FAO anyone with a Firstplus secured loan.

[Halifax71]

This post is relevant to all customers who have a secured loan with Barclays Firstplus. I know secured loans are a dirty word but a lot of people have them rightly or wrongly.

 

Last month, a customer of Firstplus has had a judge rule that the interest rate variation clause within their agreement was unfair, citing 5(1) of the Unfair Terms in Consumer Contract Regulations. Specifically this states

 

Unfair Terms

 

 

 

5. (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

The judge ruled that the contract could continue but the right the vary the interest rate was removed, reverting the loan to a fixed rate as at inception. As it stands Barclays have not appealed the decision, and as this decision has been made in a lower court it is not precedent setting. Is it cynical to opine this is why no appeal has been forthcoming?????

 

A group of us have been battling the regulators for years arguing this very point, i.e. that the right to vary has been misused and is fundamentally unfair.

 

The OFT presumably found fault back in 2010 as they issued a CCA section 33a reprimand, however legally they have no retrospective impact, and amazingly the OFT wont tell customers what exactly the reprimand was for, and I quote, "because it would harm the commercial interests of Barclays if they did". Long story, not going there with that one.

 

What customers need to do now is ask Firstplus and the regulators what they intend to do about this legal ruling. The clause has now been ruled unfair. There are over 50,000 customers with the exact same clause. ALL are paying more than they were at inception.

 

An example of the potential financial impact. My APR started at 8.4%, it is now 9.2%. A retrospective realignment to a fixed rate of 8.4% would reduce my liability by £8,000.

 

I have drafted a note below if anyone needs to cut and paste, but whether you use this, or draft your own, it is in your own interest to challenge the ongoing profiteering.

 

The FOS, the OFT and the FCA have all received a copy of the court judgement, however as it stands none will commit to doing anything about it.

 

Something like this should do.

 

Please send to:

Firstplus - [email protected]

THE FINANCIAL OMBUDSMAN SERVICE, [email protected]

THE OFFICE OF FAIR TRADING, [email protected]

THE FINANCIAL CONDUCT AUTHORITY. [email protected]

 

--------------------------

THIS NOTE IS SENT TO FIRSTPLUS, THE FINANCIAL OMBUDSMAN SERVICE, THE OFFICE OF FAIR TRADING, & THE FINANCIAL CONDUCT AUTHORITY

 

I am writing as a dissatisfied First Plus customer. For some years now, many customers have been complaining that the interest rate variation clause(s) in First Plus secured loan agreements is unfair. The result being that all customers, including myself, are being forced to repay significantly more than could reasonably be expected when the use of their widely drawn interest rate clause is applied in an imbalanced and unfair manner.

 

Last month, a fellow First Plus customer had a court rule that their interest rate variation clause is unfair under 5(1) of the Unfair Terms in Consumer Contract Regulations. The variation clause in question is the same clause as the one in the majority of First Plus customers agreements - namely clause 7. The key wording that is significant is as follows:

 

"We may from time to time vary our interest rate. We may increase or decrease our interest rate to reflect a change which has occurred, or which we reasonably expect to occur in interest rates generally or to ensure that our business is carried on prudently, efficiently and competitively"

 

[DELETE THIS NEXT BIT IF NOT RELEVANT TO YOU

There is a variation of this clause that includes a reference to FHBR:

 

"The interest rate on your account will not in any twelve month period, vary by more than twice the variation in the Finance House Base Rate published by the Finance and Leasing Association during the same period. If for any reason, the Finance and Leasing Association ceases to publish the Finance House Base Rate we may refer the variation in our interest rates to any other Base Rate which in our reasonable opinion best matches that rate." ]

 

The key elements of the clause are detailed as above and the declaration that the wording is unfair should apply to all customers, including me.

 

I understand a copy of the court judgement has already been sent to you. As you will have seen the judge has ruled that the contract can continue. The understanding is that the declaration of the clause being unfair would strike the clause from the contract thus disabling the ability of the lender to vary the rate with the loan reverting to the incepted APR and the loan being restructured and reset accordingly.

 

Can Firstplus please advise whether or not it is your intention to retrospectively revert my loan to the inception rate APR and apply it as a fixed rate going forward?

 

Can the OFT, FCA and FOS please advise me what action it intends to take against Firstplus, as I continue to suffer financially from the penal nature of the application by First Plus of their interest variation clause, which I now note to be legally unfair.

 

I would respectfully ask that you provide a response to myself within 10 working days.

 

Regards

[Halifax71]

The case info is private to protect the individual. It should be sufficient to just refer to it as it has been sent to all. The FCA have even replied, but just said they don't take on individual issues but they have referred to the relevant team for their information.

 

If they deny seeing it customers can refer them to the copy sent on the 20th Nov at 11:12 am titled "FIRST PLUS - NOTICE FROM THE FIRST PLUS COMPLAINTS GROUP" EDIT - see below.

 

You're right with regards to other lenders as no doubt they have similar ambiguous variation terms. This is just the tip of the iceberg.

 

At this point in time we're just trying to get as many customers to register complaints in an attempt to highlight customer dissatisfaction. That said they know it effects 50,000+ customers who all have the same clause.

 

------

 

Edit - this is the FCA reply including their reference number. Looks like it was drafted by the office junior (not be unable to??????).

 

We're still waiting for the OFT one (the OFT still have responsibility until April)

 

Our Ref: PC42415.ISS10907110

 

Dear *******Thank you for your email received on 20 November 2013.

 

I understand that you are writing to the Financial Conduct Authority (FCA) regarding the complaints you have against the firm Firstplus. I note that this is also on behalf of a consumer group, Firstplus Complaints, that you are a member of.

 

As the regulator of financial firms in the UK, we always welcome information forwarded to us from consumers that can help us in achieving our objectives, one of which is "to secure an appropriate degree of protection for consumers ". Therefore, I have passed on the information you have provided to the relevant supervision team of the firm for their consideration. Please be advised that we will not be unable to provide you with feedback regarding the information you have given as we are restricted to confidentiality by the Financial Services and Markets Act (FSMA).

 

Please note that although we can investigate this information from a regulatory perspective, the role of investigating individual complaints against the firms we regulate falls to the Financial Ombudsman Service (FOS). If Firstplus have already investigated this complaint and you remain unsatisfied with their final response, you can then contact the FOS for their consideration. I have included the contact details for the FOS below.www.financial-ombudsman.org.uk/You may also be aware that if you are not satisfied with the FOS's decision, you have the further option of taking independent legal advice on pursuing your complaint through the courts. If you would like to find out more information about the FCA, I attach a link to our website below:www.fca.org.uk

 

I thank you once again for bringing this to our attention.

 

Yours sincerely************ (Ms)

Customer Contact Centre

Financial Conduct Authority

Consumer Helpline: 0800 111 6768

www.fca.org.uk/consumers

Edited November 28, 2013 by Halifax71

[Halifax71]

Not mine to give, and understandably the person concerned insists on anonymity.

 

I've posted the FCA's reply, with their reference number.

 

I would hope that that would be sufficient. It's all that can be made public anyhow.

 

Re the repossession, maybe a comparison of their variation clause with the Firstplus one, if similarly ambiguous then surely a stay would be granted pending the regulatory process. If not then ensuring the judge who is hearing the case rules that the other lenders clause is fair before the bank can enforce their rights under contract - as per ECJ Pannon.

[Halifax71]

RE the email sent to me from the site team - I can't reply, it says I don't have the necessary permissions

 

Anyhow, I'll ask the question you've asked.

[Halifax71]

FOS acknowledgements are stating 6 weeks for a response. That's fair enough I suppose.

 

Then again, the FOS are pretty much useless in this regard unless the OFT / FCA actually do something.

[Halifax71]

RDM, keep trying to get repo cases to use Pannon. Even before this ruling against BFP, I couldn't see how any judge would rule the term fair. And from conversations with others with other lenders, the majority of secured loans have similarly ambiguous variation terms which have resulted in all base rate increases being applied whilst they've treated base rate decreases as a brucie bonus to pay for their PPI liability.

 

I honestly believe this interest rate issue on secured loans is the next big one to hit the banks.

[Halifax71]

Just received a call from the FCA - they confirm that until April 14 they have no responsibility for secured loans so we need to liaise direct with the OFT.

 

Thumbs up for the FCA for at least letting me know - well I knew that anyway but at least some communication.

 

Still nothing from the OFT.

 

As I said above the FOS said it'll be 6 weeks before they respond.

 

I would expect everyone else to get a similar response.

[Halifax71]

Oh and now a reply from Firstplus - they won't deal with it by email. So, called them, asked them to reduce my rate as clause 7 has been found to be legally unfair, they are now sending a written reply.

[Halifax71]

Hi Andrew, agree about the OFT, in my opinion they have shown clear bias towards Firstplus over the past few years. I'd even go as far as being complicit in covering up Firstplus activities. Their stance on withholding the reasons for the 2010 reprimand is nothing short of appalling. Hopefully i'll have information on that in the coming weeks / months.

 

As for this, it is my understanding that only a court can find a contract term unfair. That said, I would expect the regulator to take this on following the court ruling, not only on behalf of the 50,000+ Firstplus customers who have EXACTLY the same clause, which has been used in EXACTLY the same manner, but on behalf of other secured loan customers who have similar unfair terms. They can take the issue to court.

 

One of the main stumbling blocks I think will be cost. Can the banks afford this? A conservative estimate would be a £500m cost to Firstplus. Not up front, but a mixture of refund / reduction in loan book value. It could be more like £1billion. That is just Firstplus.

 

I think we need to give it a few weeks and see what the OFT / FCA come back with. Only then will we know whether the regulators are actually prepared to do their job.

[Halifax71]

The 2010 reprimand decision do you mean?

 

If so, no. I had the ICO decide on that at the same time as pursuing under section 241a of the Enterprise Act. I'll post the FoIA rejection reasons below in a minute.

 

-------------

 

As you are aware, I have now received the OFT’s response to my query as to whether all of the information you requested is covered by section 238 of the Enterprise Act 2002 or whether some of the information is covered solely by section 31 of the Freedom of Information Act 2000.

 

That response, which is from the OFT’s General Counsel, clarifies the point by informing me that some of the withheld information consists entirely of “specified information” and the remainder, while covered by section 31 of FOIA, also contains, discusses and refers to “specified information”. Therefore, the information covered by sections 31 and 44 of FOIA is very closely interwoven.

 

As you will be aware, specified information is defined in section 238(1) of the Enterprise Act 2002 as information which comes to a public authority in connection with its exercise of certain functions. The OFT has stated, in earlier correspondence, that the withheld information came to it in connection with its functions under the Consumer Credit Act.

 

Section 44(1) of FOIA provides a statutory bar against the release of information if such release is prohibited by or under any enactment. In this case, that enactment is section 237 of the Enterprise Act 2002, which prohibits the disclosure of specified information other than in certain circumstances. The exemption under section 44(1) of FOIA is absolute.

 

Given that all of the withheld information either consists entirely of, or contains, specified information, the Commissioner would consider that it is completely covered by section 44(1) of the FOIA. As this is an absolute statutory bar, unfortunately the Commissioner cannot assist you further in obtaining the withheld information. He has no jurisdiction to assess the merits of a public authority’s application and interpretation of any legislation other than that which he regulates.

[Halifax71]

Ah right, remember seeing the Swift reprimand as well. As you say maybe move that discussion elsewhere as it's off topic.

 

We'll get there in the end.

[Halifax71]

Not really a digress as it's all interlinked.

This market is corrupt, and the regulators have, so far, shown a complete unwillingness / inability to deal with the issues.

 

If you read page 7 onwards of this http://www.bis.gov.uk/files/file41381.pdf

 

you'll see that I couldn't share any info given to me, it's just the OFT know that if they told me i'd be able to wipe the floor with Firstplus.

 

They are complicit - end of. Makes you wonder why my maladministration claim is taking so long to be considered.

[Halifax71]

The OFT have replied to our groups email.

 

They confirm:

 

They note the ruling, but it does not change their public opinion, which they repeat.

 

- The OFT previously imposed requirement under s33a of the CCA. http://www.oft.gov.uk/shared_oft/consumer-credit/first-plus.pdf

 

- The OFT had not found that Firstplus had acted in breach of the second charge lending guidance. ( it could be argued that this is true as the guide contains NOTHING regarding the reduction of rates, it only deals with the scenario of rate increases.

 

There's a lot of other waffle but essentially that is it, they're doing nothing. Why is my clause, and the other 50,000+ clauses OK? It's exactly the same wording and been administered in exactly the same way as the one that's been found to be unfair - in a court of law.

 

 

What we have here is a completely useless, bias, waste of space regulator. They infer that they have already done something, when in fact they have done nothing. They issued a s33a CCA reprimand after the harm had been done (i.e. after base rates fell), knowing full well that such reprimands have no retrospective impact (legally).

 

And when you ask why the reprimand was issued, or ask a simple question like "what cost increases have there been to warrant my rate being higher", or "why am I paying £8,000 more than I agreed to at inception", the OFT say they cannot say, "as it would harm Firstplus' commercial interests".

 

This really is a disgrace, the OFT are a disgrace.

 

I would urge all Firstplus customers to send the email detailed above if not already sent, and when they get the same refusals, contact your MP and demand action is taken.

[Halifax71]

The FCA don't want to know, they just say it's not their responsibility.

[Halifax71]

Sadly that is not the case. My experiences of the OFT and FOS over the past few years have left me gobsmacked.

 

 

I still have hopes for the FCA, but as they say it's not their responsibility, at the moment.

 

 

We're going to attempt to get more publicity for this, the OFT deserve every possible criticism as they have forgotten who they are supposed to be protecting, i.e. what their job is.

[Halifax71]

Everyone got the same reply from Barclays. I've just had my response from the FOS. They won't intervene either - we all have to go to court apparently.

[Halifax71]

Maybe, but they always say they are covered by the Enterprise Act and do not have to supply most information....

 

 

Agreed.

 

 

Section 241a of the Enterprise Act should however allow disclosure so a person can identify whether they have been wronged. There are stringent restrictions with it, e.g. you cannot share etc. Even using that though I've found that the OFT refuse citing public interest and protection of commercial interest. And then when you claim that the OFT are maladministrative in their interpretation of s241a the Parliamentary Ombudsman take 3 YEARS (and counting) to consider. There is something seriously wrong here.

[Halifax71]

Cheers Andrew, deleted my address so not bothered about name and reference to be honest. They (FOS, OFT, PHSO) know there's something seriously wrong here, I'm just waiting for disclosure of the reasons for the OFT reprimand and i'll be filing my claim. It's about time the FOS was disbanded like the OFT, absolutely useless.

[Halifax71]

Are you referring to a class action? After selling our home we still had an outstanding balance of £5777 in Feb 2006. We still owe them £4000 even though we have been paying £70 per month ever since. As the rate increase happened after the part settlement and only on the £5777, I am wondering if I can pursue it in the small claims court as the amount is under £6000?

Also as people are looking for the difference between the rates to be paid back on the second mortgage maybe they could use the small claims court to claim the difference as the amount may be under £10,000. Works out a hell of a lot cheaper!

 

 

Not sure a class action is the way to go. The claim in my mind is that the loan should have tracked. Every base rate increase was applied in full, citing base rate increases. That said, I think i'll claim it should be fixed, i.e. the variation clause is unenforceable. By doing that it would get me under the £10k limit, whereas with a tracker I'd be over.

 

 

I can't go into detail re the ongoing PHSO case but for it to take this long, and for it to be treated as a hot potato like it has proves to me that my argument is not without substance.

[Halifax71]

The fight continues.

 

 

Firstplus state the case here is not binding and counter citing another case where, they say, the judge found the clause to be fair. I know that is rubbish as the arguments put forward were incorrect - long story involving an incompetent barrister.

 

 

Anyhow, we move on and are due to take the issue back to court soon.

 

 

Personally I'm still waiting (over 4 years now) for the regulators to tell me what Firstplus did wrong when the reprimanded Firstplus. The continue to argue the legalities of disclosing under section 241a of the enterprise act, an act specifically brought in to assist consumers obtaining disclosure. 4 years - disgraceful. The OFT were found to have been maladministrative in their consideration but by the time the Parliamentary Ombudsman decided that the OFT had closed. The CMA reconsidered but now say it is not necessary for my contemplated proceedings. It's back with the Parliamentary Ombudsman now.

 

 

I have accused the lot of them colluding and of being complicit in a cover up following the partial disclosure from the ICO -

 

This shows that the tail wagged the dog and clearly shows that the OFT, incompetent as they were, found that there was a breach of the second charge lending guidance. Their incompetence / collusion in failing to deal with the material harm - evidenced to them via the published accounts will be a matter for the courts.

 

 

Just waiting for the Parliamentary Ombudsman to notify me of their latest dodge then it's off to court I go - and I have masses of irrefutable evidence that proves profiteering, i.e. we're paying for PPI liability and the UTCCR's have been breached. It'll just depend whether the judge is prepared to do the right thing. I'm under no illusions that I'm taking on a bank, but all they had to do was treat me fair, but they haven't, not even close. Second charge loans are always going to have a stigma attached to them but I went into this with my eyes wide open - I honestly thought this was the answer and DID read the T&C's - I thought they were unambiguous, biggest mistake of my life.

 

 

The regulators are a disgrace

 

 

The OFT - "the SCLG does not require businesses to reduce rates when their costs decrease" - But they can increase rates when their costs increase. Wow - that's not how I read the T&C's

 

 

The FOS - "The way in which variations have been applied is generally in line with base rate" - Unbelievable, 80% reduction in base rates and 20% increase in APR.

 

 

I'll update when I have more info.

Edited June 3, 2015 by citizenB
removed link