SPML/LMC anyone claimed for mis selling and unfair charges?

[Suetonius]

Please bear in mind with the above, it does have to be personalised to your specific circumstances, for example mortgage vs secured loan and regulated vs unregulated etc....

 

If your complaint is not upheld, ask the Adjudicator for his or her comments on this specific extract:

 

But the central question that will no doubt be raised increasingly with the Ombudsman is whether or not the charges levied are lawful. More generally, as my earlier brief example of the mortgage arrears fee shows, the application of extensive fees for customers already experiencing debt problems may not be fair treatment. Certainly it does not always sit well with the sympathetic and positive treatment of those in hardship.”[/i]

 

Source: speech by Tony Boorman, decisions director and principal ombudsman, at the CML's complaints-handling seminar –London, 12 March 2008.

[Suetonius]

The FOS is getting more and more inundated with complaints. Before you go to it, it is important that you first complain directly to the Lender concerned.

 

Hello BTM

 

I think the case is not only already with the FOS but has been allocated to an Adjudicator and the question is that it would appear that only one charge will be refunded...

 

My claim has at this point been passed to an adjudicator whomI have informed of all issues with the aforementioned ****! The adjudicator has today come back and advised me that due to them refunding this single charge, the whold case is going to be looked at again in the next few days in order for him to make his final deecision.

 

Should I be worried? The reason for the charges mainly stemmed from late payments as beore my court appearance they refused to change the date of payment. Yes they did refund one charge but I strongly believe they need to refund all the charges. Is this a lost cause, I am quite concerned now

 

Hence...

 

You could email the Adjudicator something along the lines of

 

Slgsue, it might be advisable to contact the adjudicator before any decision is made in relation to the outcome.. Make the adjudicator think about the issues, especially with regard to the comments made by the Decisions Director for the FOS. After all decisions are the outcomes of complaints...

 

One other thing, the Adjudicator can not make a final decision, only an Ombudsman has the power to do that....

Edited February 1, 2011 by Suetonius

[Suetonius]

blows that idea then.... Sorry Tifo.. Thought it might have helped...

 

I'll put the old thinking cap on

[Suetonius]

Ok just for starters....

 

And another thing the adjudicator said is that GMAC/Kensington etc were fined for mistreating their customers and not for charging arrears fees and because my mortgage provider hasn't had any fine imposed (a high street bank) then the FSA fines on others are irrelevant as it only applies to a certain bank.

 

http://www.fsa.gov.uk/pubs/final/gmac_rfc.pdf

 

Arrears charges

4.16.GMAC imposed certain charges related to activities carried out whilst the customer was in arrears, in circumstances that resulted in the unfair treatment of customers.

4.17.These unfair charges were:

(1)charges for non-payment of the monthly mortgage payment by direct debit, when the account was in arrears and no monthly payment was being made;

(2)calculation and imposition of the Early Repayment Charge on mortgage balances which included arrears fees and charges within that balance; and

(3)the proportion of the solicitors’ instruction fee that exceeded the actual cost.

 

4.18. The above charges were unfair because they did not accurately reflect the additional administration work to the mortgage account caused by the fact that the customer was in arrears.

 

5.5. In addition, GMAC did not treat its customers fairly as a result of applying certain charges and fees to customers’ accounts that were unfair as they did not accurately reflect the additional cost of administering an account in arrears in breach of MCOB 12.4.1R and 13.3.1 R.

[Suetonius]

As per the link in my original post for the final notice for GMAC, I would send a copy to the Adjudicator. You could then call him/her directly afterwards and read through it with them so that they can't deny what it actually has to say...

[Suetonius]

1. How he can call the charges fair without having investigated their actual cost (with a breakdown), especially if he says they're outside his remit.

2. Where it says they can't look at arrears charges (he pointed me to the FSA Handbook).

 

http://fsahandbook.info/FSA/html/handbook/MCOB/12

http://fsahandbook.info/FSA/html/handbook/MCOB/13

 

Ask the adjudicator (when you get a replacement) about these sections of the FSA Handbook as posted by Peter

[Suetonius]

I'm struggling to understand how it would apply to private owners. Can you clarify?

 

Your not the only one struggling AM... I am right there beside you, so to speak

 

Article 8

Right to respect for private and family life

 

1.Everyone has the right to respect for his private and family life, his home and his correspondence.

 

2.There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

 

A mortgage lender is not, unlike for example a Court, hearing the repossession proceedings a public authority to which article 8 applies.

 

 

Public authorities

Acts of public authorities.

 

(1)It is unlawful for a public authority to act in a way which is incompatible with a Convention right.

 

(2)Subsection (1) does not apply to an act if—

 

(a)as the result of one or more provisions of primary legislation, the authority could not have acted differently; or

 

(b)in the case of one or more provisions of, or made under, primary legislation which cannot be read or given effect in a way which is compatible with the Convention rights, the authority was acting so as to give effect to or enforce those provisions.

 

(3)In this section “public authority” includes—

 

(a)a court or tribunal, and

 

(b)any person certain of whose functions are functions of a public nature,

 

but does not include either House of Parliament or a person exercising functions in connection with proceedings in Parliament.

 

The intention of Parliament was that a wide range of bodies performing public functions would fall within the obligation under section 6 to act in a manner compatible with the “Convention rights” established under the Act.

 

However, while the Convention had been designed to protect the individual from abuse of power by the State, the Human Rights Act was enacted at a time when the map of the public sector had been redrawn, as privatisation and contracting-out had, over several decades, increased the role of the private and voluntary sectors in the provision of public services. This development was acknowledged and considered by those who drafted and debated the Act. In particular, it was clearly envisaged that the Act would apply beyond activities undertaken by purely State bodies, to those functions performed on behalf of the State by private or voluntary sector bodies, acting under either statute or under contract. The Act was therefore designed to apply human rights guarantees beyond the obvious

governmental bodies. Section 6 identified two distinct categories of “public authorities” which would have a duty to comply with the Convention rights.

 

First, under section 6(3)(a), “pure” public authorities (such as government departments, local authorities, or the police) are required to comply with Convention rights in all their activities, both when discharging intrinsically public functions and also when performing functions which could be done by any private body. So, for example, a local authority must as a pure public authority comply with the non-discrimination standards imposed by Article 14 of the Convention not only in its provision of public housing but also in its dealings with building contractors.

 

Second, under section 6(3)(b), those who exercise some public functions but are not “pure” public authorities are required to comply with Convention human rights when they are exercising a “function of a public nature” but not when doing something where the nature of the act is private (section 6(5)). Only those bodies which fall within either of these categories (“pure” or “functional” public authorities) have a direct obligation under the Act to comply with Convention rights. The meaning of “public authority” is therefore crucial to securing comprehensive human rights protection.

Edited February 22, 2011 by Suetonius

[Suetonius]

I think that is the most beneficial way to look at it.

 

Whilst article 8 does not apply to the lender as it is not a public authority, it does apply to the Court itself as a public authority.

[Suetonius]

the FOS do not use previous decisions as in any way precedental but judge perhaps on a case by case basis then of course you have the adjudicator lottery to contend with.

 

That is correct. A precedent is something that is set by a Court and not by a limited company with statutory powers.

 

http://www.financial-ombudsman.org.uk/faq/answers/research_a1.html

 

"But remember – we look at each complaint on its own merits. So if you read about a case that appears to be similar to yours, don't assume that we will always reach the same decision. Much depends on the details of each individual case."

 

The point of quoting extracts from the FSA and directly from the FOS is not an attempt to say that a precendent has been set, rather it is away of building your own case and the arguments for a refund of the charges.

 

If you receive a response which is contradictory to the quote previously posted from the FOS, ask the Adjudicator to explain exactly why their view is different from the principle ombudsman and decisions director for the FOS. Under the FSMA 2000 they only have to consider the law (including legal precedence) and not reach a decision based upon it. It is all about builing up your own case and arguments.

 

In other words, the stronger your own argument the more likely you will have some success.

[Suetonius]

On another connected note, I have read that some people have been told that they can be charged a late fee by the FOS because it is in the terms and conditions.....

 

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/50/banking-contracts.htm

"When we look at banking disputes involving contracts, we take into account the firm’s duties under the Banking Codes. We consider relevant statutes, such as the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contract Regulations 1999. We also consider the Financial Services Authority’s Statement of Practice, Fairness of Terms in Consumer Contracts (published in May 2005). This gives firms an indication of how they can avoid using terms that could be regarded as unfair. It is particularly relevant when we look at terms to do with interest rate variation.

 

In addition, and very importantly, we are required to decide what is ‘fair and reasonable’ in a given case. This may mean deviating from the ordinary or strict legal position where that is necessary to ensure a fair outcome."

 

The decisions made by the FOS are not always based upon law etc but rather what it considers to be both fair and reasonable. Hence the previous posted quote from the FOS

[Suetonius]

In my complaint, the adjudicator said that investigating mortgage arrears charges is not within their remit

 

http://www.financial-ombudsman.org.uk/publications/pb09/pb09-4.html

 

mortgages

 

These cases are expected to increase in line with tighter lending policies and a higher level of repossessions. Some issues relating to sales and contract terms will emerge as customers reach the end of existing deals and find renewal terms unattractive. And there is the potential for a significant volume of disputes around mortgage late-payment charges and other similar charges.

 

http://www.financial-ombudsman.org.uk/news/speech/CML_TB.htmlcharges

 

This leads me to the subject of charges. Mortgage charges have already raised issues with wider implications. The mortgage exit-fee issue was raised by us with the FSA in response to consumer complaints.

 

Our initial investigations found that firms had increased these charges where, in fact, they had no clear legal right to do so. In some cases, indeed, we doubted that they either had the right to levy such a charge in the first place or to vary the charge once it was set. And in other cases they needed to be able to demonstrate that any increases reflected the actual changes in their costs.

 

Some lenders had surprising difficulty with the concept that they could only charge what their contract provided for. It was clear that many had paid scant regard to the legal requirements when setting charges.

 

I was pleased that having raised this issue, we saw an industry-wide solution that largely avoided the need for individual customer complaints to be brought to the ombudsman. I hope that lenders have considered carefully the implications of these events across their business.

 

Elsewhere, the present debates about bank charges and the previous action of the OFT on credit-card charges are also relevant. We have already seen some customers raise queries about the level of charges made by lenders when they are in debt. The Citizens Advice report suggests that some lenders’ debt-collection practices are distorted by including steps that involve the customer paying additional fees. The range, complexity and level of these charges may all be matters for consideration. But the central question that will no doubt be raised increasingly with the ombudsman is whether or not the charges levied are lawful.

 

More generally, as my earlier brief example of the mortgage arrears fee shows, the application of extensive fees for customers already experiencing debt problems may not be fair treatment. Certainly it does not always sit well with the sympathetic and positive treatment of those in hardship.

[Suetonius]

With the FOS it might even be worth a try to stay completely away from any legal arguments and just concentrate on the fairness of such charges - (not as in the Unfair Contract Terms) as in how can it be fair to charge (therefore increasing the amount of debt) someone that may already be struggling to pay what they owe.

 

If that person cannot afford to pay what they owe how are they expected to pay more than they owe as a result of additional charges.

 

How can increasing the debt (by additional charges) be fair and reasonable ?

[Suetonius]

. As far as providing a breakdown in costs is concerned, I cannot compel the bank to provide this information.

 

The Adjudicator whilst familiar with section 228, should also be equally familiar with section 231

 

231 Ombudsman’s power to require information.

 

(1)An ombudsman may, by notice in writing given to a party to a complaint, require that party—

 

(a)to provide specified information or information of a specified description; or

 

(b)to produce specified documents or documents of a specified description.

 

(2)The information or documents must be provided or produced—

 

(a)before the end of such reasonable period as may be specified; and

 

(b)in the case of information, in such manner or form as may be specified.

 

(3)This section applies only to information and documents the production of which the ombudsman considers necessary for the determination of the complaint.

[Suetonius]

The way I understand it, there is nothing to stop anyone from sending further information to support their complaint to the FOS, once it has started investigating...

 

So even if someone made a complaint 12 months ago, they could still send the latest developments to support their complaint. Even if the case is now closed and was previously rejected by an Adjudicator, they could ask for it to be reviewed again (taking into consideration the latest developments) by an Adjudicator.

 

The only thing that would prevent this is if a Final Decision had been made by an actual Ombudsman.

 

You can supply more information to support your complaint, you just can't add new issues.. You always have to complain to the company involved first, giving them either 8 weeks or until you get a final response (which ever is sooner) before the FOS will investigate... Even then any new issue will have to be made as a seperate complaint...

[Suetonius]

Of course there is always the option of taking them to Court which is easier and less expensive then people generally assume....

[Suetonius]

Use their own rules against them... If they say they have no powers to request information, show them that they have...

 

If they say the charges are fair, ask them how do they know if they don't have a breakdown of each charge...

 

Use the search facility on the FOS website to finds lots of useful snipets....

 

You want to make it as hard as possible for them not turn down your complaint..

 

Just keep your complaint relevant....