Welcome Finance PPI and Mr Z ** SUCCESSFUL OUTCOME **

[pokerking1]

mrz please bare with me i am new to this so I apoligise in advance if this has no bearing , just thinking out aloud

Welcome keep pushing hfs into the equation why?

Is it because you have named them broker on your poc? (you have no proof of this yet)

You do have a completed application from hfs in welcomes hands, how did they obtain this form?

Could you have inadvertently signed something on the hfs form giving them the right to pass your details on to a third party if you where declined by them, and this was hfs total involvment , it could be industry norm quid pro quo and hfs received nothing

[MrZ]

mrz please bare with me i am new to this so I apoligise in advance if this has no bearing , just thinking out aloud

Welcome keep pushing hfs into the equation why?

Is it because you have named them broker on your poc? (you have no proof of this yet)

You do have a completed application from hfs in welcomes hands, how did they obtain this form?

Could you have inadvertently signed something on the hfs form giving them the right to pass your details on to a third party if you where declined by them, and this was hfs total involvment , it could be industry norm quid pro quo and hfs received nothing

 

I thought of this as well, no where on the HFS application is there any information about data sharing. There is a clause that authorises my mortgage lender to verify my mortgage status, but nothing about any other third party.

 

I also have other internal documents from Welcome in the form of a checklist which names HFS as broker.

 

My point exactly...they have an application from HFS and were passed other details. Nowhere on that form did I consent them to "shop around". I have copies of information about HFS when they were in business. Nowhere does it state they were a broker. The customer is lead to believe the money loan comes from HFS. In fact HFS denied me the loan. It was days later when Welcome phoned. Back then these sorts of calls were common. I had no reason to connect the two. At no point was the name Welcome ever mentioned by HFS.

 

EDIT:

Having never had the occassion to go through a broker for a loan, would there be any required paperwork the broker should have made? Would I have been required to authorise a company as a broker e.g. sign my consent to act or similar?

[steven4064]

I recall reading somewhere that until a track is assigned, that all CPR's apply to a claim. In other words certain rules that wouldnt apply to small claims track do apply until such time that a track is allocated? Is this true? If so does this benefit me at all?

 

I have my basic witness statement and draft order for the underwriting sheet ready, but am awaiting a better consensus on exactly what type of request I should be making.

People have mused here for a long time as top whether all CPRs apply before the track is allocated but it is not clear because in many cases you know what track the claim will be allocated to before the AQ goes in. My belief is that courts would (certainly could) take that into account.

 

As to what you should do - IMHO you have two choice which I spelt out earlier. The one thing you must not do is to go to a case hearing without the underwriting sheet (at least for the commissions part of the claim) as no evidence = no case.

[MrZ]

People have mused here for a long time as top whether all CPRs apply before the track is allocated but it is not clear because in many cases you know what track the claim will be allocated to before the AQ goes in. My belief is that courts would (certainly could) take that into account.

 

As to what you should do - IMHO you have two choice which I spelt out earlier. The one thing you must not do is to go to a case hearing without the underwriting sheet (at least for the commissions part of the claim) as no evidence = no case.

 

One option you mentioned was making my application at the time of the AQ. Would this require an additional fee to the AQ fee? I am trying to weigh the pros and cons of making an application now versus at the AQ stage.

[steven4064]

At the time of the AQ you can suggest orders for directions at no extra cost - it is included in the AQ fee. I don't know what happens of the court decide a hearing is needed before making such an order - I think that would also be included - someone else may know the answer

[MrZ]

At the time of the AQ you can suggest orders for directions at no extra cost - it is included in the AQ fee. I don't know what happens of the court decide a hearing is needed before making such an order - I think that would also be included - someone else may know the answer

 

So am I understanding correctly, that your opinion is I should submit the 31.16 now and in the event that application fails, then I could try again under 31.12 or another CPR at the time of the AQ (which would likely be included as part of the AQ fee)?

[steven4064]

I think you have to choose - I have laid out various options as I see them with the risks of each. The 'perfect' answer would be to have filed a CPR 31.16 before filing the main claim - obviously that is no longer an option. The risk you are trying to avoid is ending up with a hearing for the claim on secret commissions (the "main claim") without having the underwriting sheet ("US"). The options I have outlined are:

 

1. file a CPR 31.16 now. The risk is that a hearing on this may come too late for the main hearing. You may be able to ask for a stay on the main hearing pending the outcome of this application. A stay may or may not be allowed - it would certainly be opposed by WFS.

 

2. put in a draft order for directions with the AQ for the US to be supplied. The risk is that the court may not issue the order - they often don't. You would have to make a really strong case, which would inevitably be weakened by the fact that you filed the main claim without the information you would then be requesting (and saying is vitally important)

 

3. in the AQ, ask for fast track so you can use standard disclosure/CPR18. Obviously WFS are not going to disclose that they have the US so you would almost certainly have to fall back on CPR 18 with the same risk as in item 2. The further risk is that you would expose yourself to costs. The upside of that is that WFS would be exposed to costs too and the court might grant your CPR 18 request. That possibility might frighten them into settling before going to court.

[MrZ]

I think you have to choose - I have laid out various options as I see them with the risks of each. The 'perfect' answer would be to have filed a CPR 31.16 before filing the main claim - obviously that is no longer an option. The risk you are trying to avoid is ending up with a hearing for the claim on secret commissions (the "main claim") without having the underwriting sheet ("US"). The options I have outlined are:

 

The US is certainly key to the commissions aspect of the claim. However my approach would not make it the main part. It was actually the last resort. My main claim as I intend to argue it, will be the mis sale of PPI (upheld by Welcome), the misrepresentations of the PPI and the MIF, the unfairness of the terms of the PPI, MIF, and [un negotiated] penalty charges. The nature and application of the MIF creating an unfair relationship, etc etc. The MIF and PPI earning commissions was placed in the claim as a last resort, when I naively expected Welcome to disclose the document. I had always accepted that I may have to amend the POC if the disclosure didn't reveal the commissions. In all honesty I have never seen an underwriting sheet on this forum or elsewhere, despite the popular opinion among many (including myself) that commissions are almost certainly paid and should be evidenced by the US. So as far as I know the supposed commission may be in the same group as an urban legend . So on the sole basis that the US might show that no commissions were paid, I was prepared to risk the need to amend the POC as it was never what I felt was detrimental to my main claim.

 

1. file a CPR 31.16 now. The risk is that a hearing on this may come too late for the main hearing. You may be able to ask for a stay on the main hearing pending the outcome of this application. A stay may or may not be allowed - it would certainly be opposed by WFS.

 

I am happy to make an application now. I am also happy to ask for the stay. The question that remains is whether to make the application under 31.16 or 31.12. If I make it under 31.16 it seems I run the risk of it being rejected as this part applies to order prior to making a claim. I would argue that I made requests prior to issuance (1st -under the DPA 1998 as part of my SAR, 2nd -two letters to Welcome, and 3rd, -a request to their solicitors), and delayed to the last minute the filing of the POC in good faith belief that the document would be disclosed. As a LiP I took the letter from Welcomes solicitors- that they intended to respond, as their willingness to co-operate.

Saying that however, there is a question as to whether CPR 31.12 can be used at this stage which would negate the risk of the application being argued on the grounds that the claim has already been filed. Do we have an answer or consensus on this, or is this a question I need to ask the court?

 

2. put in a draft order for directions with the AQ for the US to be supplied. The risk is that the court may not issue the order - they often don't. You would have to make a really strong case, which would inevitably be weakened by the fact that you filed the main claim without the information you would then be requesting (and saying is vitally important)

 

My argument at this stage would be the same as above. But by this stage I would have made the argument anyway as I will be filing an application whether its 31.16 or otherwise

 

3. in the AQ, ask for fast track so you can use standard disclosure/CPR18. Obviously WFS are not going to disclose that they have the US so you would almost certainly have to fall back on CPR 18 with the same risk as in item 2. The further risk is that you would expose yourself to costs. The upside of that is that WFS would be exposed to costs too and the court might grant your CPR 18 request. That possibility might frighten them into settling before going to court.

 

I was already prepared for this to be in FT based on the amount of the claim alone. My biggest fear in all of this was if Welcome had a strong defence to my "main claim" to the point I risked losing despite Welcome's letters upholding my claims and, by acceptance, the grounds on which my claims were based (misrepresentations and unfairness). This is another reason I was surprised by Welcomes lack of a defence and them simply saying it was someone else and not them. When they asked me to prove they accepted the mis sale and unfairness, I thought it was a joke! Thats the best they could come up with as a defence? Did they forget they sent me the [multiple] letters?

I assume I will have to amend the claim and POC one way or the other because of the way I have named the defendant. My hope was to wait until I had disclosure of the US, and whether that US showed a commission or not. And if I couldn't get the US or if it didn't reveal any commission, then to amend the claim and POC at the same time remove the claim related to commissions. At that time is should be known whether or not I need to name HFS as well.

[steven4064]

I have no experience of 31.12 and am not sure at what point it can be used. However, taken with 31.11, perhaps you could argue (and ask for directions accordingly) that you became aware of the existence of the underwriting sheet after you filed the claim and ask for an order under 31.12 on that basis.

 

As to WFS's defence, I come back to what I said before - we need to fully understand HFS's involvement, if any.

 

From what I remember of your thread, the sequence of events was that you applied for a loan from HFS but were declined. Subsequently, you got a loan from WFS directly. What is not clear to me is how that came about and whether HFS had any part in it.

[MrZ]

I have no experience of 31.12 and am not sure at what point it can be used. However, taken with 31.11, perhaps you could argue (and ask for directions accordingly) that you became aware of the existence of the underwriting sheet after you filed the claim and ask for an order under 31.12 on that basis.

 

As to WFS's defence, I come back to what I said before - we need to fully understand HFS's involvement, if any.

 

From what I remember of your thread, the sequence of events was that you applied for a loan from HFS but were declined. Subsequently, you got a loan from WFS directly. What is not clear to me is how that came about and whether HFS had any part in it.

 

I understand what you are saying.

 

Here is what I know to be true regarding HFS. I will follow with my potential argument.

 

1. I contacted HFS after a text message offering credit. I responded to the text and HFS rang me back.

2. HFS stated that I was provisionally approved for a loan and required my details and signature.

3. I gave details over the phone.

4. HFS sent the application which I completed. The application showed a loan of 36,000 at a rate of 9.5% over 120 months. I signed the form which also authorised my mortgage lender to release details. I sent the form back to HFS with photocopies of passport and payslips.

5. Days later (2 believe) HFS phoned and said sorry but the loan was not approved. That was the end of any contact between myself and HFS.

6. Some time later (a week and a half to be exact as I was planning my trip abroad) Welcome phone with an offer of credit. This was typical as offers came by post, text, phone and email all the time.

7. After signing the forms showing a loan of 15,000 19.98% over 180 months, and with the PPI et al a total of £20,103.82, less than a week later, I the receive in the post the cheques to my creditors, and one to myself. Two days later I was on a plane out of the country.

8. Years later I discover CAG and send off a SAR. In that request is the application I filled in with HFS. There is also a checklist that names HFS as broker. There is also a handwritten note that says "HFS have payslips etc."

 

From the above I still didn't understand the importance of HFS in the process. It was only after seeing other threads and putting pieces together that I made a connection of the MIF with a commission to the broker. I know it has been argued that the MIF is just an extra fee because of the risk eg a Higher Lending Fee. Welcome themselves state [in the Griffiths case] that they do not purchase an insurance policy in respect to the MIF. The industry standard was that a MIF/MIG (which are the same) was used to purchase an insurance policy for the lender. To say that Welcome would take the risk of not pursuing against a shortfall for a relatively small monthly payment over the term of the loan, with borrowers who are high risk is nonsensical. To say that Welcome use the fee, in part or whole, to fund a commission to a broker (who has done all of the hard work of marketing the borrower, confirming the borrower, selling the borrower, etc), and incidentally didn't receive a fee from the borrower, for all this hard work is not only possible, but highly probable.

 

This is how I see the MIF anyway. I haven't any proof of this however and hopefully the disclosure will settle it once and for all...even if it means proving me wrong.

 

 

Here is my potential argument. Its not related directly to the MIF but rather Welcomes claim that it was HFS and not them.

 

When I read section 56 of the Consumer Credit Act 1974, I interpret it to say that because of antecedent negotiations (which would be the discussions of PPI and MIF with HFS that Welcome allege), that HFS become the agent of Welcome and it follows in statute and case law as agent they are jointly liable?

 

Have I got right or have I mis read it. Specifically section 15 1©.

Edited July 24, 2011 by MrZ

[MrZ]

In one of the many responses from Welcome they say

 

We note your comments about allegedly undisclosed commission payments, which you purport, were made during the course of applying for finance. We further note what we assume is a reliance on Wilson and another v Hurtsanger Limited...

...Only relationships between brokers and lenders which are properly characterised as fiduciary agencies are affected in Hurtsanger...

...in cases where the broker is acting as an agent of the lender a fiduciary relationship will not arise, and as a consequence Hurtsanger will not be applicable

 

If they are saying the broker was acting as their agent, doesn't that negate their argument that they are not liable as the agent/broker and the lender are jointly liable?

 

NB. They never denied that a commission was paid. They instead argue the matter of agency and fiduciary duty.

[MrZ]

Here is he witness statement I have so far. This is edited from the sample provided by steven in an earlier post. Can anyone comment? I want to be sure I am not saying anything I shouldn't and that the statement is clear, etc.

 

1. I, MrZ, a Litigant in Person, of XXXXXX, took out a loan with Progressive Financial Services trading as Welcome Financial Services, and also known as Welcome Finance Services Ltd of Mere Way, Rudgate Fields Business Park, Ruddington, Nottingham, NG11 6NZ with agreement number XXXXX (“the Agreement”) and signed on XXXXX.

2. The loan consisted of a cash advance of £15,000.00 plus £3218.82 for three insurance policies I was persuaded to take out at the same time, and £1,650.00 being a so called Mortgage Indemnity Fee, which was purported to be for the purchase of an insurance policy taken by the Defendant.

3. The three insurance policies (MEDICARE, LIFECARE and Payment Protection Insurance) were all administered by Direct Group Limited of Direct House, White Rose Way, Doncaster, DN4 5NU, and underwritten by Norwich Union Insurance Limited (now Aviva) whose registered office is at St. Helens - 1 Undershaft, London, EC3P 3DQ. The Defendant effectively acted as agent for the provision of these policies.

4. The Defendant avers the Agreement was brokered by HFS Loans who acted as my agent.

5. It is well established that lenders and finance companies such as the Defendant paid commissions to intermediaries, brokers, and agents involved in the sale of financial products.

6. The loan Agreement, which was an Agreement regulated by the Consumer Credit Act 1974, shows the principal associated with the amount of credit and of the three insurance policies separately, the total charge for credit (consisting of an Acceptance Fee and Mortgage Indemnity Fee), the repayment terms, and the APR. It does not show any commissions relating to the sale of the Agreement, the insurance policies, or purported policies, nor does it show the amount of interest added as a result of the sale of the policies.

7. Given the chain of companies involved in this sale and brokering of the Agreement and additional insurance policies, it is inconceivable that no commission was paid or received as a result of the sale or brokering of the sale of the Defendant’s financial product(s) and/or additional insurance policies.

8. I therefore contend that the principals of the loans for the insurance policies and the Mortgage Indemnity Fee contain hidden commissions contrary to the Common Law (Wilson & Another –v- Hurstanger Ltd, [2007] EWCA Civ 299 and Imageview Management Ltd –v- Kelvin Jack, [2009] ECA Civ 63) and which render the agreement void.

9. Further, since any commission should form part of the total cost of credit rather than the principal, the loan amount (principal), total cost of credit and APR, which are all terms prescribed in Schedule 1 of the Consumer Credit (Agreements) Regulations 1983, are all therefore incorrect.

10. Additionally, since the cost for the insurance policy relating to the Mortgage Indemnity Fee should form part of the total amount of credit (principal) rather than the total cost of credit, the loan amount (principal), total cost of credit and APR, which are all terms prescribed in Schedule 1 of the Consumer Credit (Agreements) Regulations 1983, are all therefore incorrect.

11. There is good reason to believe that the Defendant has acted unlawfully with respect to the Agreement and/or the sale or brokering of the Agreement.

12. On multiple occasions, and prior to issuance of any claim, I asked the Defendant to provide me with information regarding commissions paid or received, and for policy information relating to the insurances, but none have been provided.

13. Acting in good faith and belief of the Defendants intention to provide me with the requested information, I delayed issuing Particulars of Claim until the last day permitted by Practice Direction.

14. Not until the time prescribed by Practice Direction for the service of my Particulars of Claim had passed, and after service of the Particulars of Claim, did I receive notice from the Defendant confirming to me that the Defendant would not be complying with my request.

15. I ask the court to note that in correspondence to my requests for information regarding the payment of commissions that the Defendant has not denied that commissions were paid in respect of the sale the Agreement, but rather argued the matter of agency in respect to the payment of commissions.

16. I therefore respectfully request the court to grant an order pursuant to CPR Part 31.16 requiring the Defendant to provide a copy of the underwriting sheet or other such document(s) that detail any commission paid and/or received in relation to sale or brokering of the Agreement and additional insurance policies.

17. I respectfully request the court to grant an order pursuant to CPR Part 31.16 and requiring the Defendant to provide a copy of the purported insurance policy documents in respect to the charge of the Mortgage Indemnity Fee or other such document(s) that detail the purpose and use of the Mortgage Indemnity Fee and any commissions paid and/or received in relation to the Mortgage Indemnity Fee.

18. Should the court not be inclined to grant my application pursuant to CPR 31.16, I respectfully request the court also consider CPR 31.11 and CPR 31.12 and that the disclosure of the requested documents at this stage of the proceedings of my claim will serve the overriding objective and may prevent further unnecessary costs to both parties.

19. In light of the Defendants failure to comply with my request prior to issuance of proceedings, I respectfully ask the court to stay the claim until such time the matters of disclosure as set out in this application be resolved, and I am able to determine the merit of proceeding with my claim.

 

I believe that the contents of this Witness Statement are true.

[MrZ]

Bumping...hoping someone can comment before I file this tomorrow. Also can I ask to amend the defendant's name on the same application?

 

Is there a rule that says you can only ask for one thing on an application? I'd like to be able to get the name changed now if possible.

 

Can I name the defendant as "Progressive Financial Services Limited trading as Welcome Financial Services and Welcome Finance"? There are 3 different ways they are shown in my documents, in addition to Cattles plc being shown on some of the insurance documents.

Edited July 24, 2011 by MrZ

[steven4064]

I don't know definitely but I cannot see any reason why you cannot ask for more than one thing on an application particularly as the change of defendant's name will be seen by the court as fairly trivial

[MrZ]

I don't know definitely but I cannot see any reason why you cannot ask for more than one thing on an application particularly as the change of defendant's name will be seen by the court as fairly trivial

 

Ok. So assuming my edits to the witness statement are ok, I will go ahead and finalise my application and ask for permission to change the name. I suppose it cant hurt to ask and the worst that can happen is the court doesnt allow it on the same application.

[MrZ]

The court would prefer there to be only one application. The courts time should not be wasted and making multiple applications (which you have to do if you do not do this all together) will be frowned upon. Arguably this might be dealt with at a combined directions/allocation hearing.

 

Thanks for this. I will be taking the application to to court after lunch. Given the importance of the document requested I think I need to ask for disclosure now rather than wait. I will ask to be allowed to amend the name at the same time.

[MrZ]

I just rang the court to verify the fee before I left to file the application. I was told the AQ paperwork has been issued today and should arrive in the post in 3-5 days. Just wondering if I should wait now to file the application or go ahead and do it now...

 

The clerk couldnt advise he just said it was my choice. He did however confirm what dbabylon said, an application can ask for multiple orders/items and is preferred.

[MrZ]

After considering all the advice and comments (thanks to all), I decided to go ahead and make my application. I didnt want to have things progress without having at least made an "official" request for the information. It may well be that I could have waited until the AQ was submitted. However the fee for the application was only £45.00 so I felt is was worth a try.

 

I also found out that the AQ is due to be filed no later than 11 August. Hopefully my application will have been heard or decided by then, and I may have more information to hand before time to file the AQ.

 

Nothing ventured nothing gained...I suppose the worst that could happen is the application is denied. Time will tell.

 

Thanks again to all those who advised on this.

Edited July 25, 2011 by MrZ

[MrZ]

Now that the issue of the disclosure application is behind me I have another question. I have started draft my responses for the AQ. On the AQ there is a question to name the witnesses to be called.

 

Now I have the name of a Welcome employee who packaged the loan. I may want to get a witness statement from other Welcome employees such as person who would have been involved in the sale or brokering, or would have been involved with conversation/correspondence with HFS during the arrangement of the loan. I may also wish to get a witness statement from branch employees in relation to their collection practises and conversations with me.

 

Can I ask Welcomes solicitor for this information. Obviously If I can obtain the information I can then determine if it is helpful or necessary to get a witness statement. Do I have to ask for this as part of the AQ? It seems to me I should by the time I submit the AQ I should already know which witness I tend to rely on. Is it pointless asking their solicitor to provide me with the information by letter?

[steven4064]

It is not normal to get witness statements from bank employees in these circumstances - they probably won't and I don't think you can compel them in the civil courts

[pokerking1]

first I`d check my sar telephone transcripts if any,for any hard copy evidence and try to marry them up with the forms before asking welcome employees for statements for the simple reason welcome have always been econimical with the truth. Further he will be well coached if he is still employed by them, and if not their brief will tear him apart as a disgruntled ex emloyee

[steven4064]

and he won't come anyway

[MrZ]

No point in even trying to get any further witness details from them then.

 

The SAR doesnt revel anything prior to the complettion and signing of the agreement. All transcripts are to do with collection. I can use the transcripts as they stand regarding the unfair practices and unfair relationship claim.

 

Now with regard to their defense. I understand that when it comes to claims of misrepresentation, that the burden is on Welcome to prove that the no misrepresntation did not occur. Their defense merely make a statement that the liabilty, if any, would reside with the broker. Is this a valid defense in respect to my claim? Could I not apply to have it struck out? I suppose if I had the defense struck out, that would give them the oppertunity to file a new (and perhaps more solid) defense. Should I just leave the issue of their defense alone, as it seems to me to be very weak and in that respect serves to help me?

[MrZ]

Hopefully it wont get as far as a heraing but I want to be prepared either way. So it looks like the only witness will be myself.

 

Aside from the issue of costs, can anyone think of any reason why it would benefit me to keep the claim in SCT? As I understand it, out of SCT I have full use of CPR and the idea of the costs may tend to help encourage settlement from them.

 

I have a feeling from reading the defence that Welcome have not provide full details to their solicitors. I say this because if they had provided full details, it would be silly for the solicitors to ask for proof of Welcome accepting the mis sale and the unfair charges. Especially given the number of letters and multiple occassions of Welcome upholding my complaints.

 

It may well be that once I have provided copies of my documents and Witness Statement that they see the strength of my case and will want to avoid the costs they would be exposed to. I also intend to ask for a full day hearing in the Fast Track....that is unless information or advice between now and then suggests I shouldnt.

[steven4064]

At the AQ stage you can respond to their defence - in fact this is the only opportunity to do it apart from a hearing