th January 2009 10:36

Hi Frustrated

I'd be interested to know how you're getting on with your claim. I'm currently running a number of similar undisclosed commission claims against GE.

Jonny.

**Goldlady** · 14th January 2009 23:39

Hi frustrated, strangely I did a law degree for the same reasons and got a 2:1 as well, but with the OU as I work full time. I am interested in your claim as we had a 40k loan from GE. We have already claimed back all the charges and have a 2.5k ERC claim on standby. As ours was also through a broker I will have to do some more research. Do let us know how you are doing with this one.

**andrew1** · 15th January 2009 01:31

Originally Posted by Goldlady

Hi frustrated, strangely I did a law degree for the same reasons and got a 2:1 as well, but with the OU as I work full time. I am interested in your claim as we had a 40k loan from GE. We have already claimed back all the charges and have a 2.5k ERC claim on standby. As ours was also through a broker I will have to do some more research. Do let us know how you are doing with this one.

Don't want to digress from the thread, but which charges did you get back GL and on what basis? Had a GE Loan too, bags of charges...be interested to know.

Just to keep thread on track...http://www.consumeractiongroup.co.uk...ommisions.html

**Jonny Insider** · 15th January 2009 09:12

In the case we are currently running against GE for undisclosed commissions, at the preliminary hearing the judge asked GE's solicitors (Wragge & Co) whether GE had received any other similar claims and they stated they had not. I'd be very interested to hear if anyone has made a similar claim as I'm sure the judge will not be too pleased if GE have misled him!

**Goldlady** · 15th January 2009 10:46

All the £40 charges for late payment/failed dd's and the interest icon

we had paid on them. GE very kindly showed this separately on our statements. Was almost £2k. They tried to make me agree to keep my mouth shut - I refused

.

Back on track - how does one find out about these commissions?

**Jonny Insider** · 15th January 2009 10:53

Very interesting, Goldlady! What type of loan was it? Secured or unsecured? Was it your main mortgage icon

or an additional loan?

Re finding out about the commissions, they generally will not tell you in the first instance however the loan was arranged through a credit broker rather than directly with the lender then almost invariably a commission will have been paid (in addition to any fee the broker charged you directly). If you start legal proceedings, at that point they will disclose the amount of commission paid.

**Goldlady** · 15th January 2009 11:01

Secured loan in addition to mortgage icon

. Decided to go for them after they refused to help AT ALL when we got into difficulties and then tried to repossess icon

just before Christmas two years ago. Paid them off by refinancing with 1st mortgage icon

lender then issued court claim

**andrew1** · 15th January 2009 11:35

Originally Posted by Goldlady

All the £40 charges for late payment/failed dd's and the interest icon

we had paid on them. GE very kindly showed this separately on our statements. Was almost £2k. They tried to make me agree to keep my mouth shut - I refused

.

Back on track - how does one find out about these commissions?

I actually wrote to my broker and asked him outright. Did he or did he not receive an additional fee/payment from the lender as well as the one I paid him .. First attempt I received a politicians answer "well the question you should be asking is this" and promptly veering completely off track, so a more direct manner of questioning followed

**Goldlady** · 15th January 2009 21:35

OH has just reminded me that we were supposed to pay the broker a fee but we refused on the basis that they would have had their commission from GE (or IGroup as it was then). We had not been told we would have to pay the broker and they backed down fairly quickly when we put up a fight as obviously someone had forgotten to deduct it from the loan drawdown

. So I guess we can't really argue that one.

**andrew1** · 15th January 2009 22:08

Originally Posted by Goldlady

OH has just reminded me that we were supposed to pay the broker a fee but we refused on the basis that they would have had their commission from GE (or IGroup as it was then). We had not been told we would have to pay the broker and they backed down fairly quickly when we put up a fight as obviously someone had forgotten to deduct it from the loan drawdown

. So I guess we can't really argue that one.

The whole idea of establishing whether a secret commission has been paid is to ensure you were given totally unbiased advice. If they took a fee from the lender they were not unbiased. End of.

**Pinky69** · 21st January 2009 01:19

I've posted this on the secret commissions thread but am very interested to know how others are proceeding. A friend is seeing a solicitor tomorrow. She got nothing from the broker except his business card - no other paperwork whatsoever. The lender didn't even send her a copy of the mortgage icon

agreement. They are supposed to give the Information Disclosure Document from the outset detailing the charges for their service and a Key Facts Illustration about the loan. She was offered one loan and one loan only, no other companies or loans were mentioned and her credit rating is good - they are supposed to be a whole of market broker. He asked her for a fee just before everything was completed - it was too late then to turn back - and the broker's commission was tucked away on the back of page 10 of the loan offer - she never even noticed it. She was not asked for her informed consent to the brokers commission. In addition, the negotiations were held in her employers house (where she works) with her employer and the vendor present! Ouch! Don't know how she will get on but we will know more tomorrow.

**frettful38** · 8th February 2009 21:05

I wonder how everyone above have got on with this secret commission case, I have started my own thread but does not seem to be that much known on this site about it, have you all given up or in the middle of reclaiming.

Please post up, thanks

**frustrated46** · 8th February 2009 22:10

Hi,

My claim against G E Money Home Lending for two old Ocwen Loans (secret commission, erc) comes up in court next week for a directions hearing.

GE have two preliminary defences: They are not the defendants, Ocwen are (now dormant, bought by Igroup, which is part of G E Money).
and the claim is limitation barred.

So I am going to ask that Ocwen and Igroup are joined as defendants, then I have to wait another 28 days for their defence.

Wragge are their solicitors. Horrible.

Frustrated

**frettful38** · 8th February 2009 23:01

Good luck frustrated46,

Let us know how you get on, I wish you the best, and if you win it will be an excellent thread for you to start and be able to help a lot of others too

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