Is my FirstPlus Secured Loan unenforceable?

[angling_man]

Hi,

 

I have recently won a PPI reclaim from FirstPlus, but while reviewing the SAR, I discovered they'd clearly misled me regarding the interest rate too.

 

The terms of the loan have been corrected since the PPI refund, and are now £40k over 240 months with almost 5 years of payments (approx £19.5k) made to date. The loan was for consolidation of unsecured debt.

 

I've been studying the telephone recordings supplied in the SAR and there are a few things to be noted regarding how they sold this secured loan to me...

 

1. I clearly tell the Sales Rep I'm looking for a fixed-rate loan, but she continues to sell me the secured loan without revealing it's a variable rate.

 

2. She tells me I am able to make lump-sum payments of 10% or more at any time, but doesn't tell me there are huge fees associated with this.

 

3. She tells me I can change the terms of the loan if my circumstance change, but doesn't tell me there is a fee for doing this.

 

4. She tells me unsecured loans would not suit me needs as the repayment terms are limited and they do not allow early or lump sum repayment. I now know this was a blatant lie.

 

5. When we finally agree on the sum to be borrowed, she quotes me 8.9%, where as the previous quote had been quoted at 7.9%. When challenged she 'checks' and maintains they'd always quoted 8.9% - 7.9% was clearly quoted in the recordings!

 

6. At one point she tells me a secured loan will put me in a better position should I ever want to remortgage. That seems like a load of BS to me too.

 

7. At no point did she do any checks of my outgoings, relying purely on my credit file to determine if I could afford the repayments. Surely they are required to be far more thorough for a loan of that magnitude!

 

8. I now know the loan was inappropriate for my needs and served only to make my financial position even worse. Surely they are obliged to ensure the loan is suitable for the borrower.

 

I feel as though they've definitely been underhanded in selling me this secured loan, in paricular by selling me a variable rate loan under the pretences of it being fixed rate!

 

Since the loan started, the interest rate has soared - 9.4%, 9.7%, 10.2%, 10.5%, 10.8%, 9.7% (for 2 months only), 10.2%, 10.2%, 10.5%. They've consistently passed on any base rate rises, but only one base rate cut. This is exactly why I wanted a fixed rate.

 

So, what should I be trying to do here. They admitted mis-selling the PPI, so they've already admitted their sales rep failed to follow the correct procedures.

 

Can I claim the loan agreement is unenforcable (i.e. repay the original amount with zero interest)? Or should I insist on them fixing the interest rate at 8.9% and refunding the excess I've paid to date? Or should I just insist they pass on the recent rate cuts?

 

Should I seek professional help with this one, or can I go it alone?

 

Any advice is most welcome.

 

Many thanks,

AM

[jansus]

in the "key facts " that you should have been given there should be a copy of their complaints proceedure .

 

It is probably that you should make an official complaint to them and then to the FOS if you get no Joy. But you have to take the recommended route.

 

 

Not sure how you would stand if what you have signed is different to what you were told - but my attitude is nothing ventured nothing gained - so for the sake of a few letters ( recorded of course!) its is worth a try.

 

Jan

[angling_man]

I plan to write to them as you've suggested, but would like to know what sort of resolution I should be asking for in my complaint. Or should I leave it open for them to make an offer?

 

Thanks,

AM

[jansus]

Not sure to be honest - a bit outside my area of knowledge.

 

But I think the main thing is to set out the facts and make an official complaint and wait for their comments and then if you decide to go to the FOS any compansation would be up to them to decide.

[angling_man]

That's what I'll do then, unless anyone else has any advice?

 

Thanks,

AM

[incipience]

angling man, this could be deemed misrepresentation, I would forget about the FOS and go straight down the routes of legal action.

[angling_man]

I did consider legal action, but from searching the internet all I could find were legal firms that require large upfront payments just to consider whether or not to take the case on.

Can anyone recommend someone who can help me with this, say on a no-win-no-fee basis. I understand they are out there, but I can't seem to find them.

Thanks,

AM.

[web2dude]

If the chaps here can't help, I've just started talking to a company called Stephensons who were recommended on this forum: Stephensons Solicitors LLP provides legal advice for all aspects of your business or personal life. We focus on efficiently delivering what you need, when you need it.  

 

I'm not sure what their fees are yet, but they seem to offer a free assessment service. I'll post again if I get any more info

[angling_man]

Nice one! I've sent them an e-mail about my situation and we'll see what they say.

 

Looks like they do a free assessment and work on no-win no-fee basis.

 

If anyone has any other input, I'm still all ears...

 

Thanks,

AM

[jansus]

IMO I think you should still make an official complaint and give them a chance to reply. I think this should only be a case for court action and the possible consequences if this fails.

 

IMO:)

[incipience]

this company has developed an art in refusing people, I would not advise anyone when dealing with Firstplus to simply go down the route of the complaint process and then FOS.

 

Hit em fast and Hit em hard.. legal action all the way.

 

Furthermore, unenforeable loans are a legal issue and can not be ruled by an FOS adjudicator, issues such as Fiduciary Duty, and/or misrepresentation are something that requires litigation.

 

Just ensure that you dont use a claims company, use only a solicitor as they are the only ones that can claims fees from the other party.

[angling_man]

I really appreciate all the input here.

 

Basically I'd like to know if I have a case and what the possible risks are. I did draft a letter, but haven't sent it to FP yet as I don't know what I should be asking for. It was easy with PPI - 'give me my money back plus all the interest'. It's not so easy with this loan.

I've made £20k worth of payments on the £40k loan, although the outstanding balance is probably still well over £30k.

Based on how they sold the loan to me, should I go for a write off of the remaining balance, make a settlement offer (say £10k) or make them fix the interest rate at 8.9% and continue with the loan payments.

If I write to their complaints team, I feel I need to make my expectations clear. I don't want to undersell myself or ask for something they'll never agree to. Problem is, I don't really know what I can realistically push for.

I hope that makes sense.

 

AM.

[incipience]

What you are talking about is that you are trying to prove that the company had breached it duty when processing your loan.

 

If for example their was a mistake on the Credit Agreement, if it was a single mistake then your case would be unlikely to succeed as there is already precedence that despite the mistake and if it was the only mistake the loan would still be enforceable.

 

Furthermore, loans over £25,000 were not regulated by the Consumer Credit act. The reasons for this is that it was on the assumption that anyone taking a loan of over this amount would of course seek legal advice before doing so.

 

Were you referred the loan from a broker. Under common law principles of agency, a broker owes fiduciary duties to act in the client's best interests and not to put himself in a position of conflict or make a secret profit. The broker would of had an incentive to look for a lender who paid the best commission, rather than getting the best deal for his clients. The only way he could act without breaching his fiduciary duty would be if the borrowers had consented. Significantly, the lender, who had paid the commission knowing that the broker was acting as the agent of the borrowers, could be found liable as an accessory to that breach.

 

Now in a case such as this, and no disclosure was made then you are very much able to have the loan declared unenforceable.

 

In your case however, you are arguing that the sales person had misrepresented the product. Which of course you could have legal redress under 2 possible laws, first being the Misrepresentations Act, and The Trade Descriptions Act.

 

If this was a loan covered by the consumer credit act then you could argue the points you have made under that act, as it would clearly be in breach of several of its principles, however you now need to take a different approach.

 

I would not get into all the details above, as were you to then take it to the FOS, they would look at what information you have provided and would most likely rule against you.

 

What you need is for the Ombudsmen to make its own judgements based on the facts, so include copies of calls. In your complaint to the ombudsmen make sure you dont get overly confident the FOS really only likes real consumers who are vulnerable and unsophisticated, just as most consumers actually are.

 

If you come across citing the basic crap that you read on forums, they will have seen it a thousand times, and it is likely to count against you, as you will come across as a highly learned and educated person who should of known better as to what he was getting into in the begining. Does that make sense.

 

From what I read, it is clearly that they failed to treat you fairly and have acted against your best interests.

 

I would just write to them stating that you have reviewed the calls and you feel that the information provided was misleading, at the time when taking out the loan you were in a desperate situation and not in a position to understand clearly what was going on. The skills of the sales person had you confused as to what you were asking and ultimately signing.

 

Just dumb it down.. You would then go on to request that the loan be adjusted fairly.

 

Of course it is very unlikely that they will, at which time you can forward it on to the ombudsmen. Based on the information I think you have grounds for compensation at the very least.

 

With regards to the loan. I know you dont want to hear this, but you did accept the money and you have since spent it, if everyone started to have their loans declared unenforceable the economy would collapse.

 

I do appreciate that you are still buzzing off the PPI refund, and you should be thankful that you had this complaint upheld. I know of only 3 other such cases in almost thousands that had this outcome.

 

However, because of the PPI case, you have a better shot at getting the loan restructured as it was found that the PPI was mis-sold ergo, its possible that there was also failings in the selling of the loan.

 

You have to balance the probabilities of success, go for legal action or go for adjudication.

 

Reading your case again, I would plead ignorance and go to the Lender and then the FOS..

 

If no resolve then litigation is the way forward.

 

Hope that helps.

[angling_man]

Thanks for the excellent explanation, it really helps clarify things. To be honest I'm not expecting to get the loan written off, although it would be nice, but they did screw me over so I don't see why they should earn any interest out of me.

 

I'll have a think about it over the weekend, see what Stephensons Solicitors say on Monday, then decide on my approach. In the meantime, any other advice is most welcome.

 

btw, haven't you heard? The economy is already collapsing

 

AM.

[jansus]

Your first post explained your concerns very well and I would agree it is good to do the letter in your own words .

 

I would clearly head up the letter official complaint regarding account number xxxxxx

 

Having recieved the information I requested on my above account I would bring to your attention the following concerns which are clearly proven in conversations on the following dates:

 

etc.

 

 

Then at the end please consider this to be an official complaint as to how I was sold this product and the discrepancies between the product I thought I was signing for and what I actually received.

 

Please ensure you reply to all my questions with a full explanation as I wish to give to the opportunity to resolve this matter without taking further action:rolleyes:

 

 

Or words to that effect.

 

 

 

Keep it polite and to the point

 

 

Then you can post up the reply - should be interesting.

[ayman]

Hi AM

I am really interested in your issue with first plus, I am in the same boat as you but unfortunately my loan is twice as much as yours. I have requested the recorded calls and I am waiting for them, so please please please keep us posted on how things are panning out.

Regards

Ayman

[incipience]

Ayman, was your loan through a broker?

[ayman]

yes, i have done it through moneysupermarket.com

[ayman]

After a careful consideration I have managed to speak to the FSA and made a complaint against First Plus, the advice I got back “I have a case against First Plus”. So I did my research and I found a solicitor that is welling to take the case and provided him with recorded calls that we made to First Plus and how they miss sold the PPI to us, what you guys do not know and I think a lot of us has missed, is the insurance policy only valid for five years, and the worst part, if you have a joint application only the lead applicant is covered. These details were never disclosed to any of us, and finally the money back from the insurance is not guarantee that you get it back “it is , they will not send you a cheque they will deduct it from your loan, and that is only if you wrote to them 30 days before the end of your five years.

[MRS_P]

Any updates on this ayman

[ayman]

offered every penny back with all the interest, but the fight is not over yet

[intheblack]

I have had one DSAR returned to me but it did not have any telephone

conversations in it. Also people seem to apply for a CCA what am I

applying for and does it carry a cost like the DSAR?

[Suetonius]

I have had one DSAR returned to me but it did not have any telephone

conversations in it. Also people seem to apply for a CCA what am I

applying for and does it carry a cost like the DSAR?

 

Hello intheblack

 

A thread has been created for you

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?305900-unregulated-loan-getting-confused

 

It is impossible to answer your questions in relation to CCA requests and the OFT comments in regard to enforceability without further details, as the CCA might have nothing to do with your loan......

Edited May 22, 2011 by Suetonius

[spudafett]

offered every penny back with all the interest, but the fight is not over yet

 

Hello ayman,

 

I have recently been trying to see if my loan was mis-sold. However, I was told as it was a broker lead, FirstPlus weren't to blame, and this was by the FOS. The FSCS won't look at it as it is a second charge on the house.

 

Could you possibly reply with some quick details of your case against FirstPlus, and which solicitor you used please?

 

Cheers,