I have again written to Central Trust follwoing their dismissal of my claim some 3 yrs ago. This was done on the back of information I have witnessed in forums like this and having witnessed some of the successes (albeit limited) of others.

Their reply is detailed below and I would appreciate any element of help.

My initial dialogue with them was:

"

I originally raised this matter in 2006 and was told I had no grounds to complain on the issues raised. However, further investigation has lead me to believe differently.

I purchased Payment Protection Insurance alongside my consolidation loan but still believe that I was mis-sold this policy.

At the time of application your salesperson implied that taking out the policy would assist my credit application.

Additionally your salesperson did not give me full information on what the policy would and would not cover. It was only some time into the agreement that I noticed that the cover is only valid for the first 5 years despite having to pay for it over the whole loan term attracting interest also. The adviser did not make it clear that I would be paying interest after the expiry of the period of cover. All I was told was that I would get back the money I paid after 5 years, no exclusions or qualifying terms.

I am concerned the sales assistant that sold me the policy has no financial background and the policy was not sold in my best interests. What details do you hold regarding the cover I already with my employer? How was this used in the recommendation and value of the cover?

At the time it was also not made clear about the availability of other products in the market place.

Unless you can satisfactorily justify to me that the policy was fair and reasonable I will be requesting a full refund of the policy and the interest it will attract over the term. As I believe I have been deprived of this money I also expect 8% statutory interest, the amount a court would award, to be added to each payment made. Recommendation will be made to FirstPlus that the loan be recalculated back to inception. Adjustment will need to be paid for the period of cancellation FirstPlus credited, however, this is a matter unrelated to the valid sale of the product.

I look forward to a full and prompt response to this letter and for the matter to be concluded within eight weeks or I shall be re-contacting the Financial Ombudsman to investigate my complaint.

I am happy for email replies to be constituted as responses in writing for audit trail."

In response I have the following

"

As you are aware, we originally responded to your complaint relating to the sale of the PPI in June 2006, as such our final response has been issued and we will not be re-investigating your complaint.

To re-iterate; the sale of General Insurance (including PPI) was not regulated by the Financial Services Authority until the 14th January 2005. Prior to this date the insurance was offered on an information only basis.

At the time your policy was provided it would be our process to provide a quotation verbally over the telephone which may or may not include insurance (depending upon age and employment type). A broad discussion would take place regarding the loan and appropriate documents would be issued by post for consideration. Within the loan pack would be included insurance documentation and it would be down to the customer to check that they were happy with the price, term of policy, that the policy was suitable and that they were eligible for the insurance.

In your particular case, as the loan and the associated insurance were provided in September 2003 this was some time prior to the sale of general insurance (including PPI) being regulated by the Financial Services Authority. The concept of an “advised sale” did not exist in 2003 and therefore the allegation of mis-selling cannot be taken in the same context.

For any purchase of insurance prior to the 14th January 2005 date the client was deemed to have chosen to purchase the insurance. Therefore at the time of your application there was no regulatory requirement to verbally disclose the features, benefits or exclusions of the Payment Protection or to provide advice surrounding the Insurance. As part of the loan offer we would have sent several documents for your consideration, including a policy summary, FISA (Financial Industry Standards Association) Borrowers Guide, an application form and a credit agreement.

The documents clearly stated that the policy is optional, as the PPI was arranged prior to regulation by the FSA there was no requirement to verbally disclose that the policy was optional. In addition, there was no requirement to assess the customer’s existing cover, employee benefits or to verbally disclose the policy information. The policy was sold on an “information only” basis. The policy documentation was sent to you prior to the conclusion of the contract (policy inception), ultimately it was your choice to take out the PPI.

All of our Customer Account Manager’s are subjected to a rigorous training programme upon commencement of their employment. The training covers the loan process, underwriting and the selling of insurance. In addition, all CAM’s receive regular updates for any new processes and are also coached to ensure they follow regulations put in place by the Financial Services Authority.

The policy summary provides details of the terms and conditions of the associated insurance product. The FISA borrower’s guide, also provided with the loan pack, gives information regarding loans. It advises you to take independent advice if you are in any doubt about aspects of the loan. By signing the application form you have confirmed that you have read and understood this guide. The credit agreement shows the total borrowing, being the cash loan plus the optional PPI. On receipt of the signed copy of the credit agreement we had no reason to doubt that you had opted to take out the PPP. By signing this document, it confirms that you have chosen to take out the insurance.

It therefore appears clear to me that in view of the information provided to you with your loan documentation it is reasonable to expect that you would have read this information. If you were in any doubt as to the suitability of the loan or optional payment protection we would have hoped you would have raised these concerns with us. On receipt of your signed Credit Agreement we believed you accepted the terms and conditions of the loan and optional Payment Protection Insurance and had no reason to believe otherwise.

From my investigations and given the regulatory requirements at the time of the application I do not feel that we have acted inappropriately. I feel that adequate documentation was provided which explained the terms and conditions of the loan and the insurance policy.

It is entirely your decision whether to approach the Financial Ombudsman Service (FOS); however I would like to advise you that due to the time that your application was completed, your complaint may be outside of their jurisdiction and not an issue that they will deal with. In addition, our Final Response was issued two and half years ago. "

I am not going to give up on this but I need an angle and some help

Thoughts..?

they are correct

Going thru their response...

As you are aware, we originally responded to your complaint relating to the sale of the PPI in June 2006, as such our final response has been issued and we will not be re-investigating your complaint.

They have closed the dialogue. Your choice is therefore now limited to escalating the claim, either by an FOS complaint or by the issue of Court proceedings.

Given that this matter has already been knocking about for a few years, you need to make a resolute decision, sooner rather than later about what you are prepared to do and stick to it.

The experience of other CAG members suggest the FOS are taking about 8-12 months to deal with complaints.

Court proceedings will require more of your time and effort; and will be more intellectually and emotionally rigourous. Additionally, there is a financial risk attached to taking Court proceedings (however, in practice, in Small Claims, this is pretty minimal).

Personally, I would not delay the issue of proceedings beyond the end of August 2009.

To re-iterate; the sale of General Insurance (including PPI) was not regulated by the Financial Services Authority until the 14th January 2005. Prior to this date the insurance was offered on an information only basis.

The 1st sentence is true.

The 2nd sentence is a matter of the Defendant's opinion and logically unconnected with the first. (The intention is clearly, however, to make the reader mistakenly infer a link between the two statements: which given their position and your claim is ...erm... unfortunate.)

At the time your policy was provided it would be our process to provide a quotation verbally over the telephone which may or may not include insurance (depending upon age and employment type). A broad discussion would take place regarding the loan and appropriate documents would be issued by post for consideration. Within the loan pack would be included insurance documentation and it would be down to the customer to check that they were happy with the price, term of policy, that the policy was suitable and that they were eligible for the insurance.

Have they produced a copy the "insurance documentation" pack to you in response to your complaint?

Did you receive it in or around September 2003?

If you didn't receive any it (or certain parts of it) and or you didn't expressly indicate your agreement to the PPI subsequent to the telephone conversation... then their position is untenable.

Furthermore, as a matter of law, you cannot be asked to provide evidence of a negative. Therefore, if it is your evidence is that you didn't receive the documents in or around September 2003, then it is up to them to prove (on a balance of probabilties) that you did... otherwise the only credible evidence before the Court is that you did not.

Furthermore, since they do not elicit what the detail of the "broad discussion" was, they are not immune to allegations of mis-selling. For example, lets assume that during the broad discussion they did not ask you if you had any other insurance in place... and you did. Since their obligation is NOT to sell unsuitable products, they would have breached that obligation and you are entitled to seek to reclaim the costs.

In your particular case, as the loan and the associated insurance were provided in September 2003 this was some time prior to the sale of general insurance (including PPI) being regulated by the Financial Services Authority. The concept of an “advised sale” did not exist in 2003 and therefore the allegation of mis-selling cannot be taken in the same context.

The 1st Sentence is true (but, so what?)

The 2nd sentence may be characterised as a half-truth, because whilst it is not of itself untrue, it seeks to obscure the fact that the obligation not to sell unsuitable policies did exist in 2003 (either in Contract at Common Law, in Equity and/or by Statute); by referring to a concept which was created by reference to insurance becoming regulated by the Financial Services Authority. It is therefore, I'd suggest, an irrelevant tautology intended to confuse or perhaps even mislead the recipient.

For any purchase of insurance prior to the 14th January 2005 date the client was deemed to have chosen to purchase the insurance.

This statement is only true if, it is read as "the client was deemed *BY US* to have chosen to purchase the insurance."

In which case, so what? Such a statement does not add nor detract from the issues in dispute; it simply states them.

If the statement is read as "the client was deemed *BY LAW* to have chosen to purchase the insurance.", this would be, in my view, an incorrect and unsustainable assertion.

Therefore at the time of your application there was no regulatory requirement to verbally disclose the features, benefits or exclusions of the Payment Protection or to provide advice surrounding the Insurance.

The key word here is "regulatory".

Their argument would be that such a statement is true because until 14 Jan 2005 the sale of PPI wasn't governed by the regulations which have now been imposed by the FSA. However, it was still governed, but simply, by the wider law (rather than a regulatory body)

...and it may be that, strictly, they would need to further distinguish their statement, from their lawful obligation by relying on the use of the word "verbally". It is, I think, right to say that there is no express, positive obligation arising in statute or at common law that requires them to have verbally disclosed the features, benefits or exclusions of their policy to you or to have provided you with advice in connection with it... but this does not, in itself, detract from their specific obligation not to sell you an unsuitable product.

If you take their argument to a ridiculous conclusion; then there is no regulatory (or legal) requirement on me which specifically obliges me to verbally disclose to Suzannah (the hypothetical, but still smoking hot stewardess that I've just pulled) that I am suffering from a highly contagious, unpleasant and intimate disease which I caught from an overly excitable donkey, in a most unfortunate way, whilst on a Yodelling holiday in Botswana... instead there is a general, legal obligation on me, not to do anything to harm Suzannah.

As part of the loan offer we would have sent several documents for your consideration, including a policy summary, FISA (Financial Industry Standards Association) Borrowers Guide, an application form and a credit agreement.

 

The documents clearly stated that the policy is optional, as the PPI was arranged prior to regulation by the FSA there was no requirement to verbally disclose that the policy was optional. In addition, there was no requirement to assess the customer’s existing cover, employee benefits or to verbally disclose the policy information. The policy was sold on an “information only” basis. The policy documentation was sent to you prior to the conclusion of the contract (policy inception), ultimately it was your choice to take out the PPI.

The key words here are "would have". It says "we would have sent...". It does not say "we sent...".

Accordingly, I'd suggest, their assertion appears to translate to "[if things had been dealt with properly]...we would have sent several documents for your consideration... [but in your individual case, we have no idea if this actually happened and couldn't if asked by a Court to do so, prove it]"

All of our Customer Account Manager’s are subjected to a rigorous training programme upon commencement of their employment. The training covers the loan process, underwriting and the selling of insurance. In addition, all CAM’s receive regular updates for any new processes and are also coached to ensure they follow regulations put in place by the Financial Services Authority.

Utterly irrelevant.

The CAM's training is only significant to the extent that they can adduce evidence which either supports their assertion that the PPI was not mis-sold or refutes your assertions that it was... and the only person that can provide such evidence (if it is not supported by external documentation) is the CAM that sold the product to you.

Simply put, their training and sales methods could *cough* be 99.8% effective, but if in YOUR case the CAM, got it wrong, the policy was mis-sold.

The reference to them being "coached to ensure they follow regulations put in place by the Financial Services Authority." is just annoying, when they have gone to great pains to point out that a 2003 sale was not covered by the FSA regulations.

However, as they've raised the point in open correspondence... seize on it. Ask a whole bunch of difficult questions about it. What training were the CAM's given? What incentives did CAM's receive for selling PPI? Who oversaw the training? How was its effectiveness monitored? etc... This is like shooting fish in a barrel because they won't answer any of these questions, but neither will they be able to explain to a Judge why they won't answer them.

Do not let them off this hook...

The policy summary provides details of the terms and conditions of the associated insurance product. The FISA borrower’s guide, also provided with the loan pack, gives information regarding loans. It advises you to take independent advice if you are in any doubt about aspects of the loan. By signing the application form you have confirmed that you have read and understood this guide.

More careful reading is required.

Sentence 2 and 3 say "The FISA borrower's guide... advises you to take independent advice if you are in any doubt about aspects of the loan."

But the PPI is not, I'd suggest, an aspect of the Loan, in itself.

It is a thing entirely separate from the Loan, and something subject to its own separate Contract... indeed, as they are so keen to point out themselves, it was (or should have been) optional.

Have you seen the FISA borrower's guide? Does it mention PPI, at all?

Are they really trying to suggest that you should have read a guide which provided information about something separate to the PPI i.e. the loan, which included a recommendation in it to seek independent advice and that you should have assumed that this recommendation applied not only to the subject matter of the guide i.e. the Loan, but also to the PPI aswell? If so, this is nonsense of a particularly high order.

They cannot have it both ways. Either the PPI was optional and unconnected to the Loan and thus the information they may (or may not) have supplied about the loan is irrelevant OR the provision of the Loan was intrisically linked to the sale of the PPI, in which case, the PPI was mis-sold.

The credit agreement shows the total borrowing, being the cash loan plus the optional PPI. On receipt of the signed copy of the credit agreement we had no reason to doubt that you had opted to take out the PPP. By signing this document, it confirms that you have chosen to take out the insurance.

As I understand it, incorporating the cost of the optional PPI in the total cost of borrowing, without:

1. separating the cash loan from the PPI and
   
2. explaining to the consequence of this incorporation to the borrower in such a way that they understand that it will cost them an unholy amount of money,
   

may be unlawful of itself.

It therefore appears clear to me that in view of the information provided to you with your loan documentation it is reasonable to expect that you would have read this information. If you were in any doubt as to the suitability of the loan or optional payment protection we would have hoped you would have raised these concerns with us. On receipt of your signed Credit Agreement we believed you accepted the terms and conditions of the loan and optional Payment Protection Insurance and had no reason to believe otherwise.

"it is reasonable to expect that you would", "we would have hoped", and "we believed you accepted" are all pretty vague and unimpressive assertions from a Contractual certainty point of view.

Even if these nebulous hopes are enough to establish a contractual consensus (which in my view, they are not), so what?

Isn't the whole point of a mis-selling claim, that you bought something because it was inadequately or incorrectly represented to you as being something of value to you and that they were under a obligation to you not sell you the product, if it was unsuitable for you.

Whilst it is not impossible to imagine a scenario where a Claimant contends that he never entered a contract for PPI at all... most Claimants will accept that a contract existed (in the sense there was an offer and acceptance) but they will say that the apparent "acceptance" was invalid/irrelevant because of the Defendant's pre-contractual misrepresentations, breach of duty of utmost good faith, breach of statutory obligation under the FSMA 1980 and or the total failure of consideration by the Defendant in their apparent performance of the contract.

From my investigations and given the regulatory requirements at the time of the application I do not feel that we have acted inappropriately. I feel that adequate documentation was provided which explained the terms and conditions of the loan and the insurance policy.

Oh well, if its a question of feelings...

Oh, please, please let me be in a Court when a Defendant Bank argues that the feelings of its officers/employees should dictate the success of its Defence. I'd pay to watch that.

It is entirely your decision whether to approach the Financial Ombudsman Service (FOS); however I would like to advise you that due to the time that your application was completed, your complaint may be outside of their jurisdiction and not an issue that they will deal with. In addition, our Final Response was issued two and half years ago. "

They seem a lot keener on you going to the FOS, than a Court. I wonder why? 8-)

For some reason I have completely missed your reply!!! My apologies just read it through and it all makes sense. Of course they are vague, they all had to change their approach a yr later as it was deemed inappropriate, so of course they mis-sold just the new regs weren't retrospective for some reason to help those already hard done to.

I have been back to them on a lighter note requesting commission disclosure and I have been told they earned £3500 for the loan but "don't worry you have not been disappointed or disadvantaged in any way"!!! Can you believe the arrogance. They still refer to this homeowners guide that I signed for, no idea - giving someone a book is one thing, telling them it is full of info they need to read, oh and because it is let us take the time to go through it with you..is another thing!!

They say their terms indicated a commission "may" be payable so I have no chance going down a secrecy route as case law would be against me...remind of Wilson v Hurstanger again!!!

Oh and First Plus are trying to gag insurers / brokers from disclosing commissions paid as we have noww found out that FP only pay the insurer 60% of the PPI premium, keeping the other 40% as their fee and charging interest on the full 100% for the term of the loan.

The whole PPI thing is a lender created philosophy driven by greed - what is wrong with monthly policy, sold well people would pay it - I tell you what is wrong, they would not earn 40% commission by selling it that is what is wrong with it.