Court Case #2 - Northern Rock

[Luxxinterior]

You could look at this which may help your fight.

 

http://www.stjameschambers.co.uk/PPI...an%20Banks.pdf

 

aa

Hi Alanalana ...

That is very useful information...

Can I recruit your knowledge on the PPI issue?

 

Am I fighting a losig battle?

As this is allocated to fast track... the costs applied for by NR will obviously be a lot more. The debt as it stands is £3k+ ...it could turn into 5 figure sums if we lose..

 

Have I got the PPI thing right?

 

PPI applied (knowingly/Unknowingly) and interest applied at the loan apr (8.9%)...this makes the prescribed terms inaccurate as they cannot include the amount for PPI in the total charge for credit... therefore the agreement is unenforceable, even though it was signed 5/6/07 a few days after the 2006 amendment was brought in?

 

Also, the Judge originally dismissed the DN argument until we pointed out that the amount of arrears on the copy supplied by NR ( they rely on that in court) is different to the original DN I received and conveniently found on the day of the SJ hearing by £5.

 

Does the fact that either oneof the DN's...invalidates it?

 

We may be taking quite a risk by proceeding here

 

Any advice would be great

[Luxxinterior]

Hi Alanalana ...

That is very useful information...

Can I recruit your knowledge on the PPI issue?

 

Am I fighting a losig battle?

As this is allocated to fast track... the costs applied for by NR will obviously be a lot more. The debt as it stands is £3k+ ...it could turn into 5 figure sums if we lose..

 

Have I got the PPI thing right?

 

PPI applied (knowingly/Unknowingly) and interest applied at the loan apr (8.9%)...this makes the prescribed terms inaccurate as they cannot include the amount for PPI in the total charge for credit... therefore the agreement is unenforceable, even though it was signed 5/6/07 a few days after the 2006 amendment was brought in?

 

Also, the Judge originally dismissed the DN argument until we pointed out that the amount of arrears on the copy supplied by NR ( they rely on that in court) is different to the original DN I received and conveniently found on the day of the SJ hearing by £5.

 

Does the fact that either oneof the DN's...invalidates it?

 

We may be taking quite a risk by proceeding here

 

Any advice would be great

 

 

Hi Slick,

The judge wanted a much less "legal" Witness Statement for the next hearing...so I have been working on this now...havent got very far really, but I think it makes clear the points I am trying to make.

 

Does this look Ok so far?

____________________________________________________________

In the blah blah blah.....

 

 

1. On or about the 5/6/07 the Defendant rang Northern Rock regarding one of their low rate loans.

 

2. The Defendant explained to the agent of her requirements and after a lengthy phone call it was decided that she could borrow a total of £4k at a rate of 8.9% interest over 4 yrs (48 months).

 

 

3. The Defendant has no recollection of any discussion/explanation regarding “Payment Protect Gold” being part of the overall Credit, or that the Defendant would have to pay consequent interest as a result of the application of this product.

 

4. In general the Defendant makes a point of NOT accepting Payment Protection Insurance for any financial agreements, and so is surprised this has been applied to the agreement.

 

5. From the resulting Consumer Credit Agreement (Exhibit xxxx), it is clear that the Defendants signature is indeed in the relevant section relating to “Payment Protect Gold”, however it is not admitted that the Defendant was made sufficiently aware of the terms and conditions of the product, nor of the fact that premiums for this product would be paid up front to another party, and added to the total loan amount, total charge for credit at a contractual rate of 8.9%.

 

6. Indeed, because of the fact that the Defendant makes a point of not accepting “Payment Protect Gold”, the Defendant has indicated that she is of the opinion that the only way she would accept such an agreement is if it was indicated that the acquiring of funds would not be accepted unless the insurance element was accepted.

 

7. The fact that the insurance is not cancellable without terminating and restructuring the entire agreement strengthens the opinion of the Defendant that the Insurance policy was not optional in any sense, and merely a way of capitalising on a supposed low rate loan which would purely “line the pockets” of the claimant for the duration of the loan.

 

a. At no time during the conversation with Northern Rocks Agents was the policy explained in terms of

b. what is covered by the policy,

c. what is not covered by the policy,

d. how long the policy runs for,

e. how to cancel the policy.

 

8. The Defendant has since become aware that the practice of selling PPI policies in this way has since been banned and deemed undue enrichment for financial organisations with little or no benefit for the consumer.

 

9. The Defendant received the Consumer Credit Agreement via post, signed it and returned it to Northern Rock Offices

 

10. The Defendant admits not examining the Financial details of the agreement, but had no reason to as funds agreed for the loan (£4k) would be advanced.

 

11. The Defendant was unaware of the additional application of PPI premiums to the total loan amount and therefore not aware that she would as a result be paying much more per Month than if the PPI policy had not been added.

Obviously, I need exhibits etc...but its a beginning

[Luxxinterior]

Hi...

I was reading here last night somewhere, a witness statement i think, after a case was allocated to fast track.

It basically requested that the case remain in the small claims as you would not be able to pursue the case otherwise, therefore not getting your "human righht" to a fair trial.

 

Do you think it would be worth sending this letter for this case?

 

As the SJ was chucked out, their solicitor requested that the claim go to fast track! I was not in the room at the time, and only found this out later.

 

Has anyone successfully pleaded this and won?...ie: get their case back to small claims?

[steven4064]

What is the value of the claim? Are there any 'complicating issues'?

[Luxxinterior]

What is the value of the claim? Are there any 'complicating issues'?

 

Hi Steven,

The claim is for under £5k, but because of the complications around PPI, the Judge said he would allocate it to fast track on the solicitors request.

 

As I said I was not in the room at the time, but the solicitor did say before the hearing that if SJ was dismissed...she would ask for allocation to fast track.

[steven4064]

So are you counterclaiming for mis-sold PPI? If so, on what basis?

[Luxxinterior]

Hi Steven

We are not counterclaiming.... not as yet anyway. We are saying the agreement is unenforceable, after advice on here, due to PPI being applied to the total loan amount and interest added, making the prescribed terms incorrect.

The PPI amount has also been included in the total charge for credit.

[Luxxinterior]

Hi,

Not having a lot of luck with responses on the PPI forum so Id like to post this here for some opinions please?

 

I am reading this...

http://www.competition-commission.or...nd_app_2_5.pdf ...very interesting!

 

How would I find out if NR received commission on the back of the PPI policy sold to myself and my wife?

 

Thinking out loud hear...

By virtue of the fact that they supposedly asked if we wanted the cover, and the fact that there is a tick box to choose on the agreement would surely imply that it was optional?

 

The Consumer Credit (Total Charge for Credit) Regulations 1980 say that the only way interest can be added to the policy as has been done in our cases is if they policy was COMPULSORY!!! Then they can do it.

 

The Consumer Credit (Total Charge for Credit) Regulations 1980 say that if the policy is OPTIONAL, then the policy amount cannot be added to the total charge for credit, and therefore interest cannot be added by including the policy in the total amount of the loan.

 

What happened in our case is

1. they ask you if you want it....cant really remember if they did actually ask, this made it optional as far as i can make out....

2. they included the total amount of the Policy with the total amount for the loan, and benefited from a nice 8% interest on the policy too!

 

This alone surely makes the agreement unenforceable? I mean as a result of this, the prescribed terms have got to be wrong which of itself makes the agreement unenforceable??

 

Can someone tell me if im barking up the right tree here please?

 

If I can show NR received Comission on top of it all, then I think we would have a really good case.

 

As this is allocated to the Fast Track, I am tentative and nervous. Can anyone offer an opinion please?

 

That link Claim Stayed – Due to Unenforceable CCA Test Cases. helps confirm this, but when its you about to put a lot on the line, you have to do a lot of thinking!!

 

If we are wrong we could see a claim for £3k (and £7k for mine) run into a lot more if they win!!

 

I really want to get this reallocated to small claims as it is under £5k...what do you think my chances are?

 

Help lol

[Luxxinterior]

Hi,

Not having a lot of luck with responses on the PPI forum so Id like to post this here for some opinions please?

 

I am reading this...

http://www.competition-commission.or...nd_app_2_5.pdf ...very interesting!

 

How would I find out if NR received commission on the back of the PPI policy sold to myself and my wife?

 

Thinking out loud hear...

By virtue of the fact that they supposedly asked if we wanted the cover, and the fact that there is a tick box to choose on the agreement would surely imply that it was optional?

 

The Consumer Credit (Total Charge for Credit) Regulations 1980 say that the only way interest can be added to the policy as has been done in our cases is if they policy was COMPULSORY!!! Then they can do it.

 

The Consumer Credit (Total Charge for Credit) Regulations 1980 say that if the policy is OPTIONAL, then the policy amount cannot be added to the total charge for credit, and therefore interest cannot be added by including the policy in the total amount of the loan.

 

What happened in our case is

1. they ask you if you want it....cant really remember if they did actually ask, this made it optional as far as i can make out....

2. they included the total amount of the Policy with the total amount for the loan, and benefited from a nice 8% interest on the policy too!

 

This alone surely makes the agreement unenforceable? I mean as a result of this, the prescribed terms have got to be wrong which of itself makes the agreement unenforceable??

 

Can someone tell me if im barking up the right tree here please?

 

If I can show NR received Comission on top of it all, then I think we would have a really good case.

 

As this is allocated to the Fast Track, I am tentative and nervous. Can anyone offer an opinion please?

 

That link Claim Stayed – Due to Unenforceable CCA Test Cases. helps confirm this, but when its you about to put a lot on the line, you have to do a lot of thinking!!

 

If we are wrong we could see a claim for £3k (and £7k for mine) run into a lot more if they win!!

 

I really want to get this reallocated to small claims as it is under £5k...what do you think my chances are?

 

Help lol

 

Hi...Anyone available to provide an opinion? or advice please?

[caro]

My understanding is that PPI cannot be compulsory. It should also not be applied upfront and added to the loan, so it would seem to have been mis-sold

 

This link will be of interest to you if you haven't seen it before. http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/171037-multiple-agreements-falling-within.html

[Luxxinterior]

This is what I have at the moment as the main body for the Witness Statement... Should I reserve Exhibiting Legal stuff and include it in the defence instead?

 

Any advice welcome

 

 

The Events leading to the current action being taken

1. On or about the 5/6/07 I rang Northern Rock regarding one of their low rate loans.

2. I explained to the agent of my requirements and after a lengthy phone call it was decided that I could borrow a total of £4k at a rate of 8.9% interest over 4 yrs (48 months).

3. I have no recollection of any discussion/explanation regarding "Payment Protect Gold" being part of the overall Credit, or that I would have to pay consequent interest as a result of the application of this product.

4. In general I make a point of NOT accepting Payment Protection Insurance for any financial agreements, and so is surprised this has been applied to the agreement.

5. From the resulting Consumer Credit Agreement (Exhibit xxxx), it is clear that my signature is indeed in the relevant section relating to "Payment Protect Gold", however it is not admitted that I was made sufficiently aware of the terms and conditions of the product, nor of the fact that premiums for this product would be paid up front to another party, and added to the total loan amount, total charge for credit at a contractual rate of 8.9%.

6. Indeed, because of the fact that I make a point of not accepting "Payment Protect Gold", am of the opinion that the only way I would accept such an agreement is if it was indicated that obtaining the funds would not be possible unless the insurance element was accepted.

7. The fact that the insurance is not cancellable without terminating and restructuring the entire agreement strengthens my opinion that the Insurance policy was not optional in any sense, and merely a way of capitalising on a supposed low rate loan which would purely "line the pockets" of the claimant for the duration of the loan.

8. I have since become aware that the practice of selling PPI policies in this way has since been banned and deemed undue enrichment for financial organisations with little or no benefit for the consumer.

9. I received the Consumer Credit Agreement via post, signed it and returned it to Northern Rock Offices

10. I admit not examining the Financial details of the agreement, but had no reason to as funds agreed for the loan (£4k) would be advanced.

11. I was unaware of the additional application of PPI premiums to the total loan amount and therefore not aware that I would as a result be paying much more per Month than if the PPI policy had not been added.

12. I continued to make payments towards the loan from April 2007 until Feb 2009, when myself and my family encountered financial difficulty due to the possibility of my husband almost being made redundant.

13. Financial advice indicated that as this any my other unsecured loans were a much lower priority than my Mortgage and Council Tax etc. I was advised to contact my creditors to advise them of my situation.

14. On or about the 18th Feb 2009, I contacted Northern Rock to make them aware of my situation and on that date offered a token payment of £5.

15. Northern Rock accepted my payment of £5 and I attach a bank statement from that time as evidence of that transaction (Exhibitxxxx).

16. Some time after that phone call, I received a Default Notice (Exhibitxxxx) stating that the arrears amount at that time was £xxxxx.

17. On or about the xx/xx/xx I received a Termination Notice (Exhibitxxxx) stating an arrears amount of £xxxxx.

18. This amount failed to take into account the token payment made on the 18/02/09.

19. I am of the opinion that regardless of the amount of the token payment, indeed, had the payment even been the amount in full, the account would still have been terminated in this manner

20. On or about the xx/xx/xx I received notification of legal action regarding the Loan.

21. Upon commencement of Legal action I requested a copy of my Credit Agreement from Northern Rock.

22. After examining my Credit Agreement, it became clear that there was a problem with the amount initially borrowed and the amount required to be repaid.

23. Though I had borrowed an initial amount of £xk at a rate of 8.9%, applying that rate to the amount did not reflect the amount to be repaid.

24. After adding to the total amount for the loan, the total amount for the PPI policy, which had been applied, it was evident that Northern Rock had lumped the two totals together and added 8.9% interest to both the loan and the PPI Policy.

25. I began investigating this practice by studying

a. reports from the Competition Commission into the sale of PPI policies, (Exhibitxxxx)

b. the Consumer Credit Act 1974 and 2006 s???? (Exhibitxxxx)

c. The Consumer Credit (Total Charge for Credit) Regulations 1980,(Ehibitxxxx)

d. Case notes from London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)(Exhibitxxxx)

26. I drew the following conclusions,

a. PPI Policies should always be an optional component, and not a condition of obtaining credit

b. PPI should be thoroughly assessed by the seller to ensure the product is suitable for the receiver.

c. PPI can only be included in the total Charge for Credit if and only if the PPI policy is a condition of obtaining funds

d. Northern Rock will most likely have received "secret" Commission from Pinnacle Insurers for selling an entire policy up front, resulting in an "unfair relationship" (Exhibitxxxx) making the agreement unenforceable.

e. By virtue of the fact that a tick box and signature box is provided for consent to provide PPI on the Consumer Credit Agreement, it is taken that this policy is an optional component.

f. PPI cannot be included in the total charge for credit where an insurance policy is offered as an optional component.

g. The application of the PPI policy in this manner, makes the prescribed terms incorrect, and therefore invalidates the agreement.

Edited October 6, 2009 by Luxxinterior

[Luxxinterior]

Good Evening all,

I have been adding adding more to the witness statement for this claim. an somebody please take a look to see if it is ok so far?

 

I was told our last one was too legal...so i simplified it into a diary of events, and also slipped in the request for re-allocation to small claims.

 

I just noticed that I have not said a lot about PPI which is the crux of the argument now.

 

Am I leaving out crucial information, or have I covered everything?

 

Also, In listing previous cases to support my argument, how can I include the recent success story where the lady had her £8k debt written off as a result of PPI?

 

Anyway...please, please, please, if someone gets a chance have a read and let me know if i need to change or add anything I clearly have not thought of.

 

Thanks so much

 

IN THE xxxxxxx COUNTY COURT

CLAIM NO. xxxxxxxx

Between

 

Northern Rock PLC

Claimant

and

 

xxxxxxxxx

Defendant

 

________________________________________________

Witness Statement

__________________________________________________

I, xxxxxxxxxxxxxxxxx will state as follows:

 

1. I am the defendant in these proceedings .I make this witness statement in opposition to the claimant's application for summary judgment.

 

2. The matters referred to in this witness statement are within my own knowledge, except where I have indicated otherwise. Where any matters contained in this witness statement are not within my own knowledge, I have stated the source of my information.

 

Allocation to Fast Track

1. The claim involves a consumer dispute and I respectfully request that this case be re-allocated to the small claims court which is designed particularly for consumers.

2. I am a litigant in person and not familiar with the more complex procedures in the fast/multi track. I understand from the HMCS website that it is advisable to have legal representation in the fast or multi track, whereas in the small claims track legal representation is discouraged. I can not afford legal representation and thus require a hearing in the small claims track so that my right to a fair hearing is not prejudiced

3. Under the Overriding Objectives of the Civil Procedure Rules there is an obligation on the judge to ensure the parties are placed on an equal footing. As the Claimant is a huge financial institution it would be unfair to place this in the fast or multi - track as this would give the Claimant the advantage in being able to bear the risk of costs whereas I do not. The Claimant has ready access to legal advice and representation whereas I am a litigant in person

5. The claim is below the 5K threshold. The Defendant believed it would be dealt with in the small claims court and did not anticipate the risk of bearing the costs in the fast or multi - track. To allocate the claim outside the small claims track would be grossly unfair

6. The claim does not merit allocation to the Fast Track as it is quite a simple claim to resolve. As the Claimant added the total amount of PPI to the total charge for credit, and enjoyed the benefits thereof, including undeclared commission, makes the agreement unenforceable.

 

The Events leading to the current action being taken

1. On or about the 5/6/07 I rang Northern Rock regarding one of their low rate loans.

2. I explained to the agent of my requirements and after a lengthy phone call it was decided that I could borrow a total of £4k at a rate of 8.9% interest over 4 yrs (48 months).

3. I have no recollection of any discussion/explanation regarding "Payment Protect Gold" being part of the overall Credit, or that I would have to pay consequent interest as a result of the application of this product.

4. In general I make a point of NOT accepting Payment Protection Insurance for any financial agreements, and so is surprised this has been applied to the agreement.

5. From the resulting Consumer Credit Agreement (Exhibit xxxx), it is clear that my signature is indeed in the relevant section relating to "Payment Protect Gold", however it is not admitted that I was made sufficiently aware of the terms and conditions of the product, nor of the fact that premiums for this product would be paid up front to another party, and added to the total loan amount, total charge for credit at a contractual rate of 8.9%.

6. Indeed, because of the fact that I make a point of not accepting "Payment Protect Gold", am of the opinion that the only way I would accept such an agreement is if it was indicated that obtaining the funds would not be possible unless the insurance element was accepted.

7. The fact that the insurance is not cancellable without terminating and restructuring the entire agreement strengthens my opinion that the Insurance policy was not optional in any sense, and merely a way of capitalising on a supposed low rate loan which would purely "line the pockets" of the claimant for the duration of the loan.

8. I have since become aware that the practice of selling PPI policies in this way has since been banned and deemed undue enrichment for financial organisations with little or no benefit for the consumer.

9. I received the Consumer Credit Agreement via post, signed it and returned it to Northern Rock Offices

10. I admit not examining the Financial details of the agreement, but had no reason to as funds agreed for the loan (£4k) would be advanced.

11. I was unaware of the additional application of PPI premiums to the total loan amount and therefore not aware that I would as a result be paying much more per Month than if the PPI policy had not been added.

12. I continued to make payments towards the loan from April 2007 until Feb 2009, when myself and my family encountered financial difficulty due to the possibility of my husband almost being made redundant.

13. Financial advice indicated that as this any my other unsecured loans were a much lower priority than my Mortgage and Council Tax etc. I was advised to contact my creditors to advise them of my situation.

14. On or about the 18th Feb 2009, I contacted Northern Rock to make them aware of my situation and on that date offered a token payment of £5.

15. Northern Rock accepted my payment of £5 and I attach a bank statement from that time as evidence of that transaction (Exhibitxxxx).

16. Some time after that phone call, I received a Default Notice (Exhibitxxxx) dated the 17th Feb 2009 stating that the arrears amount at that time was £212.78, and the balance on the account was £3731.09

17. The Claimants "copy" of the same Default Notice states an arrears amount £212.78 but an outstanding balance of £3726.09 which is incorrect.

18. This amount failed to take into account the token payment made on the 18/02/09.

19. I am of the opinion that regardless of the amount of the token payment, had the payment even been the amount in full, the account would still have been terminated in this manner

20. I am unable to calculate how the arrears stated amount to £212.78, as at the time the Default Notice was issued, the arrears amount to £151.39.

21. My understanding is that based on the fact that the Default Notice supplied by the Claimant contains incorrect financial information, the Default Notice is irredeemably invalid.

22. On or about the 31/03/09 I received a Formal Demand (Exhibitxxxx) stating an arrears amount of £329.17 and an outstanding balance of £3726.09

23. The Claimants Copy of the Formal Demand contains the same amounts for both arrears and loan balance.

24. Once again I am unable to calculate the arrears amount which now states £329.17, which is more than double the actual arrears amount just over one month later.

25. I ask that the claimant is put to strict proof that the amounts stated in terms of arrears and balance amount on both the Default Notice and the Formal Demand are correct. Failure to do so would certainly prove that the account has been terminated on the basis of incorrect financial information, thus invalidating both documents.

26. On or about the 24/04/09 I received notification of legal action regarding the Loan.

27. Upon commencement of Legal action I requested a copy of my Credit Agreement from Northern Rock.

 

Personal Protection Insurance

28. After examining my Credit Agreement, it became clear that there was a problem with the amount initially borrowed and the amount required to be repaid.

29. Though I had borrowed an initial amount of £4k at a rate of 8.9%, applying that rate to the total loan amount did not reflect the amount to be repaid.

30. After adding the total amount for the loan and the total amount for the PPI policy, which had been applied, it was evident that Northern Rock had lumped the two totals together and added 8.9% interest to both the loan and the PPI Policy.

31. I began investigating this practice by studying

a. reports from the Competition Commission into the sale of PPI policies, (Exhibitxxxx)

b. the Consumer Credit Act 1974 and 2006 s???? (Exhibitxxxx)

c. The Consumer Credit (Total Charge for Credit) Regulations 1980,(Ehibitxxxx)

d. Case notes from London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)(Exhibitxxxx)

 

32. I draw the following conclusions,

a. PPI Policies should always be an optional component, and not a condition of obtaining credit

b. PPI should be thoroughly assessed by the seller to ensure the product is suitable for the receiver.

c. PPI can only be included in the total Charge for Credit if and only if the PPI policy is a condition of obtaining funds

d. Northern Rock will most likely have received "secret" Commission from Pinnacle Insurers for selling an entire policy up front, resulting in an "unfair relationship" (Exhibitxxxx) making the agreement unenforceable.

e. By virtue of the fact that a tick box and signature box is provided for consent to provide PPI on the Consumer Credit Agreement, it is taken that this policy is an optional component.

f. PPI cannot be included in the total charge for credit where an insurance policy is offered as an optional component.

g. The application of the PPI policy in this manner, makes the prescribed terms incorrect, and therefore invalidates the agreement.

(Exhibitxxxx)

Edited October 6, 2009 by Luxxinterior

[citizenB]

Lux, Tonks is counterclaiming on the PPI issue in the following link,there might be something there that will help you.

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/183724-tonka99-sechiari-clark-mitchell-31.html#post2480098

 

HTH

[Luxxinterior]

Good Evening.

I think I have finished off my Witness Statement now...

 

Can somebody take a read of this and point out any mistakes I have made, or anything I missed? Just so I can concentrate on the defence now

 

Thanks

 

IN THE XXXXX COUNTY COURT

CLAIM NO. xxxxxxxxx

 

Between

 

xxxxxxxxxx

Claimant

and

 

xxxxxxxxxxxxx

Defendant

 

________________________________________________

Witness Statement

__________________________________________________

I, xxxxxxxxxxxxxxxx will state as follows:

 

1. I am the defendant in these proceedings .I make this witness statement in opposition to the claimant's application for summary judgment.

 

2. The matters referred to in this witness statement are within my own knowledge, except where I have indicated otherwise. Where any matters contained in this witness statement are not within my own knowledge, I have stated the source of my information.

Allocation to Fast Track

1. The claim involves a consumer dispute and I respectfully request that this case be re-allocated to the small claims court which is designed particularly for consumers.

2. I am a litigant in person and not familiar with the more complex procedures in the fast/multi track. I understand from the HMCS website that it is advisable to have legal representation in the fast or multi track, whereas in the small claims track legal representation is discouraged. I can not afford legal representation and thus require a hearing in the small claims track so that my right to a fair hearing is not prejudiced

3. Under the Overriding Objectives of the Civil Procedure Rules there is an obligation on the judge to ensure the parties are placed on an equal footing. As the Claimant is a huge financial institution it would be unfair to place this in the fast or multi - track as this would give the Claimant the advantage in being able to bear the risk of costs whereas I do not. The Claimant has ready access to legal advice and representation whereas I am a litigant in person

4. The claim is below the 5K threshold. The Defendant believed the claim would be dealt with in the small claims court and did not anticipate the risk of bearing the costs in the fast or multi - track. To allocate the claim outside the small claims track would be grossly unfair

5. The claim does not merit allocation to the Fast Track as it is quite a simple claim to resolve. As the Claimant added the total amount of PPI to the total charge for credit, and enjoyed the benefits thereof, including undeclared commission, makes the agreement unenforceable.

The Events leading to the current action being taken

1. On or about the 5/6/07 I rang Northern Rock regarding one of their low rate loans.

2. I explained to the agent my requirements and after a lengthy phone call it was decided that I could borrow a total of £4k at a rate of 8.9% interest over 4 yrs (48 months).

3. I have no recollection of any discussion/explanation regarding "Payment Protect Gold" being part of the overall Credit, or that I would have to pay consequent interest as a result of the application of this product.

4. I was not informed I could purchase Loan Protection Insurance from another source

5. At the time I was Insured elsewhere for life cover.

6. In general I make a point of NOT accepting Payment Protection Insurance for any financial agreements, and so was surprised this product had been applied to the agreement.

7. From the resulting Consumer Credit Agreement (Page xxxx), it is clear that my signature is indeed in the relevant section relating to "Payment Protect Gold", however it is not admitted that I was made sufficiently aware of the terms and conditions of the product, nor of the fact that premiums for this product would be paid up front to another party, and added to the total loan amount, total charge for credit at a contractual rate of 8.9%. Nor have I ever received any Policy documents relating to the Insurance policy,

8. Indeed, because of the fact that I make a point of not accepting "Payment Protect Gold", I am of the opinion that the only way I would accept such an agreement is if it was indicated that obtaining the funds would not be possible unless the insurance element was accepted.

9. The fact that the insurance is not cancellable without terminating and restructuring the entire agreement strengthens my opinion that the Insurance policy was not optional in any sense, and merely a way of capitalising on a supposed low rate loan which would purely "line the pockets" of the claimant for the duration of the loan.

10. I have since become aware that the practice of selling PPI policies in this way has since been banned and deemed undue enrichment for financial organisations with little or no benefit for the consumer.

11. I received the Consumer Credit Agreement via post, signed it and returned it to Northern Rock Offices

12. I admit not examining the Financial details of the agreement, but had no reason to as funds agreed for the loan £4,000, which was the amount I agreed to borrow, were to be advanced

13. I was unaware of the additional application of PPI premiums (£915.00) to the total loan amount or to the total charge for credit, and therefore not aware that I would as a result be paying much more per Month than if

the PPI policy had not been added.

14. Indeed, in retrospect, had the additional Premium of PPI not been added to the total charge for Credit, and to the total loan amount, it is most likely that I could have continued to make payments on the account.

15. I continued to make payments towards the loan from April 2007 until Feb 2009, when myself and my family encountered financial difficulty due to the possibility of my husband being made redundant.

16. Financial advice indicated that as this any my other unsecured loans were a much lower priority than my Mortgage and Council Tax etc. I was advised to contact my creditors to advise them of my situation.

17. On or about the 18th Feb 2009, I contacted Northern Rock to make them aware of my situation and on that date offered a token payment of £5.

18. Northern Rock accepted my payment of £5 and I attach a statement from that time dated 08/05/09 as evidence of that transaction (Pagexxxx).

19. Some time after that phone call, I received a Default Notice (Pagexxxx) dated the 17th Feb 2009 stating that the arrears amount at that time was £212.78, and the balance on the account was £3731.09

20. The Claimants "copy" of the same Default Notice states an arrears amount £212.78 but an outstanding balance of £3726.09 which is incorrect.

21. This amount failed to take into account the token payment made on the 18/02/09.

22. I am of the opinion that regardless of the amount of the token payment, had the payment even been the amount in full, the account would still have been terminated in this manner

23. I am unable to calculate how the arrears stated amount to £212.78, as at the time the Default Notice was issued, the arrears amount to £151.39.

24. My understanding is that based on the fact that the Default Notice supplied by the Claimant contains incorrect financial information, the Default Notice is irredeemably invalid.

25. On or about the 31/03/09 I received a Formal Demand (Pagexxxx) stating an arrears amount of £329.17 and an outstanding balance of £3726.09

26. The Claimants Copy of the Formal Demand contains the same amounts for both arrears and loan balance.

27. Once again I am unable to calculate the arrears amount which now states £329.17, which is more than double the actual arrears amount just over one month later.

28. I ask that the claimant is put to strict proof that the amounts stated in terms of arrears and balance amount on both the Default Notice and the Formal Demand are correct. Failure to do so would certainly prove that the account has been terminated on the basis of incorrect financial information, thus invalidating both documents.

29. On or about the 24/04/09 I received notification of legal action regarding the Loan.

30. Upon commencement of Legal action I requested a copy of my Credit Agreement from Northern Rock.

31. After examining my Credit Agreement, it became clear that there was a problem with the amount initially borrowed and the amount required to be repaid.

32. Though I had borrowed an initial amount of £4k at a rate of 8.9%, applying that rate to the total loan amount did not reflect the amount to be repaid.

33. After adding the total amount for the loan and the total amount for the PPI policy, which had been applied, it was evident that Northern Rock had lumped the two totals together and added 8.9% interest to both the loan and the PPI Policy.

34. I began investigating this practice by studying

a. reports from the Competition Commission into the sale of PPI policies.

b. the Consumer Credit Act 1974 and 2006.

c. The Consumer Credit (Total Charge for Credit) Regulations 1980.

d. Case notes from London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)

e. Most Recently the judgement at South Shields County Court in favour of the defendant due to PPI resulting in an Unfair Relationship with the Claimant and resulting in the entire agreement deemed completely unenforceable

The above shall be referenced in more details in my amended defence.

 

35. I draw the following conclusions,

a. PPI Policies should always be an optional component, and not a condition of obtaining credit

b. PPI should be thoroughly assessed by the seller to ensure the product is suitable for the receiver.

c. PPI can only be included in the total Charge for Credit if and only if the PPI policy is a condition of obtaining funds

d. Northern Rock will most likely have received "secret" Commission from Pinnacle Insurers for selling an entire policy up front, resulting in an "unfair relationship" making the agreement unenforceable.

e. By virtue of the fact that a tick box and signature box is provided for consent to provide PPI on the Consumer Credit Agreement, it is taken that this policy is an optional component.

f. PPI cannot be included in the total charge for credit where an insurance policy is offered as an optional component.

g. The application of the PPI policy in this manner,

 Means Northern Rock not only financially gained excessively by including the PPI policy in the total charge for credit, but also secretly and unannounced to me that they would receive a healthy commission as a result.

 Makes the prescribed terms incorrect, and therefore invalidates the agreement.

 Results in an "unfair relationship"

 Means the agreement was improperly executed,

 Makes the agreement unenforceable

 Means i am entitled to a reimbursement of any or all of the total PPI premium plus 8% interest.

36. I do not deny that an agreement has ever taken place between myself and the Claimant.

37. I do however deny ever entering into a fair or legitimate agreement with the Claimant.

38. I bring to the Claimants attention that examining the history of the agreement prior to commencement of Legal action will show consistent repayments up until the time I began to experience financial difficulty and approached them for help.

39. I am however appalled to discover the lengths that this Financial Organisation, (who themselves experienced financial difficulties, and only continue now to exist as a result of people like myself) will go to in order to ensure financial gain at the detriment of the very customers who blindly keep them in business.

Edited October 7, 2009 by Luxxinterior

[slick132]

Hi Luxx,

 

Ammendments in red including commas so look carefully............

IN THE XXXXX COUNTY COURT

CLAIM NO. xxxxxxxxx

 

Between

 

xxxxxxxxxx

Claimant

and

 

xxxxxxxxxxxxx

Defendant

 

________________________________________________

Witness Statement

__________________________________________________

I, xxxxxxxxxxxxxxxx will state as follows:

 

1. I am the defendant in these proceedings .I make this witness statement in opposition to the claimant's application for summary judgment.

 

2. The matters referred to in this witness statement are within my own knowledge, except where I have indicated otherwise. Where any matters contained in this witness statement are not within my own knowledge, I have stated the source of my information.

Allocation to Fast Track

1. The claim involves a consumer dispute and I respectfully request that this case be re-allocated to the small claims court which is designed particularly for consumers.

2. I am a litigant in person and not familiar with the more complex procedures in the fast/multi track. I understand from the HMCS website that it is advisable to have legal representation in the fast or multi track, whereas in the small claims track legal representation is discouraged. I can not afford legal representation and thus require a hearing in the small claims track so that my right to a fair hearing is not prejudiced

3. Under the Overriding Objectives of the Civil Procedure Rules there is an obligation on the judge to ensure the parties are placed on an equal footing. As the Claimant is a huge financial institution it would be unfair to place this in the fast or multi - track as this would give the Claimant the advantage in being able to bear the risk of costs whereas I do not. The Claimant has ready access to legal advice and representation whereas I am a litigant in person

4. The claim is below the 5K threshold. The Defendant filed the claim believing it would be dealt with in the small claims court and did not anticipate the risk of bearing the costs in the fast or multi - track. To allocate the claim outside the small claims track would be grossly unfair

5. The claim does not merit allocation to the Fast Track as it is quite a simple claim to resolve. The Claimant added the total amount of PPI to the total charge for credit, and enjoyed the benefits thereof, including undeclared commission, which makes the agreement unenforceable.

The Events leading to the current action being taken

1. On or about the 5/6/07 I rang Northern Rock regarding one of their low rate loans.

2. I explained to the agent my requirements and after a lengthy phone call it was decided that I could borrow a total of £4k at a rate of 8.9% interest over 4 yrs (48 months).

3. I have no recollection of any discussion/explanation regarding "Payment Protect Gold" being part of the overall Credit, or that I would have to pay consequent interest as a result of the application of this product.

4. I Was not informed that I could purchase Loan Protection Insurance from another source

5. At the time I was Insured elsewhere for life cover.

6. In general I make a point of NOT accepting Payment Protection Insurance for any financial agreements, and so was surprised this was applied to the agreement.

7. From the resulting Consumer Credit Agreement (Page xxxx), it is clear that my signature is indeed in the relevant section relating to "Payment Protect Gold", however it is not admitted that I was made sufficiently aware of the terms and conditions of the product, nor of the fact that premiums for this product would be paid up front to another party, and added to the total loan amount, total charge for credit at a contractual rate of 8.9%.

8. Indeed, because of the fact that I make a point of not accepting "Payment Protect Gold", am of the opinion that the only way I would accept such an agreement is if it was indicated that obtaining the funds would not be possible unless the insurance element was accepted.

9. The fact that the insurance is not cancellable without terminating and restructuring the entire agreement strengthens my opinion that the Insurance policy was not optional in any sense, and merely a way of capitalising on a supposed low rate loan which would purely "line the pockets" of the claimant for the duration of the loan.

10. I have since become aware that the practice of selling PPI policies in this way has now been banned and deemed undue enrichment for financial organisations, with little or no benefit for the consumer.

11. I received the Consumer Credit Agreement via post, signed it and returned it to Northern Rock Offices.

12. I admit not examining the Financial details of the agreement, but had no reason to as funds agreed for the loan £4,000, which was the amount I agreed to borrow, were to be advanced

13. I was unaware of the additional application of PPI premiums (£915.00) to the total loan amount or to the total charge for credit, and therefore not aware that I would as a result be paying much more per Month than if the PPI policy had not been added.

14. Indeed, in retrospect, had the additional Premium of PPI not been added to the total charge for Credit, and to the total loan amount, it is most likely that I could have continued to make payments on the account.

15. I continued to make payments towards the loan from April 2007 until Feb 2009, when myself and my family encountered financial difficulty due to the possibility of my husband being made redundant.

16. Financial advice indicated that as this any my other unsecured loans were a much lower priority than my Mortgage and Council Tax etc. I was advised to contact my creditors to advise them of my situation.

17. On or about the 18th Feb 2009, I contacted Northern Rock to make them aware of my situation and on that date offered a token payment of £5.

18. Northern Rock accepted my payment of £5 and I attach a statement from that time dated 08/05/09 as evidence of that transaction (Pagexxxx).

19. Some time after that phone call, I received a Default Notice (Pagexxxx) dated the 17th Feb 2009 stating that the arrears amount at that time was £212.78, and the balance on the account was £3731.09

20. The Claimants "copy" of the same Default Notice states an arrears amount £212.78 but an outstanding balance of £3726.09 which is incorrect.

21. This amount failed to take into account the token payment made on the 18/02/09.

22. I am of the opinion that regardless of the amount of the token payment, had the payment even been the amount in full, the account would still have been terminated in this manner

23. I am unable to calculate how the arrears stated amount to £212.78, as at the time the Default Notice was issued, the arrears amount to £151.39.

24. My understanding is that based on the fact that the Default Notice supplied by the Claimant contains incorrect financial information, the Default Notice is irredeemably invalid.

25. On or about the 31/03/09 I received a Formal Demand (Pagexxxx) stating an arrears amount of £329.17 and an outstanding balance of £3726.09

26. The Claimants Copy of the Formal Demand contains the same amounts for both arrears and loan balance.

27. Once again I am unable to calculate the arrears amount which now states £329.17, which is more than double the actual arrears amount just over one month later.

28. I ask that the claimant is put to strict proof that the amounts stated in terms of arrears and balance amount on both the Default Notice and the Formal Demand are correct. Failure to do so would certainly prove that the account has been terminated on the basis of incorrect financial information, thus invalidating both documents.

29. On or about the 24/04/09 I received notification of legal action regarding the Loan.

30. Upon commencement of Legal action I requested a copy of my Credit Agreement from Northern Rock.

31. After examining my Credit Agreement, it became clear that there was a problem with the amount initially borrowed and the amount required to be repaid.

32. Though I had borrowed an initial amount of £4k at a rate of 8.9%, applying that rate to the total loan amount did not reflect the amount to be repaid.

33. After adding the total amount for the loan and the total amount for the PPI policy, which had been applied, it was evident that Northern Rock had lumped the two totals together and added 8.9% interest to both the loan and the PPI Policy.

34. I began investigating this practice by studying

a. reports from the Competition Commission into the sale of PPI policies.

b. the Consumer Credit Act 1974 and 2006.

c. The Consumer Credit (Total Charge for Credit) Regulations 1980.

d. Case notes from London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)

e. Most recently, the judgement at South Shields County Court in favour of the defendant due to PPI, resulting in an Unfair Relationship with the Claimant and resulting in the entire agreement deemed completely unenforceable

The above shall be referenced in more details in my amended defence.

 

35. I draw the following conclusions,

a. PPI Policies should always be an optional component, and not a condition of obtaining credit.

b. PPI should be thoroughly assessed by the seller to ensure the product is suitable for the borrower.

c. PPI can only be included in the total Charge for Credit if, and only if, the PPI policy is a condition of obtaining funds

d. Northern Rock will most likely have received "secret" Commission from Pinnacle Insurers for selling an entire policy up front, resulting in an "unfair relationship" making the agreement unenforceable.

e. By virtue of the fact that a tick box and signature box is provided for consent to provide PPI on the Consumer Credit Agreement, it is taken that this policy is an optional component.

f. PPI cannot be included in the total charge for credit where an insurance policy is offered as an optional component.

g. The application of the PPI policy in this manner,

 Means Northern Rock not only financially gained excessively by including the PPI policy in the total charge for credit, but also secretly and unbeknown to me, they would receive a healthy commission as a result.

 Makes the prescribed terms incorrect, and therefore invalidates the agreement.

 Results in an "unfair relationship"

 Means the agreement was improperly executed,

 Makes the agreement unenforceable

 Means i am entitled to a reimbursement of any or all of the total PPI premium plus 8% interest.

36. I do not deny that an agreement has ever taken place between myself and the Claimant.

37. I do however deny ever entering into a fair or legitimate agreement with the Claimant.

38. I bring to the Claimants attention that examining the history of the agreement prior to commencement of Legal action will show consistent repayments up until the time I began to experience financial difficulty and approached them for help.

39. I am however appalled to discover the lengths that this Financial Organisation (who themselves experienced financial difficulties, and only continue now to exist as a result of people like myself) will go to in order to ensure financial gain at the detriment of the very customers who blindly keep them in business.

 

[Luxxinterior]

Hi Luxx,

 

Ammendments in red including commas so look carefully............

 

 

 

Hi Slick, hopee youre doing well.

 

Thanks for that

 

Does it look ok to you?

The last one looked more like a second defence as it was full of legalities lol. The nice Judge suggested making it a simple sequence of events

[slick132]

Yes Luxx,

 

It looks ok to me, and not full of too much legalese.

 

Let's hope the judge is in agreement.

[Luxxinterior]

Yes Luxx,

 

It looks ok to me, and not full of too much legalese.

 

Let's hope the judge is in agreement.

 

Fingers Crossed

Im away to make a start on my Defence ...thanks for your input Slick

[citizenB]

Looking good Lux.. just one teeny point.. where you have used the word judge.. use a capital "J"

[Luxxinterior]

Looking good Lux.. just one teeny point.. where you have used the word judge.. use a capital "J"

 

Thanks CitizenB,

How do you think the South Shields case should be referenced in my defence considering there do not appear to be any case notes available?

 

Is merely referencing news reports enough? Or is there a specific source that would be acceptable to a Court?

 

Regards

[Luxxinterior]

Hi,

Can I ask for some help please?

 

I am working on my defence for this, which I will post what I have so far, And I am just at the bit where I am saying that the Agreement is unenforceable under s.127 (1),(a),(i),(2).

What I do not understand is the "PREJUDICE" i suffered?

 

Can anyone explain that to me please?

 

Also, I want to get it on there that there existed an unfair relationship as a result of the PPI policy... Anyone know how I would approach that issue?#

 

Thanks in Advance,

Here is what I have so far.

 

IN THE xxxxxx COUNTY COURT

 

CLAIM NO.

xxxxxxx

 

 

Between

 

xxxxxxxxx

Claimant

and

 

xxxxxxxxxxxxxxxxx

Defendant

 

________________________________________________

Amended Defence

__________________________________________________

1. This Defence is made in addition to my Defence dated ????? 2009 in opposition to the Claimant’s claim dated 22nd April 2009 and by which the Claimant contends I have no real prospect of successfully defending the claim against me.

2. It is intended to demonstrate by way of this defence, that the defendant, who does not deny entering into a Loan Agreement with the Claimant, actually entered into an agreement with the Claimant, which from the moment of commencement was unenforceable due to

1. The method of selling Personal Protection Insurance to the defendant.

2. The method with which Personal Protection Insurance was applied to the account.

3. The consequences of the method used to apply Personal Protection Insurance to the account on the Prescribed Terms of the agreement.

4. The hidden financial gain of the Claimant as a result thereof leading to an Unfair Relationship in financial favour of the Claimant.

5. The Claimants inability to execute a Default Notice which is in compliance with the Consumer Credit Act on which this agreement was based (1974)

6. The Claimants inability to terminate the agreement correctly using the most accurate financial information at the time of termination.

3. This Defence will also reference the following in support of the Defendant.

1. The Consumer Credit Act 1974 s127(1)(i)

2. The Consumer Credit Act 1974 s.127(3)

3. The Consumer Credit Act 1974 s.32.

4. The Consumer Credit Act 1974 s.142 (1) (b)

5. The Consumer Credit Act 2006 s.19-22 (applicable amendment to the Consumer Credit Act 1974 for agreements made after the 6th April 2007)

6. The Consumer Credit (Total Charge for Credit) Regulations 1980

7. RESTITUTION (VOLUME 40(2) (REISSUE) PARAS 1301-1484)/6. TOTAL FAILURE OF CONSIDERATION/

8. RESTITUTION (VOLUME 40(2) (REISSUE) PARAS 1301-1484)/6. TOTAL FAILURE OF

CONSIDERATION/(4) VOID CONTRACTS/1407. Money paid under unenforceable contracts

9. The Competition Commissions Report "Market investigation into payment protection insurance" (The Income Earned by Distributors)

10. The Competition Commissions Report "Market investigation into payment protection insurance" (Conclusions on Profitability)

11. Wilson v Robertsons (London) Ltd [2005] EWHC 1425 (Ch)

12. London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)

 

 

The Credit Agreement

1. The Defendant entered into an agreement with the Claimant on or about the 5/06/07 for an amount of £4000.00, agreed by telephone with an Agent employed by the Defendant.

2. An additional Premium of £915.00 was added to the total amount of the agreement by way of Personal Protection Insurance (Loan Protect Gold).

3. The Defendant contends that she cannot recall a discussion existed in relation to purchasing PPI, and if it did, the Defendant contends that it was not sufficient to make an informed choice about accepting PPI.

4. The Claimant is put to strict proof that such a conversation occurred which provided sufficient information by the Claimants representative, and which confirms that this Product was willingly accepted by the Defendant.

· A) The Defendant researched the issues surrounding the OFT’s concerns over the lack of guidance and advice given in relation to PPI. The Defendant recalls that examples of a Northern Rock PLC Loan application form contemporary to the time that the Account was started in April 07 appear to imply that it was compulsory for PPI to be agreed to for credit to be considered, or that it was otherwise not made clear whether or not it was compulsory.

· B) There was no statement under what circumstances that payment on any claim would be made and what exclusions would apply and in which circumstances.

· C) The Defendant did not receive a policy certificate or schedule.

· D) No guidance was given as to whether other, better value insurance policies were available from other sources.

 

5. The APR agreed at the time was at a rate of 8.9% which should have been applied to the total loan amount only.

6. It has transpired that the agreed APR of 8.9%, was also applied to the PPI premium of £915.00 .

7. The Interest to be accrued from the PPI Premium was also added to the Total Charge For Credit.

8. The Courts attention is drawn to the outcome of London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)

 

"Accordingly, we dismiss this appeal on the sole ground that, although the amount paid to discharge the arrears was part of the credit, the amount paid by way of the insurance premium was part of the total charge for credit, not of the credit itself, and therefore the amount of credit was incorrectly stated in the credit agreement and the credit agreement is unenforceable."

9. The Claimant maintains and will continue to maintain that this PPI policy was an optional component which the Defendant agreed to by way of signing her consent on the Credit Agreement.

10. Again, the Claimant is put to strict proof that such is the case.

11. However, if this PPI policy is optional, why then has the Claimant included the PPI Premium in the Total Charge for Credit?

12. It is clearly stated in the Consumer Credit (Total Charge for Credit) Regulations 1980, s.4©(i), that the only instance by which a policy of insurance can be added to the total charge for credit is when the Policy is not an optional component. Should this be the case, then it is clear that the Claimant never intended there to be a choice as to whether PPI should be applied to the account, thus making their consent field in the Consumer Credit Agreement useless and misleading.

Total Charge for Credit

3 Total charge for credit

For the purposes of the Act, the total charge for the credit which may be provided under an actual or prospective agreement shall be the total of the amounts determined as at the date of the making of the agreement of such of the charges specified in regulation 4 below as apply in relation to the agreement but excluding the amount of the charges specified in regulation 5 below.

UK Parliament SIs 1980-1989/1980/51-100/Consumer Credit (Total Charge for Credit) Regulations 1980 (SI 1980/51)/Part II Total Charge for Credit/4 Items included in total charge for credit

 

4 Items included in total charge for credit

Except as provided in regulation 5 below, the amounts of the following charges are included in the total charge for credit in relation to an agreement:--

© a premium under a contract of insurance, payable under the transaction by the debtor or a relative of his, where the making or maintenance of the contract of insurance is required by the creditor--

(i) as a condition of making the agreement,

 

13. It is clearly stated in the Consumer Credit (Total Charge for Credit) Regulations 1980 s.5©(i) that where a Policy of insurance is an optional component, it cannot be added to the total charge for credit. Indeed, it is specifically mentioned as an exclusion, which the Claimant has blatantly chosen to ignore.

Total Charge for Credit

5 Items excluded from total charge for credit

(1) The amounts of the following items are not included in the total charge for credit in relation to an agreement:--

© any charge relating to an agreement which is an agreement to finance a transaction of a description referred to in

paragraph (a) or (b) of section 11(1) of the Act, being a charge which would be payable if the transaction were for cash;

(i) a premium under a contract of insurance other than a contract of insurance referred to in regulation 4©

above.

 

The Consequences of this are as follows.

16. As a result of including an item which should be excluded under the Consumer Credit (Total Charge for Credit) Regulations 1980, the Claimant has breached s.60(1)(b) and s.60(2)(a) of the Consumer Credit Act 1974. Specifically, the amount and rate of the total charge for credit are subsequently incorrect.

60.—(1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of—

(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),

17. As a result of including an item which should be excluded under the Consumer Credit (Total Charge for Credit) Regulations 1980, the Claimant has breached s.61(1)(a)(b) of the Consumer Credit Act 1974. Specifically, as a result of the total charge of credit being incorrect as stated in para 16 above, the agreement does not and never has contained the correct financial information, meaning the prescribed terms are incorrect.

61.—(1) A regulated agreement is not properly executed unless

(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under

section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor owner,and

(b) the document embodies all the terms of the agreement, other than implied terms,

 

18. As a result of contravening these two sections of the Consumer Credit Act 1974, the entire agreement is deemed unenforceable under s127.1(a)(i)(2)

 

127.—(1) In the case of an application for an enforcement order under—

(a) section 65(1) (improperly executed agreements),

(2) If it appears to the court just to do so, it may in an enforcement order reduce or discharge any sum payable by the debtor or hirer, or any surety, so as to compensate him for prejudice suffered as a result of the contravention in question

[Luxxinterior]

Ok...I could not wait for a response unfortunately I have to get this to the solicitors and the court on monday. I will have to email it to the solicitor to get it to them on time, and I can drop it into the court on my way to work.

 

Here is where I am up to now....I may be doing the PPI thing to death, but this is important and I do not want to leave any stone uncovered.

 

Can someone take a look please and let me know if you think I have missed anything?

 

Also, Do I really need to go into the DN thing in detail? I mean, it was probably correct at the time. We made the token payment after the DN was issued but before it arrived, so it is the Final/Termination Notice that is incorrect.

 

Here it is again... plus the continuation from above.

 

IN THE xxxxxxxxxx COURT

 

CLAIM NO.

xxxxxxxxxxxxxxxxx

 

 

Between

 

 

xxxxxxxxxxxxxxx

 

 

Claimant

 

 

and

 

 

 

xxxxxxxxxxxxxxxx

 

 

Defendant

 

 

 

________________________________________________

 

 

Amended Defence

 

 

__________________________________________________

 

1. This Defence is made in addition to my Defence dated ????? 2009 in opposition to the Claimant’s claim dated 22nd April 2009 and by which the Claimant contends I have no real prospect of successfully defending the claim against me.

2. It is intended to demonstrate by way of this defence, that the defendant, who does not deny entering into a Loan Agreement with the Claimant, actually entered into an agreement with the Claimant, which from the moment of commencement was unenforceable due to

1. The method of selling Personal Protection Insurance to the defendant.

2. The method with which Personal Protection Insurance was applied to the account.

3. The consequences of the method used to apply Personal Protection Insurance to the account on the Prescribed Terms of the agreement.

4. The hidden financial gain of the Claimant as a result thereof leading to an Unfair Relationship in financial favour of the Claimant.

5. The Claimants inability to execute a Default Notice which is in compliance with the Consumer Credit Act on which this agreement was based (1974)6. The Claimants inability to terminate the agreement correctly using the most accurate financial information at the time of termination.

 

3. This Defence will also reference the following in support of the Defendant.

1. The Consumer Credit Act 1974 s127(1)(i)

2. The Consumer Credit Act 1974 s.142 (1) (b)

3. The Consumer Credit Act 2006 s.19-22 (applicable amendment to the Consumer Credit Act 1974 for agreements made after the 6th April 2007)

4. The Consumer Credit (Total Charge for Credit) Regulations 1980

5. The Competition Commissions Report "Market investigation into payment protection insurance" (s.6.107)

6. The Competition Commissions Report "Market investigation into payment protection insurance" (Conclusions on Profitability)

7. London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)

 

 

 

The Credit Agreement

 

1. The Defendant entered into an agreement with the Claimant on or about the 5/06/07 for an amount of £4000.00, agreed by telephone with an Agent employed by the Defendant.2. An additional Premium of £915.00 was added to the total amount of the agreement by way of Personal Protection Insurance (Loan Protect Gold).3. The Defendant contends that she cannot recall a discussion existed in relation to purchasing PPI, and if it did, the Defendant contends that it was not sufficient to make an informed choice about accepting PPI.4. The Claimant is put to strict proof that such a conversation occurred which provided sufficient information by the Claimants representative, and which confirms that this Product was willingly accepted by the Defendant.

 

· A) The Defendant researched the issues surrounding the OFT’s concerns over the lack of guidance and advice given in relation to PPI. The Defendant recalls that examples of a Northern Rock PLC Loan application form contemporary to the time that the Account was started in April 07 appear to imply that it was compulsory for PPI to be agreed to for credit to be considered, or that it was otherwise not made clear whether or not it was compulsory.

· B) There was no statement under what circumstances that payment on any claim would be made and what exclusions would apply and in which circumstances.

· C) The Defendant did not receive a policy certificate or schedule.

· D) No guidance was given as to whether other, better value insurance policies were available from other sources.

· E) It was never disclosed that the Claimant would receive Commission for selling the Policy.

 

 

5. The APR agreed at the time was at a rate of 8.9% which should have been applied to the total loan amount only.

6. It has transpired that the agreed APR of 8.9%, was also applied to the PPI premium of £915.00 .

7. The Interest to be accrued from the PPI Premium was also added to the Total Charge For Credit.

8. The Courts attention is drawn to the outcome of

 

 

London North Securities Ltd v Tony James Meadows & Anor [2005] EWCA Civ 956 (27 July 2005)

 

"Accordingly, we dismiss this appeal on the sole ground that, although the amount paid to discharge the arrears was part of the credit, the amount paid by way of the insurance premium was part of the total charge for credit, not of the credit itself, and therefore the amount of credit was incorrectly stated in the credit agreement and the credit agreement is unenforceable."

 

9. The Claimant maintains and will continue to maintain that this PPI policy was an optional component which the Defendant agreed to by way of signing her consent on the Credit Agreement.

10. Again, the Claimant is put to strict proof that such is the case.

11. However, if this PPI policy is optional, why then has the Claimant included the PPI Premium in the Total Charge for Credit?

12. It is clearly stated in the Consumer Credit (Total Charge for Credit) Regulations 1980, s.4©(i), that the only instance by which a policy of insurance can be added to the total charge for credit is when the Policy is not an optional component. Should this be the case, then it is clear that the Claimant never intended there to be a choice as to whether PPI should be applied to the account, thus making their consent field in the Consumer Credit Agreement useless and misleading.

 

Total Charge for Credit

 

3 Total charge for creditFor the purposes of the Act, the total charge for the credit which may be provided under an actual or prospective agreement shall be the total of the amounts determined as at the date of the making of the agreement of such of the charges specified in regulation 4 below as apply in relation to the agreement but excluding the amount of the charges specified in regulation 5 below.

 

UK Parliament SIs 1980-1989/1980/51-100/Consumer Credit (Total Charge for Credit) Regulations 1980 (SI 1980/51)/Part II Total Charge for Credit/4 Items included in total charge for credit

 

 

 

4 Items included in total charge for credit

 

Except as provided in regulation 5 below, the amounts of the following charges are included in the total charge for credit in relation to an agreement:--© a premium under a contract of insurance, payable under the transaction by the debtor or a relative of his, where the making or maintenance of the contract of insurance is required by the creditor--

 

(i) as a condition of making the agreement,

 

13. It is clearly stated in the Consumer Credit (Total Charge for Credit) Regulations 1980 s.5©(i) that where a Policy of insurance is an optional component, it cannot be added to the total charge for credit. Indeed, it is specifically mentioned as an exclusion, which the Claimant has blatantly chosen to ignore.

 

Total Charge for Credit

 

5 Items excluded from total charge for credit(1) The amounts of the following items are not included in the total charge for credit in relation to an agreement:--

 

© any charge relating to an agreement which is an agreement to finance a transaction of a description referred to in

paragraph (a) or (b) of section 11(1) of the Act, being a charge which would be payable if the transaction were for cash;

(i) a premium under a contract of insurance other than a contract of insurance referred to in

regulation 4© above.

 

The Consequences of this are as follows.

14. As a result of including an item which should be excluded under the Consumer Credit (Total Charge for Credit) Regulations 1980, the Claimant has breached s.60(1)(b) and s.60(2)(a) of the Consumer Credit Act 1974. Specifically, the amount and rate of the total charge for credit are subsequently incorrect.

 

60.—(1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of—

(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),

 

15. As a result of including an item which should be excluded under the Consumer Credit (Total Charge for Credit) Regulations 1980, the Claimant has breached s.61(1)(a)(b) of the Consumer Credit Act 1974. Specifically, as a result of the total charge of credit being incorrect as stated in para 16 above, the agreement does not and never has contained the correct financial information, meaning the prescribed terms are incorrect.

 

61.—(1) A regulated agreement is not properly executed unless

 

(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor owner,and

(b) the document embodies all the terms of the agreement, other than implied terms,

 

16. As a result of contravening these two sections of the Consumer Credit Act 1974, the entire agreement is deemed unenforceable under s127.1(a)(i)(2)

 

127.—(1) In the case of an application for an enforcement order under—

(a) section 65(1) (improperly executed agreements),

(2) If it appears to the court just to do so, it may in an enforcement order reduce or discharge any sum payable by the debtor or hirer, or any surety, so as to compensate him for prejudice suffered as a result of the contravention in question

17. The Defendant has been severely Prejudiced by the non declaration of Commission which the Claimant will have received from their insurers for selling the PPI Policy.

18. The Defendant has been severely Prejudiced by the financial gain of the Claimant through applying Interest to the PPI Policy and including it in the total charge for credit.

19. The Court is requested to enforce its powers under section 127(1) of the Consumer Credit Act 1974 to render the agreement unenforceable, and to order the return of the entire amount of the PPI policy from which the Claimant has been enjoying profit and commission, and/or any premiums paid to date plus interest at 8% under s.69

20. By way of an example of how much profit the claimant may have been received as a result of selling the PPI Policy, I refer now to the inquiry held by the Competition Commission into the selling of Personal Protection Insurance. Ultimately its findings were to lead to the overall ban of selling PPI products, and in particular Single Premium Policies such as the agreement between the Claimant and the Defendant.

21. Section 6.107 of the Competition Commissions enquiry examines the commission rates and share of profit between lenders and their underwriters.

 

s.6.107. We examined the contracts between retail PPI distributors and their underwriters in order to collect data on commission rates and the share of profit. We found that commission rates ranged between [50–60] and [70–80] per cent and that profit share ranged between [60–70] and [90–100] per cent.44 Details of each contract that we looked at are set out in Table 6.10. This data is useful as it corroborates the data on typical distributor income levels shown above.

 

22. In a later statement (s6.134 - 136 – conclusions of profitability), it is evident that the Claimant and other lenders will have been significantly benefitting from these PPI policies unbeknown to their customers for a number of years.

 

6.134 On the basis of the above model, including the assumptions discussed in paragraphs 6.106 to 6.129, we concluded that retail PPI distribution is highly profitable. Commission levels are high in relation to the costs incurred in selling retail PPI and the capital requirements are low, reflecting the low-risk nature of the activity.

6.135 Although the RoE we found was extremely high compared with the cost of capital, it was lower than in Section 4 where we found RoEs of almost 500 per cent

. We considered this to be because distributors’ revenues are directly linked to the level of GWP per policy (through the fixed percentage commission rate) and these are lower for retail PPI than for other types of PPI. We found that the average income per customer per year was no more than £4153 for all retail PPI distributors, compared with £160 for a PLPPI policy; however, the costs per policy are not materially different.

 

6.136 We looked at commission rates over the last six years and found that there had been no material change. We had no evidence to suggest that costs had been materially higher in previous years, and we therefore concluded that these levels of profitability had persisted over at least the last five years.

 

23. This information has never been shared between the Claimant and the Defendant, and the Claimant is put to strict proof that they did not receive Commission payments as a result of selling this PPI Policy.

 

24. The Defendant contends that the PPI was sold with a view to meeting sales targets and providing bonuses and commission for the Claimant, rather than to help the Claimant attain a better financial position.

 

25. In the light of the contentions made above, the Defendant asks that the court also consider that an "unfair relationship" existed under the terms of section 140A of the Consumer Credit Act 1974.

 

Unfair relationships

 

140A Unfair relationships between creditors and debtors

 

(1) The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—

(a) any of the terms of the agreement or of any related agreement;

(b) the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;

© any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).

 

 

(2) In deciding whether to make a determination under this section the court shall have regard to all matters it thinks relevant (including matters relating to the creditor and matters relating to the debtor).

 

(3) For the purposes of this section the court shall (except to the extent that it is not appropriate to do so) treat anything done (or not done) by, or on behalf of, or in relation to, an associate or a former associate of the creditor as if done (or not done) by, or on behalf of, or in relation to, the creditor.

 

(4) A determination may be made under this section in relation to a relationship notwithstanding that the relationship may have ended.

 

(5) An order under section 140B shall not be made in connection with a credit agreement which is an exempt agreement by virtue of section 16(6C)."

 

20 Powers of court in relation to unfair relationships

 

"140B Powers of court in relation to unfair relationships

(1) An order under this section in connection with a credit agreement may do one or more of the following—

(a) require the creditor, or any associate or former associate of his, to repay (in whole or in part) any sum paid by the debtor or by a surety by virtue of the agreement or any related agreement (whether paid to the creditor, the associate or the former associate or to any other person);

(b) require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement;

© reduce or discharge any sum payable by the debtor or by a surety by virtue of the agreement or any related agreement;

(d) direct the return to a surety of any property provided by him for the purposes of a security;

(e) otherwise set aside (in whole or in part) any duty imposed on the debtor or on a surety by virtue of the agreement or any related agreement;

(f) alter the terms of the agreement or of any related agreement;

(g) direct accounts to be taken, or (in Scotland) an accounting to be made, between any persons.

 

(2) An order under this section may be made in connection with a credit agreement only—

(a) on an application made by the debtor or by a surety;

(b) at the instance of the debtor or a surety in any proceedings in any court to which the debtor and the creditor are parties, being proceedings to enforce the agreement or any related agreement; or

© at the instance of the debtor or a surety in any other proceedings in any court where the amount paid or payable under the agreement or any related agreement is relevant.

 

(3) An order under this section may be made notwithstanding that its effect is to place on the creditor, or any associate or former associate of his, a burden in respect of an advantage enjoyed by another person.

26. The Defendant maintains that an unfair relationship existed due to the non-disclosure of commission between the Claimant and the Underwriters of the policy.

 

27. The Defendant also maintains that an unfair relationship also existed as a result of profiteering on behalf of the Claimant by way of adding extra interest to a policy that should never be included in the total charge for credit.

 

28. The Defendant maintains that the Credit Agreement, due to the many questionable actions of the Claimant, has never been enforceable at any time.

 

29. Even though there was never a time that this agreement was enforceable, the Claimant has continued to register negative information with Credit Reference Agencies in an attempt to make it difficult for the Defendant to obtain credit.

 

30. It is the contention of the Defendant that in light of the fact that there was never a time when this agreement was enforceable, the Claimant should be ordered to remove any such information from any Credit Reference Agency it has decided to illegally share information with.

 

31. It is believed that the Defendant has now shown in a number of ways how the Consumer Credit Agreement entered into on or about the 5/06/07 is unenforceable under section 127 and section 140 of the Consumer Credit Act.

Edited October 9, 2009 by Luxxinterior

[Luxxinterior]

Anybody free to help or advise please?

 

Thanks

[slick132]

Hi Luxx,

 

Just to say I'm not ignoring you, but this is not my forte.

 

Re the DN, is it not invalid because it included penalty charges.

[Luxxinterior]

Hi Luxx,

 

Just to say I'm not ignoring you, but this is not my forte.

 

Re the DN, is it not invalid because it included penalty charges.

 

Hi Slick

It does contain charges alright, so yes it is Though the Judge did say based on the DN argument alone we would have lost lol.

 

In looking at it again ....the termination notice actually is correct too But I am not sure they know all this yet.

 

As they dont keep copies, they put together a DN and TN with the same amounts on them...I guess they didnt expect us to make a token payment