Complaints about the FOS

[david999]

thanks babybear:)

[davey77]

For anyone battling to get fairness and impartiality with the FOS i suggest going through reallymadwoman's other very helpful threads:

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/136654-complaining-financial-ombudsman-service.html

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/102011-blair-oliver-scott-bank.html

[pompeyfaith]

The problem where mine lays is this:

 

The way the Co-operative Bank have done there calculations is totally wrong as they have not calculated it to FOS GUIDELINES.

 

they have taken the total paid including the loan i have paid then taken what i should have paid including the loan but without the ppi off.

 

The differance of the two is what they have offered no mention at all about the PPI Premium paid there is an amount of the premium that was not rebated into the loan when i settled this should be along with the other 8 be paid into my current loan to reduce the balance.

 

And all the monthly payments i have made on this loand returned to me.

 

http://www.consumeractiongroup.co.uk/forum/payment-protection-insurance-ppi/151052-pompeyfaith-co-op-ppi.html

 

PF

[Kraken1]

interesting.

 

Firstly, due to the size of this claim I am not sure fos is the right venue. This said, it is there now.

 

It may be that you had just got a bad adjudicator, but it might also be that you did not prove your losses adequately enough. I'm not privy to all of your evidence or your application so can't comment specifically. In general terms however this type of claim can be stupidly difficult to prove as you are trying to establish something that might or would have happened but didn't, as opposed to the normal course of events where you are claiming for something that happened that should not have.

 

A breach of contract alone does not normally entitle a claimant to compensation, there needs to be a proven loss to recover and this loss must be within the reasonable contemplation of the parties at the time the contract was agreed. It must be shown that the breach of contract caused the loss. In this instance that the six week (?) delay in opening was the clear cause of the loss. It might have been, but this will be difficult to prove, especially in a climate where Gordon Ramsey's profits are tanking and so many businesses are failing anyway. It is likely all a defendant would have to do is point to an established business failing and you are buggered.

 

Not an impossible case, but your evidence will need to be solid. Very solid. Do not get distracted by arguments over mistakes and breach of contract, these are not the issues. The only issue is proving the loss was an inevitable consequence of the breach of contract and that this was obvious to the bank.

 

If all you have said is that 'I opened late and this meant the business failed' then you are screwed. this is not going to be enough for fos, or a court I'd wager.

 

Do have an argument ready to rebut a suggestion that you affirmed the contract.

 

Good luck.

[pompeyfaith]

This is a long time coming

 

 

BBC NEWS | Business | Firms to reveal complaints data

[david999]

THANKS kRAKEN1

 

NOW YOUR GETTING TO THE CORE OF THE COMPLAINT!

 

As throughout my complaint to the bank, i continually said lets stick to the facts.

 

A) DID THE BANK COMMIT BREACH OF CONTRACT.

 

B) DID THE BREACH CAUSE THE LOSS.

 

both of the above is the whole case.

 

You have to prove (A) firstly before you can go onto (B)

If you can't prove (A) then (B) is also automaticaly dismissed

 

the bank admit in letter "the funds should not have been provided in trench payments"

 

The Adjudicator stated " indeed, paragraph 4.1 of the legal agreement does stipulates that the loan was to be drawn in one amount, As such there would appear to be a clear breach of contract"

 

he then says in his opinon " the loan was always meant to be drawn in stage payments but this condition was accidentlly ommited from the legal agreement"

 

OK.

 

to my knowlege, the bank has never stated this condition was missing, So why does he think there is this condition missing, i believe the contract to be correct as it is, there is no condition missing.

 

i have asked him what proof do you have that this condition was accidential ommited?, and if your going to tell me, because the bank told you, then thats unacceptable, have you investigated any of the banks other agreements to compare to my agreement, is this type of loan usually provided in stages or one amount?

 

I disagree with comparing business (gordon ramsey) all businesses are individual with different circumstance.

 

I believe if i had opened upto 6 weeks earlier the business would have survived,

 

the adjudicator not interested in the delays in relasing the funds,

his conclusion

 

"the original intent was always for the loan to be drawn in instalment, and that whilst the accidential omission of this condition from the loan agreement has resulted in a technical breach of contract on the part of the bank this was not the real reason the opening of the restaurant was delayed or the business failed"

 

the adjudicator has based his conclusion on "it was always the intent to draw the funds in stage payments"

 

im assuming he means it was my intention.

 

The loan agreement had a 6 month holiday period before payments started, so what did i have to gain by taking stage payments???????

 

"no comment"

 

i can and have proven the stage payments delayed the build, and caused the business to open at a critical time.

 

I dont see the point going into hypothetical situation on wither it would have survived or not, as this would be wild guesses from both parties, all i have done is state thefact.

 

throughout the complain i have not said anything i could not back..

 

Just to finish, the business manger informed the FOS that he knew nothing of the complaint untill December, he was caught red handed telling lies as it was proven he was informed in September,

 

Adjudicators answer " we have no powers to take action against staff members"

 

No but it lets you know they are telling lies!!!!!!.

 

 

david999

[InformedSearcher]

Probably the other way around.. the employee's previous role was most likely within the finance industry/banking sector before he/she started work at the FOS and therefore partly why you get these types of decisions.

 

I see where you are coming from - like a catch 22 situation. Eqivelant to the old 'jobs for life' concept which in other facets of industry and commerce died a death ages ago. LOL

Michael

[InformedSearcher]

The Freedom of Information Act does not apply to the FOS, as it is a limited company and not a government/council department.

 

This is strangely enough something I was going to ask because I want to make a complaint about the FLA (nightmare) and of course the same applies it seems to appear. To change to off topic anyone reading have experience with Citifinancial/FLA at all?

Michael

[Kraken1]

 

"the original intent was always for the loan to be drawn in installments, and that whilst the accidential omission of this condition from the loan agreement has resulted in a technical breach of contract on the part of the bank, this was not the real reason the opening of the restaurant was delayed or the business failed"

 

 

Based on this passage it appears that the heart of the matter is that the adjudicator made a finding of fact - s/he was not satisfied that the breach of contract caused the loss and this was the reason your claim failed. They were not satisfied you demonstrated a causal link between the two.

 

the adjudicator is free to make such a finding based on the evidence presented to him; it is not a finding of law but a finding of fact.

 

This will need to be the point you need to argue. Leave all the other stuff out, it will confuse the issue and dilute your core argument. Everything hinges on you showing that the loss what caused by the breach.

 

As noted above, this will be very, very hard. You will need lots of supporting evidence, your assertion that this was the case will not be enough.

[david999]

I understand your point.

 

ok, iv lost track here, what have i to prove,

for me to prove the breach caused the losses, i have to prove the stage payments delayed the build.

 

the adjudicator has refused to discuss or raise this mater.

if he wont agree or disagree with wither the stage payments delayed the build, how can i prove my case?

 

what did i have to gain with stage payments?

if there was a 6 month holiday period?

 

adjudicator = no comment

 

He states " i have no way of knowing why the business failed but critical factors could include the location and competition as well as customer perceptions of service, quality and value for money"

 

He doesn't know what caused the failure, but he is happy to take wild guesses, maybe it was the tiles or the carpet that the customers did not like, maybe the waitress had brown hair and the customers likes blonde hair, you could go on all night, it all speculation.

 

he says, it was always the intention to get stage payments.

 

I WAS NEVER GIVEN THE OPTION TO RECIEVE THE FUNDS IN ONE WHOLE AMOUNT!.

THIS OPTION WAS WITHHELD FROM ME!

 

The bank admits breach of contract, have you any idea why he is not recomending atleast "nominal damages £100"

 

His bias towards the bank is more than blatant.

 

can you confirm if this is corect, the bank gets to see what i have writen but we don't see what they have said?

 

if so why

 

david999

[InformedSearcher]

'Kraken1' - I think the point with respect is not that. You have a contract from the bank who can only state one or the other. You cannot have a contract where the bank says 'Oh that's not what we meant and because of that we admit 'we' are in breach of contract'. That alone is the crux of the matter.

They admit it, they accept it however the adjudicator does not agree. From that we can simply say that a contract is not worth the paper it's written on and change it to 'we can do what we like, when we like'.

Once the bank freely admitted not a mistake but an acceptance 'they' were wrong that is cause enough to progress the matter to a satisfactory conclusion. The rest of if the business would have/have not suceeded is therefore a mute point. Something like the banks saying with hindsight they made errors and due to that they accept they made mistakes - in that case erm, huge ones! What rather surprises me is that doing staged loan disbursements makes the bank less in interest charges so one could call into conduct wheather that was an apt and professional financial decision initially.

Michael

Michael

[cerberusalert]

Maybe the Finance Industry will start adding the caveat into contracts "it was written by a wee girl so non binding".

[Kraken1]

I think the point with respect is not that. You have a contract from the bank who can only state one or the other. You cannot have a contract where the bank says 'Oh that's not what we meant and because of that we admit 'we' are in breach of contract'. That alone is the crux of the matter.

 

They admit it, they accept it however the adjudicator does not agree. From that we can simply say that a contract is not worth the paper it's written on and change it to 'we can do what we like, when we like'.

 

Once the bank freely admitted not a mistake but an acceptance 'they' were wrong that is cause enough to progress the matter to a satisfactory conclusion. The rest of if the business would have/have not suceeded is therefore a mute point. Something like the banks saying with hindsight they made errors and due to that they accept they made mistakes - in that case erm, huge ones! What rather surprises me is that doing staged loan disbursements makes the bank less in interest charges so one could call into conduct wheather that was an apt and professional financial decision initially.

 

Unfortunately, this is not the way the law works. A breach of contract alone means nothing, you can breach contracts left right and centre throughout all of July, it means nothing unless a loss has been caused by this breach. this is the dispute here - that whilst there was a breach of contract no loss has been suffered as a result of this.

 

It is not a mute point as to whether the business would or would not have succeeded (and why not), it is the entire crux of the case.

 

 

 

 

Turning to the argument, what you need to show:

 

or me to prove the breach caused the losses, i have to prove the stage payments delayed the build.

 

From what you have put above, it does not seem that this is disputed. It is accepted that there was a breach of contract and that this resulted in staged payments, which were in any event made late, and then this delayed the build.

 

the adjudicator has refused to discuss or raise this mater.

if he wont agree or disagree with wither the stage payments delayed the build, how can i prove my case?

 

It seems to be agreed to me, but this is not the crux of your case.

 

what did i have to gain with stage payments?

if there was a 6 month holiday period?

 

This is a red herring, I don;t think that this is relevant from what you have said.

 

 

He states " i have no way of knowing why the business failed but critical factors could include the location and competition as well as customer perceptions of service, quality and value for money"

 

Aha... for every post you put I get a clearer idea of the adjudicators reasoning. It appears to be the case that you did not satisfy him that the delay caused the business to fail. It is your job to prove this on the balance of probabilities. What evidence did you present to show him that the cause for the failure was the delay?

 

He doesn't know what caused the failure, but he is happy to take wild guesses, maybe it was the tiles or the carpet that the customers did not like, maybe the waitress had brown hair and the customers likes blonde hair, you could go on all night, it all speculation.

 

Exactly - he doesn't know. It is your job to prove to him that it was the delay that caused the failure. If you can't do this, you lose.

 

How long was the restaurant open? When did it actually shut?

 

 

The bank admits breach of contract, have you any idea why he is not recomending atleast "nominal damages £100"

 

Because this claim is essentially a commercial claim, the failure of a business and compensation for inconvenience etc is not available to business.

 

His bias towards the bank is more than blatant.

 

Based on what you have said, I cannot agree. It seems to me that he has been fairly straight - you didn't prove your case and he could make no other decision.

 

can you confirm if this is corect, the bank gets to see what i have writen but we don't see what they have said?

 

I don't know - I don't work for FOS. In my experience both parties get to see the reps made by the other, at least initially and to establish each side of the dispute. It can't go forever though and at some point the adjudicator has to just make a decision and stop swapping allegations. You might be able to SAR them to see what they said. To be honest, their reps don't seem to be relevant here. There does not seem to be any allegation that you waived the breach or similar, although this might be a problem if you take it further.

 

What evidence did you present to FOS? can you list it? at the very least I might be able to tell you what is missing.

Edited July 9, 2009 by Kraken1

[InformedSearcher]

'Kraken1' did not the bank 'admit' they were at fault? Did they not admit they were in breach of contract? My point is when someone 'denies' the fact and here it appears rather different. My personal guess was that the bank expected to have to pay and the adjucator was there to give a decision based on that. My remarks as the the liability of the business success is therefore not relevant and also delving further we should understand that a bank does not issue funds based on guesswork. They will probably have used someone like 'Pinder' for the business viability report (which the applicant would pay for). Banks at least do seek other professionals dependant on the value of their loan and its purpose. In other words they would not have offered the loan on suggestion but with 'expert' advice and therefore that would normally deem the type of disbursement.

To comment that contracts can be breached on this occasion is rather the fact that 'we'll make it up as we go along' kind of reasoning. Having read this a few times I'm assuming the adjudicator decided to attempt to ask what he/she considered pertinant questions then when it got (simply) too complicated made a decision. The rest is history but on the basis on the type of business (which I have some knowledge of) it would seem reasonable for correct timing in opening such an establishment. One of those sayings about 'If you cannot make it at Christmas then you'll naver make it' comes to mind with refernce to that type of business.

Personally with enough facts, figures and data available I'd probably be able to make an expert assumption of probable viability but as said before the bank would already have done that. There is of course the case of reckless lending but I doubt for this it was the case.

Michael

[Suetonius]

I have read this a few times.. Please correct me if I am wrong Kraken1

 

I think he/she is saying that it would have to be demonstrated that had the bank released the funds as one payment rather than in stages, would the business still be trading sucessfully.

 

There are two elements.. Cause and Effect.

 

Did the way in which the funds were released directly result in the failure of the business?

Could other factors (economic etc) have contributed to the failure of the business?

 

Is it fair and reasonable to assume that the breach of contract was the only factor that resulted in the failure of the business?

[yourbank]

I have read this a few times.. Please correct me if I am wrong Kraken1

 

I think he/she is saying that it would have to be demonstrated that had the bank released the funds as one payment rather than in stages, would the business still be trading sucessfully.

 

There are two elements.. Cause and Effect.

 

Did the way in which the funds were released directly result in the failure of the business?

Could other factors (economic etc) have contributed to the failure of the business?

 

Is it fair and reasonable to assume that the breach of contract was the only factor that resulted in the failure of the business?

 

Suetonius, I think the OP on this one has said that staged payments rather than one whole tranche meant that completion was delayed..

Now in building contracts, correct me if I am wrong, can they charge the builder/contractor for failure to complete on time? That would be a loss.

 

With regards to failure, perhaps, showing the success of the individuals who run the shop, perhaps accounts from shops trading in the same area and making a profit of a similar type(which would be new information to the adjudicator) could prove loss.

If I understand Kraken1 there is no doubt of breach of contract but the question is the loss that arose from that breach of contract and evidence therein. Proof that the loan was agreed may not necessarily be enough to prove loss.

[Kraken1]

did not the bank 'admit' they were at fault? Did they not admit they were in breach of contract?

 

Yes, but this is not enough to establish a claim in court, or in adjudication. It needs to be shown that the loss flowed from the breach. this is not the case here.

[InformedSearcher]

I think we should consider the building works for the 2012 Olympics as a great example. That'll be staged disbursements because it's planned as that. For a project of that size you would have to do staged payments. No cash, no work, no stadiums and no Olympics. The other factor as I mentioned earlier is that the bank in staged payments will make less interest profit.

In fact with further thought think of a simple case in a County Court or dare I say even OMG Judge Judy (in the US). We start with 'He/she owes me this and that' and the defendant grasping at straws to avoid accepting that or parting ...with the cash! In this case the adjudicator decided to make on the face of it an ill considered decision where as I see it the bank itself was only expecting him/her to be saying how much to pay out.

Michael

[Suetonius]

I think that we should also consider that the FOS is not a Court

 

On the subject of Courts (with regard to breach of contract):

 

In the House of Lords decision in, Jackson v Royal Bank of Scotland [2005], the claimants brought proceedings against the bank for breach of contract and claimed damages for loss of the opportunity to earn further profits. The House or Lords ruled that the claimants were entitled to damages for loss of the opportunity to earn profits. The claimants traded as a partnership. They carried on business under the name S. They were in the import/export business, importing and selling goods to customers in the United Kingdom. S's principal customer in the UK was another partnership called EB. The defendant bank, Royal Bank of Scotland, was the banker for both businesses.

 

The relationship between the two partnerships terminated when the transferable credit arrangements between the parties came to an end. The defendant was responsible for the termination because the defendant sent in error certain documents to EB instead of S.

 

The effect of the defendant's error was to reveal to EB the substantial profit S was making on the transactions. When EB discovered the size of the mark-up by S, EB terminated the relationship with S. As a result S ceased trading and was dissolved.

 

S brought proceedings against the defendant for breach of contract and claimed damages for loss of the opportunity to earn further profits from the relationship with EB. The judge held that S was entitled to damages. He held that there was a significant chance that S's trading relationship with EB would have continued for a further four years however in view of the uncertainties, S had reduced its projected profits (projected by S for each of those years for the purposes of his award and he increased the amount of the reduction year by year).

The defendant appealed.

 

The Court of Appeal rejected the defendant's submissions that:

 

• The claim for the loss of the repeat business was too remote;
  
• It was not in the defendant's reasonable contemplation that the disclosure of the profit that S was making would lead to the termination by EB of its trading relationship with S; and
  
• The relationship between S and EB was so unstable that, if any award were to be made, it should be simply one of general damages;
  

 

The Court of Appeal held that the judge was in error in his approach to quantum and that the award of damages should be limited to a period of one year from the date of the breach, with all other loss being regarded as too remote.

 

S appealed, contending that the defendant's liability was open-ended because it had not limited its liability in the contract to any particular period. The defendant cross appealed, claiming that the proper conclusion from the facts was that there was no foreseeable loss at all and that in any case any attempt to assess S's actual loss was so speculative that any award should be confined to one of general damages.

 

1. The appeal by S was allowed. The cross appeal was dismissed. The House of Lords held

 

• Once the confidential information was released there was no repeat business.
  
• There was no evidence that the parties had contemplated at the time of the contract that knowledge of the supplier's identity and that its contact details would lead inevitably to the knowledge of the prices which were being charged by it.
  
• The fact that EB had the means of obtaining the information if it chose to do so was irrelevant.
  
• In entering into a contract with the defendant, the effect of the contract that the defendant was obliged not to disclose the information, and S had an obvious and legitimate commercial interest in maintaining its confidentiality.
  
• There was no reason to suppose that, if it had been asked at the time of the contract, S would have agreed to the release of that information by the bank to EB.
  

S were entitled to an award of damages to put them in the same position as they would have been had the contract not been breached.

 

2. The Court of Appeal had erred in its decision to limit the defendant's liability to a period of one year:

 

• The bank had not included any provision in the letter of credit limiting its liability for the loss of repeat business to any particular period.
  
• In the circumstances the award which the judge had made, on a reducing basis extending over a four year period, was as good an estimate as could now be made of the effect on S's profits of the bank's breach of contract.
  

The House of Lords reversed the Court of Appeal's decision.

[cerberusalert]

When you applied for this business loan didn't you have to produce a business model including projected earnings to the bank before they agreed to the loan?

 

If you did then surely that would be evidence in itself that the bank accepted what your *business* should have generated within that period?

[Kraken1]

Nice case - it shows that you need to prove the loss.

 

When you applied for this business loan didn't you have to produce a business model including projected earnings to the bank before they agreed to the loan?

 

This would not show that the reason for the loss was caused by the delay though.

[david999]

I was informed by adjudicator, "final information required before i conclued the case. can you please reply by the 14th july.

 

 

I answered his questions and posted my reply thur 25 june, recieved his final conclusion dated tue 30th june,

i thought to myself "by god that was quick". it didn't take him long to make his mind up, considering the questions i answered were quite complicated.

 

found this artical dated june 19 2009

 

NOW I KNOW WHY IT WAS ALL OVER SO QUICKLY

INCLUDING AN ADDMISSION FROM THE BANK OF BREACH OF CONTRACT AS "A WEE MISTAKE"

 

HAVE A READ AT THIS

 

 

Whistleblower claims FOS adjudicators risk rushing complaints

 

• Story by: Sharon Flaherty
  
• Magazine: FTAdviser
  
• Published Friday , June 19, 2009
  

A whistleblower has attacked the Financial Ombudsman Service (FOS) over payments to adjudicators, claiming it is paying on a case-by-case basis and essentially encouraging a "slapdash" approach to the assessment of complaints.

Advertising

According to the whistleblower, adjudicators employed by the FOS are currently being offered £140 per case they assess.

However, he claims that it is general practice for adjudicators to be paid by the day, rather than on a case-by-case basis, and that day rates are on average around £220 per day.

He is concerned that by paying adjudicators on a case-by-case basis, they are essentially being rewarded for the volumes of cases they assess, and that this may inadvertently act as a motivator to rush through complaints.

He said: "The more cases they can close the more they get paid. There is a conflict of interest."

According to the whistleblower, a complex investment complaint could take an adjudicator as much as a whole week to investigate, while others could take five or six hours, but he stressed that paying on a case-by-case basis introduced "risk" into the process.

He said: "To do both parties justice you have to unravel what the complainant wanted at the time and what their resources were. What was their level of knowledge. This is important."

Responding to the accusations, a spokeswoman for the FOS, said: "Given the record number of cases it is important that the ombudsman service has ways of paying our adjudicators appropriately to deal with cases efficiently - while meeting the highest standards of fairness."

In the year 1 April 2008 to 31 March 2009, the FOS dealt with 127,471 new complaints.

Broken down, investments and pensions made up 17.5 per cent of complaints, banking and credit made up 43 per cent of complaint while insurance made up 39.5 per cent of total complaints.

Investment linked products raked in 5,798 complaints in the year ending 31 March 2009, more than double the number brought to the FOS the year before.

[pompeyfaith]

David the above is interesting and sure does sound like that is happening with my case do u have a link to where u read that

[pompeyfaith]

i took my complaint to them because what the bank was offering did not come anywhere near what i paid and the FOS did not even investigate my complaint just said the co-ops offer was good and i should acept

[david999]

FTAdviser.com - Whistleblower claims FOS adjudicators risk rushing complaints