Supporting Legislation

[alanfromderby]

I have looked at some of the legal arguments over this issue, and my view is that section 13 of the Supply of Goods and Services Act 1982, and section 2 of the Misrepresentation Act 1967, would cover the issue of PPI mis-selling.

 

In order to try and pull together a POC template, I would ask anyone with other thoughts to post them below.

 

I understand the reason for bringing in section 20 of the CCA in relation to additional credit charges and interest, however some users have used section 75 of the CCA - I am a little unclear as to the need for this in the light of the Sale of Goods and Services and the Misrepresenation Act, but I am open to persuasion.

 

Thanks.

[ReasonableRon]

I see on the Conkers website they have announced some sort of action in respect of a dozen test cases to try and set a precedent.

 

The problem with all of this is that there doesn't appear to be an obvious point of law upon which all cases can be categorised under, unlike the bank charges situation which relied on the simple rule that it was illegal to charge a 'penalty' other than reasonable costs. Each PPI case could depend on a unique set of individual circumstances (and available evidence) and I therefore believe will be a tougher nut to crack.

 

Witness also that banks appear to be much more eager to defend these cases than was witnessed with bank charges......

[Guest ChloeJane]

I agree with what you have written though unsure if it would be misrepresentation or actual fraud.

 

The reason that I say this is that the Fraud Act of 2006 link here changed many facets of various policies and I would have thought it Fraud for the following reasons;

 

1) A person is in breach of this section if he—

(a) dishonestly makes a false representation, and

(b) intends, by making the representation—

 

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

 

(2) A representation is false if—

(a) it is untrue or misleading, and

(b) the person making it knows that it is, or might be, untrue or misleading.

 

(3) “Representation” means any representation as to fact or law, including a

representation as to the state of mind of—

(a) the person making the representation, or

(b) any other person.

 

(4) A representation may be express or implied.

 

(5) For the purposes of this section a representation may be regarded as made if it

(or anything implying it) is submitted in any form to any system or device

designed to receive, convey or respond to communications (with or without

human intervention).

 

So my thoughts are while it is misrepresentation there is intent. This would be plausible in arguement as there is financial gain.

 

It is still a civil offence and encompasses the many reasons that PPI is sold. Often it is implied that it is part of the loan, and misrepresented for what it actually offers a person and is for their gain and causes loss to another by virtue of the false representation.

 

For example - if you are told it is part of the condition of the loan.

 

Your thoughts? I just thought it encompasses it all, rather than using the Misrepresentation act and having to add the CCA and is clear cut for pleadings and doing templates.

 

Thoughts????

[hellhasnofury]

I agree with what you have written though unsure if it would be misrepresentation or actual fraud.

 

The reason that I say this is that the Fraud Act of 2006 link here changed many facets of various policies and I would have thought it Fraud for the following reasons;

 

1) A person is in breach of this section if he—

(a) dishonestly makes a false representation, and

(b) intends, by making the representation—

 

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

 

(2) A representation is false if—

(a) it is untrue or misleading, and

(b) the person making it knows that it is, or might be, untrue or misleading.

 

(3) “Representation” means any representation as to fact or law, including a

representation as to the state of mind of—

(a) the person making the representation, or

(b) any other person.

 

(4) A representation may be express or implied.

 

(5) For the purposes of this section a representation may be regarded as made if it

(or anything implying it) is submitted in any form to any system or device

designed to receive, convey or respond to communications (with or without

human intervention).

 

So my thoughts are while it is misrepresentation there is intent. This would be plausible in arguement as there is financial gain.

 

It is still a civil offence and encompasses the many reasons that PPI is sold. Often it is implied that it is part of the loan, and misrepresented for what it actually offers a person and is for their gain and causes loss to another by virtue of the false representation.

 

For example - if you are told it is part of the condition of the loan.

 

Your thoughts? I just thought it encompasses it all, rather than using the Misrepresentation act and having to add the CCA and is clear cut for pleadings and doing templates.

 

Thoughts????

Hello Chloe,

 

Zootscoot put this information up in a sticky, your comments are appreciated:)

 

PPI Claims

 

Is there now a new thought on this????

[Guest ChloeJane]

The Theft Act supports civil claims and is not just for criminal liability and criminal law.

 

Many of the acts, such as dishonesty and misrepresentation have come under the Fraud Act as the Law Society did in fact change various parts with the Fraud Act to encompass a much more vast set of offences that are both civil and criminal.

 

In doing so, the Fraud Act is now widely used for Civil offences and is a far greater scope to cover such situations as PPI. While this is only my opinion I have tabled it for discussion for PPI.

 

The Fraud Act would encompass all areas without the need as I stated, for any other legislation. The act of mis selling PPI is fraudulent as it is for gain and false representation of facts and law in essence. There is gain and there is loss and it is made with intent.

 

Just thought it a valuable arguement as it is now a much more fundamental arguement for false representation and is a much more updated law for definition with clear parameters.

 

Hence, re tabled as I have personally a case on the matter and saw PPI as a clear cut case of Civil Fraud. So will wait for Zoot to feedback and to add to my thoughts?

 

JUST A NOTE TO ADD

 

That the Civil Courts require only that on the balance of probability it was fraudulent and with a civil case in this area, does not require the level of evidence that is required for a criminal court.

[hellhasnofury]

The Theft Act supports civil claims and is not just for criminal liability and criminal law.

 

Many of the acts, such as dishonesty and misrepresentation have come under the Fraud Act as the Law Society did in fact change various parts with the Fraud Act to encompass a much more vast set of offences that are both civil and criminal.

 

In doing so, the Fraud Act is now widely used for Civil offences and is a far greater scope to cover such situations as PPI. While this is only my opinion I have tabled it for discussion for PPI.

 

The Fraud Act would encompass all areas without the need as I stated, for any other legislation. The act of mis selling PPI is fraudulent as it is for gain and false representation of facts and law in essence. There is gain and there is loss and it is made with intent.

 

Just thought it a valuable arguement as it is now a much more fundamental arguement for false representation and is a much more updated law for definition with clear parameters.

 

Hence, re tabled as I have personally a case on the matter and saw PPI as a clear cut case of Civil Fraud. So will wait for Zoot to feedback and to add to my thoughts?

 

JUST A NOTE TO ADD

 

That the Civil Courts require only that on the balance of probability it was fraudulent and with a civil case in this area, does not require the level of evidence that is required for a criminal court.

 

I do know of a couple of posters that quoted the fraud act in their poc and did amend it after advise, I do not know where the advise came from though. This was a few months ago, so maybe it could be considered valuable.

Many thanks for that Chloe, that does sound promising:D Will watch with interest.

[alanfromderby]

I can see how the Fraud Act would help in cases where the "fraud" occurred after 15th January 2007 (the date I believe the Act became law), however I don't see anything that would make it retrospective - or am I missing something?

[Guest ChloeJane]

As you are taking your claim in the here and now, I see no reason why the legislation is not effective. The ACT I would have thought is relevant as despite the offence happening years ago, the act is relevant now and comes under what is current legislation.

 

I understand that it repealed various acts including that of misrepresentation so therefore would be the current legislation to use.

 

Yes No ? Input?

[shirleyc]

Hello,

So am I understanding this right?(sorry im thick!)The Fraud Act should cover PPI mis-sold?If thats so couldn't you use same Act in S.A.R - (Subject Access Request) non-compliance +CCA non-compliance

[alanfromderby]

We are moving off topic - I would suggest asking that question in the relevant forum (Data Protection Forum). However, please also bear in mind that we have conflicting views on whether the Fraud Act 2006 is relevant to PPI.

[alanfromderby]

There is a possibility that fraud could be cited - but without using the 2006 Act which I feel is not likely to be retrospective, and may not be relevant in the light of zootscoot's comments. In doing so, I would draw on the following caselaw:

 

Having now drawn attention, I believe, to all the cases having a material bearing upon the question under consideration, I proceed to state briefly the conclusions to which I have been led. I think the authorities establish the following propositions: First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made. (Lord Herschell - Derry v Peak (1889) 14 App Cas 337)

[shirleyc]

Sorry , but I thought was on-topic when talking about fraud-just wondered if it was about PPI +other issues.

sorry to butt in shirl

[hellhasnofury]

Come on guys we need to get our thinking hats on, this will help when issueing a N1 for the particulars of claim.

 

1. Under Section 75 of the Consumer Credit Act 1974 I was misled and false information was given during the interview process on the day the agreement was made:

 

“If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or © has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor”.

[alanfromderby]

Does anyone know if sections 140A and 140B of the CCA (as inserted by the 2006 Act) are retrospective. I have read that they are - but then I have also read that they are only become retrospective to current agreements in April 2008.

[skbuncks]

I agree that both section 13 of SOGA and section 2 of the Misrepresentation act cover many aspects of PPI mis-selling. Although I didn’t use SOGA myself I think this was due to an oversight on my part, or I may simply have not been aware of it at the time (I will certainly use it in my next claim). I dont think using SOGA should however exclude the use of CCA section 75, which is what I used personally as one of my main arguments:

 

 

• Under Section 75 of the Consumer Credit Act 1974 I was misled and false information was given during the interview process on the day the agreement was made:
   
  “If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or © has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor”.

Basically for section 75 to apply then the agreement would have to fall into either section 12(b) or 12© of the act i.e. the agreement is a debtor-creditor-supplier agreement.

Clearly any cash loan falls into a Debtor-creditor agreement and therefore section 75 does not apply.

However the PPI aspect of the loan, when treated separately, is I believe Restricted-use credit under section 11(1)(b). (This assumes that the supplier of the insurance is a separate body to the supplier of credit, which I believe they are). It therefore becomes a Debtor-creditor-supplier agreement under section 12(b). Section 75 of the CCA will therefore apply.

 

skb

[alanfromderby]

Certainly I would never discount anything, indeed I prefer to go into court saying I wish to proceed on the basis of Act X and/or Act y and/or Act z.

 

Often, each section of legislation comes with different burdens of proof, and by using a "belt and braces" approach, you increase your chances of success.

[alanfromderby]

I have now got a little more information on the CCA sections 140A and 140B.

 

These new sections came into force from 6th April 2007 to all NEW agreements. According to the OFT, these sections will also apply to old agreements from 6th April 2008 - however, the agreement must still be live.

 

Agreements that have ended (or been fully repaid) before 6th April 2008, will not be able to rely on the new sections, but will have to use the old "extortionate credit bargain” argument in section 137 to 139.

[zootscoot]

The Fraud Act 2006 relates to criminal law and attracts criminal sanctions and the civil courts lack jurisdiction to hear claims based on it.

 

Civil fraud is set out in the tort of deceit or fraudulent misrepresentation.

 

The Misrepresentation Act sets the remedies available where a contract has been entered as a result of a misrepresentation although the actual law on misrepresentation is found in common law. It is much easier to raise negligent misrep as the burden of proof in demonstrating that the statement made was negligent shifts to the defendant and the remedy is the same as available for fraudulent misrep where the burden is on the claimant to prove that the defendant made the statement fraudulently.

 

The s.13 of the Supply of Goods and Services Act would apply where you pay a broker to advise you as they are carrying out a service for you. I'm not sure if it would apply to the lender if they sold it directly to you as generally you do not pay them to advise you.

[zootscoot]

The applicability of s.75 will depend on whether the PPI was financed by the loan eg if you paid up front and it was added to the loan rather than if you paid the ppi monthly in addition to the instalments to the loan.

[alanfromderby]

Thanks for that, very helpful.

 

On the section 13 argument, doesn't the Financial Services & Markets Act 2000 put an onus on the bank/loan company to supply suitable products to its customers.

 

In particular, the FSA Handbook - principle 6: "Customers' interests - A firm must pay due regard to the interests of its customers and treat them fairly."

 

Prior to that, I understand that the Financial Service Act 1986 put a similar responsibility on banks/loan companies - but I have not been able to obtain a full text.

 

BTW, if anyoe has a copy they can send me, I would be very greatful.

[zootscoot]

I've added some links in the templates library here:

 

http://www.consumeractiongroup.co.uk/forum/statutes-library/122637-banking-financial-services.html

 

I'm not sure whether the FSMA or FSA principles give rise to a cause of action for consumers.

[zootscoot]

I've also added some case law for misrep:

 

http://www.consumeractiongroup.co.uk/forum/cases-library/122870-caselaw-misrepresentation.html

[alanfromderby]

It is likely that the bank/loan company will try and block your attempts to get hold of copy documents etc. This is the current legislation I have found on the subject:

 

 

Document Retention

 

According to sections 221 and 222 of the Companies Act 1985, a public company is required to maintain records for a period of six years (section 222(5)(b).

 

As a loan agreement is active until the agreement is terminated, I would suggest that all the payment records (and other documents making up the file - including the agreement/application etc) would be "live" until the account is paid, or terminated - thus, the full file should be retained for at least six years after that.

 

This interpretation fits in with Inland Revenue legislation that requires prime documents to be retained for a period of six years - AFTER THE END OF THE RELEVANT ACCOUNTING PERIOD. That would mean some files need to be retained for up to seven years. The relevant legislation is found in Schedule 18 of the Finance Act 1998 (paragraph 21) - of particular significance is sub-paragraph (6) which states:

 

"The duty to preserve records under this paragraph includes a duty to preserve all supporting documents relating to the items mentioned in sub-paragraph (5)(a) and (b)."

 

I would suggest that where a loan has been taken out to repay an earlier agreement, at the very least, a copy of the original agreement should be kept - although this is something that a court may need to rule on.

 

Finally, key documents/application forms etc must be kept until 5 years after that business relationship has ended. This is a requirement of The Money Laundering Regulations 1993, 2003 and 2007.

[alanfromderby]

The Limitation Issue.

 

As I understand it, claims for PPI misselling are based on misrepresentations made during the selling process. In some cases claimants may consider these misrepresentations to be fraudulent in nature (see earlier posts). There are also likely to be issues of concealment of facts and/or concealment of law.

 

My approach to the limitation issue is to not mention it unless it is raised by the loan company - at which point write back expressing your disappointment that they are trying to hide behind limitation, and that you consider that the limitation period will not apply due to section 32 and/or section 14A of the Limitation Act 1980.

 

You will find plenty of information and caselaw available to support all three exclusions outlined in section 32.

 

Should the claim escalate into a county court action, I would only include it in your POC's if it has been raised by the loan company as a reason for them not refunding. If they then raise it in their defence I would suggest you file a response to their defence using all three sub-sections on an "and/or" basis - and I would also include section 14A as well, just to be absolutely sure.

[patrickq1]

(5) For the purposes of this section a representation may be regarded as made if it

(or anything implying it) is submitted in any form to any system or device

designed to receive, convey or respond to communications (with or without

human intervention).

this i found interesting regarding the PPI i am claiming and maintain that the company who added this to my credit card informed me at the time it would clear my whole debt but this was not the case it paid 33 months but i was also charged two rates of intrest for the same PPI policy ,this is what i cannot understand they split the policy into two rates but i am of the opinion that they were double charging me for two lots of PPI

patrickq1