Gooner73 v Swift Advances

[gooner73]

I had a £60,000 secured loan over 25 years with Swift Advances that I was in arrears with. I managed to negotiate a re-mortgage with another company just in time to settle the loan a week before my house was due to be re-posessed. The settlement figure was just under £80,000

 

This was roughly broken down as..

 

Original Loan - £60,000

Interest - £18,000

Payments Received - (£10,000)

Legal Fees - £1000

Default/Litigation Charges - £6500

ERC - £4500

 

Redempton Figure - £80,000

 

I have been through the whole claim process. They offered to reduce one of the default charges from £1050 to £250 and sent me a cheque for £800. I filed an online claim for £6800 (Charges + Interest & Costs) at the end of October. They acknowledged on day 14 and filed a defence on day 28.

 

I received my allocation questionaire in the post this morning. As my sister is a solicitor, I have excellent legal advice! I thought I would post here as it seems that this one might go all the way!

 

The outline of their defence is..

 

1. That they admit they deductied charges in accordance with the terms & conditions and in accordance with normal industry practice.

2. They deny that the charges are punitive and that they represent an estimate of the likely costs.

3. They deny that the provisions of the Unfair Contract Terms Act 1977 apply. If the UCTA 1997 does apply then the charges satisfy the requirement of reasonableness.

5. Thay deny that section 15 of the Supply of Goods & Services Act 1982 apply. If the SGSA 1982 does apply then the charges satisfy the requirement of reasonableness.

6. If the charges are not enforcible, the defendant is still entitled to damages for breach of contract.

7. As a result of the breaches of contract, they are intitled to recover the costs of postage, stationary, telephone calls, employing staff, management of staff, premises, heating, electricity. IT equipment, IT Support, IT systems, HR costs.

 

To me, this defence is a joke and I would be interested to hear any comments. Obviously it goes into a bit more detail, but this is the jist of it. I will run it past the expert eye of my sister and see how we can nail them!

 

In addition to the charges, they added an extra 1% interest on late payments, which I am not claiming. I think that 1% is a fair reflection of their costs and I will let them know this!

[mrsfoot]

I had a £60,000 secured loan over 25 years with Swift Advances that I was in arrears with. I managed to negotiate a re-mortgage with another company just in time to settle the loan a week before my house was due to be re-posessed. The settlement figure was just under £80,000

 

This was roughly broken down as..

 

Original Loan - £60,000

Interest - £18,000

Payments Received - (£10,000)

Legal Fees - £1000

Default/Litigation Charges - £6500

ERC - £4500

 

Redempton Figure - £80,000

 

I have been through the whole claim process. They offered to reduce one of the default charges from £1050 to £250 and sent me a cheque for £800. I filed an online claim for £6800 (Charges + Interest & Costs) at the end of October. They acknowledged on day 14 and filed a defence on day 28.

 

I received my allocation questionaire in the post this morning. As my sister is a solicitor, I have excellent legal advice! I thought I would post here as it seems that this one might go all the way!

 

The outline of their defence is..

 

1. That they admit they deductied charges in accordance with the terms & conditions and in accordance with normal industry practice.

2. They deny that the charges are punitive and that they represent an estimate of the likely costs.

3. They deny that the provisions of the Unfair Contract Terms Act 1977 apply. If the UCTA 1997 does apply then the charges satisfy the requirement of reasonableness.

5. Thay deny that section 15 of the Supply of Goods & Services Act 1982 apply. If the SGSA 1982 does apply then the charges satisfy the requirement of reasonableness.

6. If the charges are not enforcible, the defendant is still entitled to damages for breach of contract.

7. As a result of the breaches of contract, they are intitled to recover the costs of postage, stationary, telephone calls, employing staff, management of staff, premises, heating, electricity. IT equipment, IT Support, IT systems, HR costs.

 

To me, this defence is a joke and I would be interested to hear any comments. Obviously it goes into a bit more detail, but this is the jist of it. I will run it past the expert eye of my sister and see how we can nail them!

 

In addition to the charges, they added an extra 1% interest on late payments, which I am not claiming. I think that 1% is a fair reflection of their costs and I will let them know this!

 

Hi Gooner

Read your post with interest especially as your defence is exactly the same as mine!! I have already returned my AQ. Beware that they will send you your copy of theirs on the day it is due in, and they are very underhanded, so if you can try hold out till the day it is due so you can see what they have put. Keep it up and good luck, please keep me informed of how you go and if i go to court you are more than welcome to use my case as evidence if needed

 

MrsFoot

[alanfromderby]

I note that you filed online, have you sent any further particularisation of the claim?

 

Just concerned that they may try and pull something with their AQ.

[gooner73]

Thanks for the advice Mrsfoot. As I said before, I am sending all the documents to my sister to look over and I will pass on any advice from her that may help our cases.

 

When Swift's in house solicitors acknowledged the claim, I forwarded them a copy of the schedule as a I stated that I would do this on the claim form. I have not had any other correspondance, although they did try to call my home number and left answerphone messages in the days leading up to the filing of their defence.

[gooner73]

While preparing my case, I noticed in the small print that the PPI runs for 5 years even if the loan is repayed aparently you can still claim under PPI even after the loan is repayed!? (How does that work?)

 

I really wish I hadn't taken the PPI out as it I might as well have flushed £5000 down the toilet, but hey, you live and learn!!

 

Anyway, it seems that the PPI is only cancelled if you request it and they will then calculate a refund at 25% of the remaining monthly payments starting from when you cancel the PPI.

 

I think this is disgusting! It is an abuse of small print!! Surely when you redeem a loan, the PPI should stop and a full refund be given on the remaining payments?? And this should be instigated automatically by the Finance Company and not by the consumer.

 

Anyway, I am going to ask for a full refund of the remaining PPI dating back to when I redeemed the loan. Does anyone rate my chances?

 

Any advice would be apreciated. Should I get the charges and pending court action out of the way first? Should I claim the 25% now and then complain later, or complain at the same time I cancel the PPI?

 

I haven't even started on the ERC yet!!!

[HAIRYLADDER]

Hi Gooner (I can't believe I am about to help an Arsenal supporter, joking of course)

 

As far as the PPI is concerned you have probably got a good chance of claiming that it was missold. The FSA, (I'm assuming that you took out the PPI after the 15th Jan 05) have castigated and fined (The Carphone Warehouse 245K, Regency Mortgage Corporation 56K and Loans.co.uk 455K) for misselling PPI, and in particular it related to single premium 5 year policies. The OFT are also investiagting PPI for competition issues and under Sect 8 of the Enterprise Act. So although you may not be able to follow the route of excessive charges etc all may not be lost.

 

The first thing to do is to complain to the broker that sold you the policy, clearly they won't be interested but you have to give them the chance to rectify the situation. Swift also has an obligation under the FSA's Treating Customers Fairly initiative to design products that meet their customers needs and consider the sales channels it uses (again I am assuming that you bought Swift's policy, however if you didn't then the same applies to whichever firms policy you bought. They will contest this because they know nothing about compliance) to ensure that only products suitable for its target market are sold.

 

The important thing here is how thr product was sold and whether or not you received all the information necessary and in a timely fashion so that you could make an informed choice. It would probably be easier to prove miselling if you were offered advice, although a non-advised sale requires also requires a firm to 'have due regard to the intersets of its customers'

 

Did you received an Initial Disclosure Document, a statement of demands and needs, and for an advised sale an explanation as to why the policy was suitable. Given that you were about to be repossessed we you may be bale to try the affordability angle, ie you couldn't afford the policy and therfore it shouldn't have been sold to you. One other point, why were you sold a 5 year policy to cover a 25 year loan term?

 

I'm happy to review any other info you may have, in the menatime this link will take you to the FSA's rule son the sale of PPI, remember for this to be applicable you would have had to take out the insurance after the 15th Jan 05

FSA Handbook - Full Handbook

 

Regards

[gooner73]

My sister has advised me on completing the AQ Including submitting a list of proposed directions and requesting a case management conference.

 

She is concerned that I am taking on a considerable costs risk and while she hasn't researched this subject as much as myself or other people on this site, she does urge me to make a reasonable settlement offer at this early stage.

 

While I really feel that I should continue with my claim as my gut feeling is that Swift are just bluffing and if it came to trial I would love to have to make them reveal their costs. I am a little worried, like many people would be when faced with the possibility of having to attend a court trial.

 

With everything that has happened to me over the last few years, I don't fancy my luck too much. I will give it some thought.

[gooner73]

Thanks for your post Hairyladder regarding the PPI.

 

I took out the mortgage with swift in January 2003 for £54,000 over 25years and took Swift's own 5 year fixed term poilcy of £5,400 which was added to the loan amount.

 

I guess this means that the payments were spread over 25 years, but it specifies in the small print that the cover ceases after 5 years.

 

To be honest, I can't remember whether they sold me the policy in a manner that was in my best interests or theirs.

 

I am just annoyed at them for not informing me that I could cancel my policy when the loan was redeemed. I find this very underhand. I would also like to know why I am not entitled to a full refund of my remaining premiums.

 

The only evedence I have of the of the poicy being mis-sold is that they sold me a 5 year fixed term policy for a 25 year loan, but as I took out the loan in 2003 I don't know where I stand.

[mrsfoot]

HI Gooner, Swift are willing to take every step possible not to pay out, i was in court friday with mine for an allocation hearing and it was allocated to fast track, even though its under the small claims limit as Swift quoted CPR 22 (i think it was 22 anyway) and won the argument hands down!

I would be interested in who is deraling with your case and also recommend you look through Civil Proceedings Rules handbook before you do much else. Have you received their AQ yet? Will your sister be representing you? Keep going, i have now sent part 18 for them to complete within 14 days, be very interesting to see what comes back!

 

Mrsfoot

[gooner73]

Hi Mrsfoot. I have been following your case with interest. As my claim is for £6800 I am not going to argue for small claims as I don't really stand a chance. (Which is why I am worried about costs) I expect to receive their AQ on Friday or Saturday as the last date for filing is 17/12. Did they spring any surprises with your AQ??

 

It is interesting that they seem to want to take this to court. It may be an idea to follow my sister's advice and try and negotiate an out of court settlement, especially if they refuse any offers. Once the Court have made a final decision on liability, account will be taken of the steps taken by the respective parties to attempt to resolve the dispute. The Court can penalise a party in costs if they are found not to have accepted a reasonable offer prior to the hearing.

[alanfromderby]

Whilst negotiating a settlement is fine - it is important not to negotiate away a legal entitlement. If the charges involved are unlawful penalty charges, then there is nothing to negotiate, and no judge would expect you to take part in a process that would end with you losing out due to the unlawful actions of the other party.

 

Of course, if there is a genuine dispute over the level of a particular charge for a specific service, then that MAY be an area for negotiation. Otherwise, it is for the defendant to show that they have been put to the costs they have taken from your account.

 

BTW, Fast Track claims (£5k to £10k) are limited to £500 costs - except in VERY exceptional circumstances, and of course, that would only be the case if they turned up in court - and you were to lose.

 

But, at the end of the day, it is your claim.

[gooner73]

I recieved a copy of Swift's AQ in the post this morning. They have one witness to the conduct of our account and are not calling any experts. They are estimating their costs to be £10,000!!!

 

Alanfromderby I have checked the CPR website, but I can't find the rules on cost limits for fast-track claims. Can you point me in the right direction?

 

My case is quite complicated due to the way swift lay out their charges.

 

Only £752 are for default or arrears charges (Penalty Charges)

£418 for Admin Fee's (including £250 for redemption fee)

£742 for sending 13 letters and receiving (yes receiving!) 3 Faxes.

£94 for 2 redemption quotes.

 

Plus 2 x collection charges (levvied on the day I redeemed the loan) of £1952.50 & £1968.18

 

The first charge of £1952.50 includes a monthly management charge x 19 @ £70 per month + £822.50 for dealing with court hearing, optaining possession order and issuing a warrant (The warrant fee was detailed seperately on the list of charges and which I am not claiming)

 

£1968.18 were their litigation fees. Swift have never provided any evidence of how they arrived at these amounts. If they do, I am willing to reduce my claim accordingly.

 

The problem I have is that I am finding it difficult to distinguish between penalty charges and unreasonable costs for a service.

Is the "Monthly Management" charge of £70 per month a penalty charge due to my breach of contract or a service provided by having someone actively "Manage" my account?

 

It is interesing that Swift actually deny in their defence that the Contract Agreement is a contract for the suppy of a service. Does this mean that these charges are therefore penalty charges? It is all very confusing!

 

My feeling is that the best I can get at trial is a partial amount of the figure I am claiming as I am sure Swift are entitled to their litigation fees and I expect them to provide evidence of this to the court even though they have failed to provide any to myself thus far!

[alanfromderby]

CPR Part 46.2(1)

 

The approach I adopted with Bristol & West was to list ALL the charges, and put it to THEM to provide a full explanation and justification, along with documentary evidence.

 

If they fail to provide justification (along with proper proof), then you can reasonably include that charge within your claim. Once your case is underway, you could then issue a Part 18 to force them to provide supporting evidence.....and wait for the fun to start.

[gooner73]

Thanks Alan. This has put my mind at rest! Do you think swift's solicitors are not aware of the cost limitations for Fast Track? or maybe they are just quoting figures of £10,000 to scare me into withdrawing my claim? Can I complain and if so, who do I complain to?

 

Congratulations on your settlement by the way, fantastic result! Have a wonderful Christmas break. You deserve it!

[alanfromderby]

Thanks for the wishes, and hope you have a great Christmas and New Year also.

 

It is a scare tactic, and one that will not impress the judge. At this stage I don't think a complaint would really achieve anything. The FSA won't touch it whilst the legal process is on-going, and the Law Society don't seem to be interested in anything.

 

Certainly though, it is worth keeping to hand, and possibly using later in the process as evidence of their failure to seek a properly negotiated settlement.

[gooner73]

In light of Barry loosing his case against swift, I need to issue an order for them to disclose evidence of the reviews that Swift make of the "Credit Control Function"

 

At the moment my case is at the disclosure by list stage, so do I wait until I receive their witness statements before asking the judge to make this order?

[alanfromderby]

I think it is now more vital than ever to use the court process to obtain every bit of information you can before trial. The latest tactic is clearly to ambush claimants when they reach court.

 

Part 18 requests, and orders if necessary, are now essential. I would also be including reference to the failure on the part of the defendant to comply with the pre-action protocols - in particular 4.6©.

 

 

4.6 If the defendant does not accept the claim or part of it, the response should –

(a)give detailed reasons why the claim is not accepted, identifying which of the claimant's contentions are accepted and which are in dispute;

(b)enclose copies of the essential documents which the defendant relies on;

©enclose copies of documents asked for by the claimant, or explain why they are not enclosed;

(d)identify and ask for copies of any further essential documents, not in his possession, which the defendant wishes to see; and (The claimant should provide these within a reasonably short time or explain in writing why he is not doing so.)

(e)state whether the defendant is prepared to enter into mediation or another alternative method of dispute resolution.

[gooner73]

I am currently writing my disclosure list. Witness Statements are due to be filed within 2 weeks. I don't see the point of filing a part 18 until the witness statements are filed as in Mrs Foot's case, they just said that all information requested in the part 18 would be included in the witness statements (But of course weren't) so I will have to wait!

 

An extract from a letter from Swift regarding my complaint.....

 

"As part of our group is authorised and regulated by the FSA we are required to perform an evaluation of the revenue and the costs from our first mortgage arrears activities. such costs include a proportion of staff costs, premises, stationary and telephone and IT systems. We are satisfied that this evaluation meets our regulatory requirments."

 

This information is what I will be asking for in my part 18 as this was exactly the information that Barry needed in his case against Swift to prove that they indeed make a profit from the charges and not just break even as the witness claimed. As Barry had not asked the court to order them to present this information to the court prior to the hearing, The judge had to accept the witness statement as there was no evidence to the contrary.

 

I thought that in the mean time I could try another angle.

 

As these companies are regulated by the FSA, does this mean that the FSA keep detailed audit reports on the companies they regulate?. If this information exists, can this not be used to support our claims?

 

Does anyone have any experience with the FSA and getting information regarding the audits / compliance reports on the companies that they regulate? I guess that they will say that this information is confidential but if that is the case, can we not get the courts to order them to hand the information over?

 

Any advice or information would be greatly apreciated.

[gooner73]

Another thing! my disclosure is due next week followed by the witness statements 2 weeks later. After which, I will issue my part 18 as I will require further information. (Its difficult as I know what the witness statements will say as I assume they will be exactly the same as Barry and Mr's Foot's, But I have to give them the opportunity to not give me any information regarding their costs before I ask for it. ) Anyway.

 

I'm confused about disclosure!? If I get information from my part 18 request (Unlikely unless I get an order from the judge) surely I will have to add this to my disclosure list? otherwise I will not be able to rely on it to support my case. Am I allowed to ammend my disclosure list if I receive further information from my part 18 request at a later date?

[alanfromderby]

Their response to a Part 18 should be forwarded to both you, and the court, therefore the documents become part of the case file anyway.

 

Have a good read through the Part 18 process. It is complex, but it is worth doing as it will help you better understand what to do when they fail to answer the questions.....or am I being over cynical?

[gooner73]

Thanks Alan. I will read CPR on part 18. I had a look at the CPR for disclosure last night and it answered some of my questions. As I am a PC engineer I have a habbit of trying to figure out things myself before reading the manual!

 

P.S. I don't think you are being cynical! As I said before, I am behind Alan & Mrs. Foot's cases, against Swift so I know what they are going to say and do before it happens. They haven't surprised me yet!

[gooner73]

UPDATE..

 

I have a case management telephone conference set for 16/04/07. This is an administrative hearing before a Judge when the Judge can check that the preparations for trial are on track and make any further orders required to assist this. It is also an opportunity for the parties to explore whether the claim is capable of settlement. I have already sent them a letter (Part 36 CPR. "Without Prejudice save as to costs" ) indicating that I would be prepared to except a settlement figure that is far less than the amount I am claiming. However I never even received an acknowledgement of this. Apart from Swift sending me a "Goodwill" refund of approx 10% of the amount claimed (Accepted as part payment before court action) they haven't made any attempt to settle this matter without court action.

 

The witness statements must be received by both parties by 30/03/07. After this, I intend to submit a part 18 request for further information. I expect them to send me a witness statement similar to Mrs Foot, so my part 18 will ask them to provide evidence of their internal review where they concluded that their Credit Control Department doesn't make a profit which should be included in their witness statement.

 

As Mrs. Foot's case they will object on the grounds that the request is excessive for the case at which point I will ask the judge to make an order for them to disclose this information. Hopefully the judge in my case will side with me, but after Mrs. Foot's experience I'm not holding my breath!

 

I read somewhere that a judge has ordered disclosure in some cases but I can't find the threads. However I assume at this point the defendants have caved in and offered reasonable settlement. As swift stated that they are willing to go to the high court if they loose, what's the odds that they won't offer settlement if the judge grants the order? ;-)

 

I'm not sure what to expect from the case management conference. By the time the date comes along, I expect to be ready to ask the judge to order disclosure. Should I use this opportunity to sweet talk the judge? ;-) Will I be able to make the judge aware of cases where disclosure has been ordered? If anyone can offer any advice it would be apreciated!

 

Until then I have to just sit back and wait!

[mrsfoot]

Gooner, had a thought. It might be a good ldea if we swap correspondance from Swift. It would be very interesting to see if what they have sent you mirrors what they have sent me....evidence of standard letters and simply cutting and pasting info onto standard letters for correspondance and then charging the earth for them! Just a thought!

[Guest beedydad]

Hi Gooner

 

Gone quiet, are you able to update?

 

I am interested as have a problem, like many others, with Swift and really do wish to make an approach to them and take them as far as possible.

 

Unless, that is you have backed off due to potential spirraling liabilities/costs?

 

Cheers

 

Beedydad

[mrsfoot]

Hi Gooner

 

Yes you can amend your disclosure list, I had to when i found i have left my own Witness Statement off lol

 

3 more sleeps till court, well that would be the case if i could sleep lol keep having thoughts at 3 in the moring as to what i think i they will say and what i need to come back with lol

 

Good luck