Welcome Finance Investigation

[Dipply75]

Morning Animal lover, that looks like one of their standard threats. They have stated they have been given a specific instruction from Welcome so defo send postggj's letter so that if they were to start anything, it's their own decision after being informed of the dispute.

 

I would also do a quick letter to Welcome demanding to know why they have authorised litigation proceedings for a dispute that the FOS is currently dealing with (which they probably haven't) - are they purposefully attempting to waste the FOS's time?

 

If they reply that they haven't then start the whole complaints process against Global. Don't give them an inch!

[Dipply75]

Hi postggj, all.

 

Although I HATE maths, time to have a bash. Have been doing some digging and would like to pose a 'scenario'.

 

Insurance Premium Tax (IPT) from what I can gather is 5% of the taxable premium. Now there are various rules about what counts as the taxable premium paid but basically, it is the full amount paid in relation to the policy premium - including commision, charges (whether those charges are called 'interest' or not) etc.

 

The only time the interest/commission etc is exempt from the tax is if these are part of a SEPERATE contract with the customer. OK.

 

Now you may think your loan agreement, regulated under the CCA, showing the insurance and the interest charged on it would cover this - but I am not so sure. The premium you are charged is on the same contract as the interest charges - the monthly payments you pay are all together - nothing seperate. OK.

 

So a company should be paying IPT of 5% on the total amount you have paid for your insurance? Hmmmm, have a look at the breakdown the lovely Mr Scothern gave this cagger in post 18. To me £90.64 is NOT 5% of the total amount they paid for that premium.

 

welcome finance and ppi **WON** - The Consumer Forums

 

Then....there is a company called Homeserve who were caught out recently along the same lines. They were selling insurance cover for boiler breakdown etc and along with the premium charged for the policy they were adding £14 admin charge. They stated in their paperwork that this was a seperate contract with Homeserve and were not paying the 5% IPT on that £14.

 

Except there was no actual seperate contract in actual existence and the £14 charge was included with the monthly premium payments - again, all together - nothing actually seperate, whether implied or not.

 

They argued, HMRC went to court and the judge ruled for HMRC. Homeserve now have to pay back all those little 5%'s of £14 on each policy underpaid - which comes in at just under 1 million.

 

Hope that is clear enough lol - now have another look at the figures quoted on the link about. I wonder...............

[Dipply75]

Thankyou

 

In the meantime, interesting reading. First item on this page:

 

News | Insurance Premium Tax Compliance Specialists | Fiscal Reps

 

Very long but explains it all (last update was Oct 2008):

 

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&propertyType=document&id=HMCE_CL_000194#P45_3565

[Dipply75]

Hi guys, really think we could be onto something here? Apparently, as we are part of the EU there is also something called 'Liability of the Insured'. Under EU law for Insurance Premium Tax, if the insurer has not fully paid the IPT due, the insured can actually be held liable for it!

 

Now I know that would be for large amounts and mostly business dealings (HMRC have already tried using this law against a UK company) but it does mean that not only do you have a duty, but it's in you own interests to ensure the IPT on your premium is fully paid. Could be just the doorway we need to demand proof of how much they paid and to who.

 

When my OH asked for his statements etc (not a full SAR) they sent (in error methinks!) lots of paperwork he had never seen before relating to his PPI, all with his signature on, forged. There was one with a breakdown of figures, will have to find this and see if IPT is listed and if the 5% is not fully paid I can go straight to the HMRC and test the water maybe?

[Dipply75]

dipply

 

what we have here is dynamite

 

i have just spoken to my pal.

he works in a local insurance office

 

welcome have to pay the 5% insurance tax

to any body fighting ppi claims with these pirates,

 

when they sell you ( force ) the insurance on you, they have to tell you that they get commission

this has to be in the terms and conditions of selling the policy.

this needs to be given to you at point of sale

 

they are allowed to do an addmin charge, but this must be told to you

 

this must be a small one off charge , not paying it through the length of the policy, at the high apr

 

welcome now have some explaning to do

 

gotcha

 

This is great - how many caggers have already either had to ask about commission and still had no answer, or been told no commission is paid.

 

For all the caggers given the basic policy T&C's on Welcome headed paper, nothing about any of this.

 

Oh dear

[Dipply75]

Animal Lover, I cannot wait to see if they reply to you and see what they say lol.

 

Found the OH's paperwork. I think I will have to sit with my local trading standards, and take a packed lunch. There have been so many facts and figures that just didn't add up - till now. There is sneakiness you would not believe. and they have NOT paid 5% on the full amount.

 

If we can prove what they have done with this agreement it should make animal lovers, and others, refunds plain sailing as they will know exactly what to ask for and prove.

 

Will dig out my scanner and get it posted on my thread to show you as I need help going through it all and to make sure I am on the right track!

[Dipply75]

Have attempted to update my own thread (lazy!) but here is what I have paperwork and figure wise to go on:

 

From what I understand, IPT is payable on any taxable insurance premium. The standard tax is 5%, which should apply to these PPI policies. One of the main questions is...what counts as taxable premium?

 

The HMRC states: “Premium” means all payments receivable under the contract of insurance by an insurer. (For this purpose payments under the contract of insurance received on an insurer’s behalf by third parties are treated as received by the insurer.) In particular, this includes any payments in connection with:

• the risk insured;
  
• cost of administration (that is, administrative costs which are charged to the policyholder);
  
• commission (paid to or retained by brokers or other intermediaries);
  
• tax (premiums are tax inclusive for IPT purposes);
  
• interest (where credit arrangements allow for payment in instalments, whether or not the payment for this facility is called interest).
  

(However, credit charges, whether or not the payment for this facility is called interest, are not treated as part of the premium where the charge is made under a separate contract, for example, a contract regulated by the Consumer Credit Act.)

 

OK - so the IPT is clearly 5% of the premium you pay. But should it also be 5% of the interest you are charged on that premium? It does mention the charges being on a separate contract, say a CCA - but note the exclusion words, separate contract.

 

This is where I need help! My OH's agreement has the premium listed in with the other borrowing, all the interest payable is lumped together, the monthly payments are lumped together. There is nothing listed seperately for the PPI premium, and certainly no separate contract in any shape or form.

 

Now bear with me!!! Even if the interest charges are not taxable - the premium is. They sent us their breakdown of prices for the loan and here is what it says:

 

PPI Price inc IPT - £1094.67

Interest - £ 710.37

Total Payable - £1805.04

IPT incurred - £43.81 - That just is not 5%!

 

And the bedtime reading that explains about the idea of separate contracts and how they apply:

Homeserve v HMRC | OUT-LAW.COM

 

anyone with any expertise on this stuff, help!

[Dipply75]

Hi postggj, animal lover,

 

You will never believe what I found (while looking for an old RBS agreement!).....one of Welcome's own 'policy schedules' from 2004 that lists Norwich Union as the insurer and also gives a policy number.

 

This policy number is exactly the same as another persons policy schedule from 2005 - so I think that if Welcome have any kind of policy in existence it has been a 'block policy'. Can't find much on this but I think this is when a company, broker etc buys a specific policy, but buys X number of 'units' to sell?

 

They then sell as much as poss and settle up with the Insurer at the end of the year - how many were sold, how much etc.

 

So, I am dying to know, does anyone else have any insurance docs from Welcome that state a policy number in the T&C's of 01LASU424?

[Dipply75]

Hi postggj, apologies, my keyboard died! Have only been able to point and click for days now lol so have been reading but unable to write. I was completely lost being unable to use my pooter!

 

Have read through that thread and I agree it is a prime opportunity, not only to help Prudence chase them away but to corner them into some answers. I think you have pretty much covered all. The main facts we need to pin down are - actual cost of the policy(ie amount paid to insurer), commission if any, how much tax was paid and who paid it.

 

If they have paid tax on the policy cost only (not inc commission) - got them

The commission is also taxable @ 5%.

 

Will add to that thread later today.

 

Hey animal lover, you seem to get all the idiots. Is that another complaint letter then? Sigh. I wonder how they are getting on with their 'investigation', more like wondering what the hell to reply with!

[Dipply75]

Just another thought before I go. Anyone who received policy documentation through received a 'policy' listing all sorts of T&C's etc (like Pear's one) but all on Welcome paper.

 

If they HAVE bought anything from Norwich Union, even a 'block' policy, I would be very interested to see what T&C's etc are in the Norwich Union documentation....just to see if the Welcome headed paperwork sent out is exactly the same? (ie must b claiming jobseekers to claim???)

 

How about getting a mass complaint organised to Norwich Union against Welcome?

Edited December 11, 2008 by Dipply75
had another thought

[Dipply75]

Hi Animal Lover, excellent news! Good to get that bit of certainty, lets see them wriggle round that.

 

Been reading on some of the other threads about the bit of difficulty Welcome seem to be having? Hmmm, ideal time to start pounding this insurance carry on.....Animal Lover has kicked it off with that letter about the tax etc, I will follow up with another letter asking some very pointed questions and will send a copy to the Inland Revenue. Lets see what they say

 

Will also send a complaint to the Chief Executive of Norwich Union ref the Insurance, quoting that 'policy number' lots of us seem to have. Will try and work out a rough template for you all to look over/amend for everyone to use and hopefully lots of us can mass complaint them into replying?

 

We are all gonna owe you one postggj when this is over

[Dipply75]

Good Mrning Anilmal Lover, postggj. I have read through what Welcome have sent and the questions about it all and I think you have some very interesting info here now. I will need to look out my stuff to explain what I mean clearly and I have to go out now but...

 

The loan agreement? The first one they sent you had your signature on it. You really want to know how they have now managed to send you a completely different looking agreement with your signature on it again without copying or forging your signature on one of these documents. It is therefore convenient that the 2nd agreement with the same signature appears after you claim unenforceability. I think Trading Standards/FOS or somebody should demand to see the true copy they would rely on in court to prove they have not just forged your signature to suit!

 

The 'statement of price'? I was sent one of these through also, which amazed me as it was apparently signed by me and I had never seen it before in my life. It is actually a very poor attempt at copying my signature, it really is nothing like mine when compared - forgery again?

 

As for the figures in it:

It clearly shows them charging you interest on the acceptance fee - nono

It lists the amount of insurance and the IPT incurred - these amounts do not add up (will show this later!)

The only way for the IPT they show to add up is for your PPI to include commisiion and they have paid IPT on only the basic cost of the PPI (minus commission/tax etc)

 

If that is true you've got them and the figures to prove it.

1 - IPT is payable at 5% on the PPI cost AND the commission AND (possibly, still checking) the interest charged on that.

2 - this would also prove you were charged a commission - have they not lied and denied this all along. I certainly was not informed of that when 'buying' it (and where is the breakdown of it on their statement of price?)

 

Sorry, ranting now, and probably late but this is too interesting now.

 

Animal lover - if they can provide 2 completely different documents with your signature on, they have just proved they have your signature on file and are duplicating it to suit - including that statement of price - do you remember seeing that before?

 

Postggj is right, the taxman needs to see all this!

[Dipply75]

I agree totally, animal lover has managed to get priceless info from them.

 

I have to back out again but there are a few things which I have read time and time again but I do not fully understand, do you know anything about:

 

Charging interest on the acceptance fee. I know its a nono but I am not entirely sure why or which law etc covers this.

 

The declaring or informing of any commission on the insurance, I am sure I have read that you should be told how much etc, its not even in their internal paperwork for gods sake!

 

I was reading a thread started about a better way to get the true signed copy of your agreement and in the PPI bit of their letter they asked specifically for "the underwriting sheet" detailing any commission paid or received for the sale of the policy. Am wondering what this is and would that be a standard thing between the insurer and a broker/company?

 

And, OMG about Cattles! Think theyve seen the storm ahead then?

[Dipply75]

Found that link:

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/173201-why-you-shouldnt-use.html?highlight=underwriting+sheet

 

They also discuss the acceptance fee thing, what do you think?

[Dipply75]

lol, I know, With me she slid the agreement across the table, said 'sign here' while still holding the other end and had her hand covering the whole top half of the agreement and as soon as I had signed...whip! It was away. But that was it....in, sign once and away. I signed NOTHING else.

 

I would report back t o Trading Standards with serious concerns about your signature being forged. In fact I see no other way except forgery for your signature to appear on 2 completely different agreements! And its awful easy for them knock up a legit agreement once they know what was missing from the first one - deary me, there are some right muppets trying too hard to cover their tracks!

 

What worries me is I wouldn't want ordinary hard working folks to lose jobs, especially nowadays, just to make them stop ripping folk off and to make it right to those they did.

[Dipply75]

Hi K1mmie, those are some scary figures, even scarier that they took that much care over an secured agreement for those sort of amounts that it is probably only good as toilet paper? I really hope you get somewhere with that and get rid of them. Maybe getting your PPI and the tax paid on it looked into will help...I will post as much info as I can on it asap, am trying to get it done! Do you have your own thread on this we can help on?

 

Wintermare, very very interesting...a few folk have been saying the same sort of thing. I wonder just what is going on then.

 

I am not sure what or who is actually formally investigating them but there have been that many complaints, there must be! Please don't worry about them 'calling it in'. They cannot do this, postggj is right, another company would just buy the debt and run on with it. If the Administrators are called in you may never hear from them again!

[Dipply75]

hey animal lover,

 

letter looks great. As long as your findings about the commission and IPT are now added to your complaint to the FOS thats fine.

 

Maybe change the bit about the forged signature to state that you received the unenforceable agreement with your signature from your CCA request, and only when you told them it was unenforceable did totally different agreement conveniently appear that included all the missing elements, again with your signature. You fail to understand how your signature can appear on 2 completely different agreements without Welcome having it on file and reproducing whenever suits, and are now seriously concerned about forgery. You have also never seen the 'statement of price' until now yet this also shows your signature.

 

However you want to word it, just so they know that the 2nd agreement only came after they messed up the first and they then had a motive to forge. This will be pretty much what I send the FOS also.

[Dipply75]

By the way, had a word with the Inland Revenue and have their dedicated IPT office address to write to. They didn't seem too interested at first as I wasn't a business until I explained possible 'underpaying' of IPT. I quoted the figures Welcome sent me for my PPI and they asked me to send in as much info as possible.

 

I have cleared this evening to sit and finish this Welcome stuff so will post figures, address and details I have later.

[Dipply75]

Hi all, so sorry for the absence, have had some troubles. I see I missed some fun then!

 

Postggj, I see you are causing them all sorts of mayhem , well done lol.

 

Right, the tax. animal lover, I have went over the figures they sent you in that statement of price and there are big questions to ask now. I have dug up as much as I can on this IPT and:

 

To get the amount of IPT incurred simply divide your premium by 21.

Check the £175 premium for the '1st person PAP' - IPT incurred £8.33.

That works out fine.

Now check your PPI premium....IPT incurred should be £29.76 - not £25.02.

So something doesn't add up, how much was actually paid to the insurer then and how much was commission? Why is there no breakdown of that?

Even then the commission is taxable anway!

 

Here's what I really want clarified by HMRC - they state that the interest charged for paying up the premium is also taxable EXCEPT where the charge is made under a separate contract, for example, a contract regulated by the Consumer Credit Act.

 

They key word there is seperate - there is nothing seperate on your agreement. The PPI, interest, loan etc is all lumped together. There is not even a breakdown showing the seperate interest charge for the PPI. This could mean they should be paying tax on the interest also.....

 

As for there pathetic letter? They have said to ask Direct Group about the actual payment of IPT, except Direct Group claim to only be an admin call centre that deals with the claims etc.

 

So have Welcome just admitted to you that they have not paid Norwich Union, or the tax man, anything? Direct Group say they don't even deal with that......so how is Norwich Union and the tax man getting paid then

 

Am going to go and amend the letters I have been working on now for this

[Dipply75]

Just a thought, has anyone SAR'd Direct Group? There has to be an audit trail here to follow:

 

Welcome charge premium and interest - all on same contract

Welcome calculate tax on less than the full premium - why?

Welcome claim to pay the premium to Direct Group - do they really and how much is actually paid?

Direct Group then do what with the money? Pay who, how much and what documentation is there to prove this? (Underwriting sheet etc?)

Does the insurer pay the tax man - if so, how much? the amount due on the premium they receive or the amount due on what Welcome actually charged?

 

Thinking out loud, hhhhmmmmmmmmmmmm

[Dipply75]

Hey Animal Lover, got some interesting reading for you and a few more people to pester for info

 

Check out the Direct Group website - especially the "services" section and "premium collection". They claim to be the middle man, including taking the payments, accounting for them, dishing out to the insurer and keeping all the records for this to FSA standards...according to this they should have full records of everything! I wonder whythey are not being up front about this hten?

 

Direct Group - Where Insurance and Innovation Combine - Home Page

 

You could start by e-mailing the guy listed on the FSA register as their complaints/insurance contact:

 

FSA Register

 

Try sending him your letter with all the IPT questions and enclose a copy of Welcomes response lol, see what happens!

[Dipply75]

Hey animal Lover, how are you getting on , any news from anyone?

 

I am gonna have to update my thread soon, have just left it hanging! I think you should send an e-mail to that contact at Direct Group with your premium, insurer and tax questions and include that letter from Welcome stating that Direct Group can advise. You could also ask for a ref or policy number to help Norwich Union trace the premium and policy as they cannot find any record of it, they obviously need it to investigate your complaint to them about Welcomes behaviour in selling this policy on their behalf.

 

If they cannot (or will not) give then I would update the fsa that you are concerned you were sold something which may not even exist and no-one is able to give you basic proof of.

[Dipply75]

Hey Animal Lover, things are getting interesting again.

 

Let us know how you are, hope you are well

[Dipply75]

Hiya, we were missing you! Sorry to hear you are feeling poorly, really hope it passes quickly

 

Will post a link, you should read if you get time, its all went a bit Eastenders lol, plots everywhere!

 

The groundwork you have done is invaluable, the response from Direct Group and Welcome recently on the tax etc. Postggj is ready to expose quite a lot, so may help you get some money back from them hopefully.

 

Another cagger, Andie303, is fighting them at court just now and that outcome can prove very good for you.....hoping we can get some good news to cheer you up with

 

Oh, and you will probably notice a lot more 'guests' on your thread watching...evening welcome.

[Dipply75]

Animal Lover, can you remember - did Welcome ever deny to you that commision was earned on your PPI?