G E Money and Secret Commissions

[AA99]

Still subbing :-|

 

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/161277-aa99-ge-money-car.html

[AA99]

Some useful reading for all

 

http://www.pinsentmasons.com/media/1942522578.pdf

 

 

brokers earning levels of commission of this magnitude leave themselves open to the potential for secret profit actions by their customers.

 

© Pinsent Masons 2007

 

Has the law actually been updated since then?

[phrang888]

 

Prior to 2005 FP were paid 40% of the premium by the insurer Cassidy Davis ( CD accounted for the cash back at 60 months).

 

For those who have old loans with GE Money (the former First National Bank) anyone know if this was also the case, i.e. that Cassidy Davis would account for the cash back to First National Bank at the end of the 60 month PPI policy term?

[42man]

Frustrated....how did you get on in this case ?

[maybelline]

Excellent info michellej and I am pleased that you have not given up. I found this info and it is very very useful to all regarding the commissions

 

Hurstanger Ltd v Wilson and Another

 

The facts

 

Mr Wilson and his partner, Ms Burton, took out a loan with

Hurstanger Ltd, a non-status lender, via a mortgage broker. The

broker received a fee from Mr Wilson and commission from

Hurstanger. Mr Wilson knew that commission might be payable but

did not know that it was paid or the amount of the commission.

For reasons which relate to other aspects of the transaction, Mr

Wilson sued Hurstanger, rather than the broker, alleging, amongst

other things, that Hurstanger was an accessory to the adviser's

breach of fiduciary duty in failing to disclose the commission payable.

 

The law

 

This case was not covered by the FSA's Mortgage Conduct of

Business Rules as the loan was to be secured as a second charge

against the property, so it did not count as a "regulated mortgage

contract" and was not a specified investment for the purposes of the

Financial Services & Markets Act 2000.

 

Under the common law, an agent who receives a secret commission

without the informed consent of his principal is in breach of fiduciary

duty. A third party paying the commission and knowing of the agency

would be an accessory to the breach. Remedies (which are all

equitable) include rescission and compensation. Here it was alleged

that Hurstanger was an accessory to the adviser's breach.

 

In deciding the point, the Court of Appeal gave careful consideration

to what amounted to sufficient disclosure for the purposes of

informed consent and concluded that as the case related to a nonstatus

loan made to potentially unsophisticated and vulnerable

investors, it was necessary for the lender to ensure that the

borrowers were aware of the amount of commission payable as well

as the fact that there would be a commission payment. Hurstanger

was therefore required to pay an amount equivalent to the

commission to Mr Wilson and Ms Burton; however, in the particular

circumstances it was not appropriate to rescind the contract

Implications

Because this is a decision based on the common law, it will apply to

both regulated and unregulated sales involving third party

brokers/advisers. As there are clear regulatory requirements to

disclose commission it is to be hoped that similar situations will not

arise where the sale is covered by COB, ICOB or MCOB as

commission will have been disclosed. However, not all sales of

financial products are regulated by the FSA: both second mortgages,

as in the Hurstanger case, and buy-to-let mortgages fall outside its

jurisdiction.

 

Although the Hurstanger case is a case against a lender, if a lender is

liable to pay compensation to a borrower because an adviser has not

disclosed a commission payment, it is likely that the lender will seek

to recover that compensation from the adviser. While Mr Wilson did

not obtain rescission of the mortgage contract, this was because he

was aware that a commission payment was possible; had he not

known that this was an option, the payment would have been treated

as a secret commission payment and rescission would have been a

real possibility, so claims against advisers will not necessarily be

limited to return of commission.

 

Firms and their insurers should therefore take particular care to

ensure that commission payments are disclosed. If in any doubt, the

amount of the payment should be disclosed as well as the fact of the

payment

 

hope this helps anyone searching about commissions as it applies to regulated and unregulated agreements too.

 

wow - Ge have refused to supply the underwriting sheet to me following my SAR, also provided redacted documents in the past, a secret commission has been paid (obviously) also, very odd happenings with interest charges, currently handed to FOS and possible consideration of legal action if nec.

[jacqui_o]

Tried to start a new thread for this but dotn know how to , since the site changed......

 

Has anyone tried the new fraud act with GE, I am seriously considering it, but do not know eough info.....

 

When they went to court for p[ossesion( they didnto get it) they failed to give the court the correct arrears figure, it was half what they claimed, they also added fees to the normal monthly replayment, only on the court opaper work....

 

I thought fees and charges were totally a seperate issue from mortgage arrears....

 

my simple way of thinking is if they gave the court fales figures and information, surely that is covered under the fraud act?...

 

any info would be greatly appreciated on this...

[dadofholly]

Subbing

[maybelline]

more of the usual then from GE!!! sorry I dont know of anyone who has used the fraud act but it has come up before maybe on the credit agreements thread?

[HomerJSimpson]

Tried to start a new thread for this but dotn know how to , since the site changed......

 

Has anyone tried the new fraud act with GE, I am seriously considering it, but do not know eough info.....

 

When they went to court for p[ossesion( they didnto get it) they failed to give the court the correct arrears figure, it was half what they claimed, they also added fees to the normal monthly replayment, only on the court opaper work....

 

I thought fees and charges were totally a seperate issue from mortgage arrears....

 

my simple way of thinking is if they gave the court fales figures and information, surely that is covered under the fraud act?...

 

any info would be greatly appreciated on this...

 

Arrears and charges should be seperate amounts, not sure about the fraud act though. If you raise a court claim against GE Money for their charges, Eversheds solicitors really want to give you some hush money. They are currently offering me my full amount claimed, even though they will defend and expect to win.

 

HJS

[jacqui_o]

Thanks hommer.............. I thought they were also, but apparently not, GE added £65 per month to our mortgage to recover fees and charges, they sneaked it in with the court paperwork............ they also showed the arrears as double what they were...........

 

I woudl really appreciate someone whith knowledge about the fraud act to give me they're view...

 

If I do recalim the fees and charges...lol......... iti s actually a lot of money........ take it it will be the SAR request first............ then write asking for the charges back. then issue court claim...

[dadofholly]

here is some reading on the act.

 

http://www.legislation.gov.uk/ukpga/2006/35/contents

[jacqui_o]

Thank you dadofholly for thatlink.... from my brief reading of it. they have breached more than one se4ction.......

 

it would be great if someone who has done this could give me some pointers.........

[dadofholly]

That link is for criminal offences - not civil law.

 

If you are thinking of complaining about issues you will need to put the evidence together and report it to the Police.

 

You can of course take out a civil prosecution but it's not an area i could advise on.

[Smarterchick]

This is the letter I received after asking about their charges and discharge of loan fees when I took out another loan which paid this one off:

 

Following our acknowledgment letter of xx/xx/xxxx I can confirm I’ve now completed my investigation into your complaint. Thank you for your patience whilst I’ve been looking into this for you.

 

I’m sorry to read you’re unhappy in regards to administration charges applied to your account.

Please find enclosed a copy of your welcome letter which has ‘A Guide to our Fees’ enclosed.

 

The Repayment Administration and Discharge Fee is an administration fee charged for the work required to process the final payment of your loan and legal costs associated with the discharge of our security at Land Registry. This work costs us £200.00, which we pass on to you, which is clearly stated in the copy of the fees that was enclosed in your welcome letter. This confirms that the Security Discharge Fee in England, Wales and Northern Ireland is £200.00.

 

I can confirm that the amount of your mortgage discharge was £147.12 for Administration Discharge Fee plus £52.88 for the Solicitors Discharge Fee.

For each direct debit that is returned unpaid, various costs are incurred. There are the administrative costs of using the BACS system, the cost of advising you of the returned direct debit, either by telephone or letter, as well as the charge from our bank for each returned direct debit.

The £40 arrears administration fee is applied every month your account is in arrears with us. This charge is applied to recover the costs we incur in relation to your account being in arrears.

 

The charges are applied to your account when the arrears reach a certain level and reflect the general cost to us of maintaining a dedicated department for accounts in arrears. The costs of this result from contacting you by telephone, setting up arrangements, monitoring your account for payment and sending letters about your account status.

GE Money Home Lending undertakes an annual review to ensure that these fees are in line with the costs that it incurs in carrying out the related activities. In view of this, we are satisfied that the administration charges have been correctly applied and therefore will not be refunded.

I’ve also enclosed a copy of your credit agreement, which confirms in section D on the front the £500 broker fee. (I'd asked for their payment to the broker, which of course they haven't supplied!)

If you have any questions or feel you would like to discuss my letter further, please contact me.

Alternatively, if you feel I have not investigated your complaint thoroughly, you may refer it to our Escalations Team, at the same address, who will carry out a further review. I have enclosed a copy of our Complaints Leaflet “How To Make A Complaint”, which explains what to do and how you can refer your complaint to the Citizens Advice Bureau should you ultimately be unhappy with GE’s proposal for resolution.

Please note that if we do not hear from you within eight weeks of the date of this letter, your complaint will be closed.

 

 

Be interesting to see what they say when I write back and ask for the hidden broker fees they paid?

[jacqui_o]

Thanks dadofholly, I know it is for criminal offences, and having read the link you gave, feel that 1 though to 4 may well cover it..... the court paperwork and GE statement show the payment being made prior to the hearing, also statement show what the monthly payment is not what they submitted tothe court.......also a letter from them confirming they added this tio the normal payment to cover fees and charges.... so think there might be enough there.. am going to phone Watford police station to see if they will tak ethe complaint or if I will ahve to go to my own local office and make it....

 

I appreciate there are differences between civl and criminal law, but feel there is enough evidence here to bring the charge.......

[jacqui_o]

Maybelline I am just sending off my SAR and am asking for the underwriting sheet, so am guessing likeyou it wont be given......are you going to 31.16 them for it?

 

Smarter are you just going to ask for that info or are you going to 31.16 it.... I am asking because I suspect that I will notbe given it when I do my SAR.......and was thinking of using that to get it........

 

any and all thoughts fgreatly appreciated.

[frettful38]

You are correct smarterchick about the fees. These are the fees I had to pay when we released our charge from GE, seem similar?

 

http://i450.photobucket.com/albums/qq223/sophiak_bucket/GEMoneyfees.jpg

[Smarterchick]

Smarter are you just going to ask for that info or are you going to 31.16 it.... I am asking because I suspect that I will notbe given it when I do my SAR.......and was thinking of using that to get it........

 

any and all thoughts fgreatly appreciated.

 

 

To be honest, I'm just going to write and ask them outright. They have answered my letter omitting the answer to this, so it seems logical to just write back and ask them directly - KIS - Keep it simple..LOL

 

I could never make out exactly what they'd charged on their redemption statement, they are a bit confusing even for someone like me, so I'll get to the bottom of this with straight forward question/answers until they become evasive then I'll give em the 'treatment'! LOL

 

SC

[jacqui_o]

I like the Kiss principle:). will appl y that alos. will specifically ask for it in my SAR and see what happens....

[michellej1]

Hi all , seems like G E are good at keeping everyone at bay , I am ready to challenge them again , on this secret commission , forget the S.A.R requests or even expect to see a underwriters sheet, I have talked with a Solicitor and he put it as simple as this ,

 

DID YOU USE A BROKER ? YES

[michellej1]

Hi all , seems like G E are good at keeping everyone at bay , I am ready to challenge them again , on this secret commission , forget the S.A.R requests or even expect to see a underwriters sheet, I have talked with a Solicitor and he put it as simple as this ,

 

DID YOU USE A BROKER ? YES

 

DOES IT STATE ON YOUR AGREEMENT AMOUNT OF COMMISSION ?NO

 

Then this is a Secret Commission

 

Forget the S.A.R requests or even expect to see Unerwriters Sheet ,

 

Legal Proceedings can commence straight away without the need to adhere to Protocol , as if a Secret Commission You will not be saddled with any costs at all , and if you prefer to use a Solicitor You can claim back your legal costs , play them at they own game ,

[michellej1]

I have one question , which I think is a important point , If legal proceedings are started for Secret Commissions , could the lenders still strike for possession of property ,? as an outstanding dispute ?

 

I ask this as I have seen first hand the way G E work and have found themselves another loophole , I know we have visitors/guest on the site and do not really want to say what this loophole is as others will use it against us ,

 

put it one way 4 judges and 3 different Solicitors never realised this , But some smart a*$e barrister from London played this card , it worked and to be truthful it was a killer , I know 1st hand as used against us recently ,

 

it does not change nothing just pushed us back and waste of 1 year , but after a small rest we are ready to go again , but without all the requests , a defence will need to be put 100% from lenders , no more Mr Loophole , they used they last chance when we were playing by the rules with Protocol, lets hit them this time and hopefully after our experience of late , we feel like they is light at the end of the tunnel ,

 

and G E were snookered for so long , this time round we know how they will play ,

[michellej1]

shock the system , change the rules , do not follow the standard procedures, As they know the standard letter off by heart , they playing the game , the game they know so well , why do you think no major success stories

[dadofholly]

You could claim back all payments made - including interest etc - above the original capital balance - thus putting both you and the letter back to the position you would have been had the agreement never been made.

 

If you look through the case law - start with Hurstanger v Wilson - in one of the cases i am sure it is stated that if you had any benefit this should be seen as gifted to you.

 

But you will need to double check this - and also see if it is relevant to your case. One thing i have learnt is that a one size fits all approach does not work.

[andrew1]

Also look at Imageview vs Kelvin Jack