To FOS or not to FOS that is the question

[buggerlugs1]

In February 2005, whilst my partner was studying full-time at university, we took out a consolidation loan with GE Capital. Their salesman told me that they could only give us a low APR of 6.4% if we also took out their PPI. In my naivety I assumed that the company was worried about us having a lot of debt with only one wage coming into the household and so on. We were in a tough corner at the time financially so reluctantly, I agreed to the PPI.

 

Recently I have been looking at paying the loan off early but, when I looked at the original credit agreement, I was shocked to see that the PPI had been charged for up-front and added to the balance of the loan and further interest has been charged on top. I believe the OFT and the FSA state that if PPI is a condition of the loan, then it should be included in the total charge for credit however, on my credit agreement it has been included in the loan advance. I had a go at calculating the actual APR, if the PPI had been included in the total charge for credit and it turns out that it would have actually been a somewhat less attractive 12.5% APR.

 

I intend to try to get a refund of this PPI and I'm sure I wont get any joy from GE. So, I am wondering whether to complain to the Financial Ombudsman Service or whether to go straight to the county court and issue a small claim. I can see that one advantage of using the FOS is that if I don't manage to get the matter settled to my satisfaction, I can still carry on and issue a small claim, so I could get two bites at the cherry so to speak. I would like to hear from anyone who has any opinions on this.

 

Cheers,

Buggerlugs

 

Pre CAG:

Intelligent Finance - Judgement in default, settled in full 13/09/06 (£690.17)

Cooperative Bank - Full out of court settlement 12/12/06 (£2426.50)

Settled after first LBA - now that's what I call cooperative!

Since joining:

BarclayCard - County Court Hearing 16/03/06

[reidnet]

Hi Buggerlugs,

You could be right about GE, I am fighting them at the momment over the same thing, Mis-sold PPI and it is a struggle with them. It may improve now as the matter is basically in the hands of the courts. They are some outfit to deal with, you have more chance of getting a drink out of a Scotsman than you have getting information out of GE.

 

Before you can complain thorugh the FOS you have to have had a final response letter from the company that you are complaining about. You will have to write to GE with your complaint, which they will respond with their basic bog off reply, you may have to follow that up with another letter until you get a final letter from them. Once you have their final answer then you can procedd down the road of the FOS.

 

It takes time and gets very frustrating with GE, but you have to keep the fight up.

 

I have posted some notes for Claimants that you may find of some use

 

http://www.consumeractiongroup.co.uk/forum/ppi/61081-ppi-some-notes-claimants.html

 

Plus the contact I used at GE Money was as follows..

 

Mr Rupert Peacock

Customer Relations Manager

GE Money Consumer Lending Ltd

53-61 College Road

Harrow

Middlesex

HA1 1FB

 

Direct Phone 0845 610 6532

Direct Fax 01923 426770

 

You will find that any response from the above , will be at the last minute or more than usual late and outwith any timescale you set, Best way is to keep at Him, I always sent copies of letters etc to Him by Fax and also by recorded Delivery mail, Not that it made any difference to the way he responded but at least if you have to go to court you will have evidence regarding contact with Him.

 

An I think they have run a course of Cutting and Pasting in Microsoft word as they like to repeat themselves and never get straight to the point..lol:-)

 

Having said that I did once get a prompt reply from Him, That was when My court summons arrived on His desk..

 

You may also find this report from the FSA interesting, Tut Tut Ge Fined for Mis-Selling Products and breaking the FSA Principles of Business.

 

FSA fines GE Capital Bank

 

Good luck and if you need further help Just ask..

 

Ian

[buggerlugs1]

Progress Update

 

On 29th March, Barclays finally coughed up in response to my claim for penalty charges on my Barclaycard, so I am now free to devote my time to the lovely GE Capital.

 

Since GE rebranded late last year, they have been chasing me for about £100 in penalty charges. In February, I sent a letter to their registered office in London stating that I believed the charges to be an unlawful penalty. I sent the letter by recorded delivery, so I know it got there and I have got the name and signature of the person who received it. I received no response to my letter and they have continued to send demand letters (about once a week) and to phone me both at work and at home (about once a week) but, each time I have sent them away with a flea in their ear.

 

26th March: Sent a letter asking for a written settlement figure to their registered office (also by recorded delivery), as yet I have had no response. As I understand it, under the Consumer Credit Act 1974, they have a month to supply me a settlement figure or they will be in default of the agreement.

 

10th April: Received one of their weekly telephone calls, I advised the operator that I had requested a settlement figure and told him that I had not received it yet. He offered to supply me with one (he was keen to give me a verbal figure over the phone), but I told him I wanted it in writing.

 

11th April: Fired off a Subject Access Request to their collections office in Leeds, they have got until 22nd May to provide me with all the information that they hold on me.

 

My claim against Barclays took about six months to come to fruition (mainly due to Barclays' delaying tactics) and I am tired of waiting around while these big financial institutions sit on the back-sides doing nothing. If I get a chance next week, I think that I will send my first LBA, so that the time that GE have to reply to it will run in parallel with the time that they have got to reply to the SAR and the settlement figure request.

 

Buggerlugs:)

 

PS: Thanks for your encouragement Reidnet.

[reidnet]

No Problems M8,

 

Good luck in your next Fight..lol

 

Ian

[grumpy001]

Hello buggerlugs,

re your initial thread, Dont mix up requirements of old style and new format credit agreements under the new rules. But first paragraph I agree,

 

Second paragraph, where ppp is on a credit agreement and shown as a seperate optional item, the APR will remain the same (assuming the same rate of interest is charged). It is only where it is a condition or where another supplementary fee/cost are added that the APR changes.

 

Para 3, spot on, exhaust the companys own compliance and complaints procedure then go external with full record keeping.

[buggerlugs1]

Thanks for your feedback grumpy001. I am not sure that I understand what you mean by old and new style credit agreements and the new rules. Could you please elaborate.

 

In paragraph two of my first post, I was referring to the OFT's guidance note from February 2000 namely, 'Discounted APRs and PPI' which stated:

 

"However, where a lender offers loans with or without PPI, and with an interest rate discount where PPI is taken out, there are in the Office’s view two separate agreements or classes of agreement, each of which falls to be considered separately for the purposes of the Regulations. The borrower remains free to decide whether or not to take out a loan with PPI – but the interest rate discount is available only if he does so. There is a clear link between the offer of PPI and the offer of credit on alternative terms and conditions (namely a lower rate of interest), and the fact that the terms and conditions of the credit offered are different in each case means that there are two different credit agreements. Under the agreement with the lower rate of interest, the PPI is in effect mandatory, and its cost therefore falls to be included in the total charge for credit."

 

I believe that this was made law by 'The Consumer Credit (Total Charge for Credit, Agreements and Advertisements) (Amendment) Regulations 1999' which stated:

 

"First, the 1980 Regulations are amended so that certain insurance premiums are required to be included in the total charge for credit, and all others are required to be excluded (regulation 3(e), (f), (g) and (h)). Those required to be included are premiums payable in respect of insurance arrangements required by the creditor for the sole purpose of ensuring that all or part of the credit, interest and other charges is repaid in the event of the debtor's death, invalidity, illness or unemployment."

 

In my case, the salesman told me that he could only give me an APR of 6.4% if I also took their PPI cover, thus in my opinion, the PPI was a condition of the loan.

 

Best regards,

Buggerlugs:)

[buggerlugs1]

Time for an update I think:

 

In my last post, (12th April) I had just fired off an SAR to GE. Well surprise, surprise, I got no reply to the SAR. So after waiting the prescribed period of 40 days, I sent a reminder letter but surprise, surprise, I got no reply to that letter either, so a week later, I lodged a complaint with the Information Commissioner’s Office (ICO). The next day, I received a partial response to my SAR from GE. In my SAR, I requested a copy of any information that they held pertaining to me. However, their reply just contained an itemised statement and a standard denial letter about penalty charges. So I sent another letter to them informing them that they were in breech of the Data Protection Act and listing the types of information that I required, however, I’m not holding my breathe waiting for a reply.

 

On 13th June, I received what appeared to be a standard response from the ICO which basically seemed to be aimed at fobbing consumers off. It stated that I didn’t need to make an SAR in order to reclaim penalty charges and it said that many financial institutions are struggling to deal with all the SARs that they have recently received. Well I'm sure GE (like a lot of other financial institutions) are busy with all the SARs that they have received. My heart bleeds for them honestly it does, but I fail to see why they should be allowed to break the law. If we were late with a repayment, would they accept the excuse of 'Oh, I've been very busy lately'? Would they hell! Also, the ICO assumed (wrongly) that the SAR was for the purposes of reclaiming penalty charges, so I wrote back to them to tell them it wasn’t and I have since had another letter from them apologising and basically stating that they will take my complaint a bit more seriously now.

 

I have given up trying to enter into any sort of dialogue with GE Money, not even the usual one-sided sort of dialogue that you get from these financial institutions, whereby they just send you standard ‘Go away and stop bothering us’ types of letters. GE seem to think they can just ignore their customers and don’t even bother trying to keep up the pretence that they give a sh*t. Given this fact, I decided it would be a waste of time sending any LBAs and I thought that I was unlikely to get anywhere with the SAR in the near future so, I resolved to proceed with my complaint. The fact was, I already had all the original paperwork, but I wanted to see what information GE had got (e.g. had they got a copy of the original credit agreement, did they have a recording of the telephone call when the PPI was sold etc). I’m glad that I took my time though and tried to obtain all of the information that I could, for instance one of the points that I was going to make in my complaint was that I would not get a pro rata refund for the PPI, if I cancelled it early but it turned out that I would.

 

I was aware of the trouble that Reidnet has had from GE Money during the county court process, so I decided it was well worth complaining to the Financial Ombudsman Service (FOS) first before resorting to court action. I am lucky in that I only took the loan out two years ago, in 2005, so I believe my loan falls under the jurisdiction of the FOS. So, on Monday, I fired off the FOS complaint form along with supporting evidence.

 

That should be another flea in GE’s deaf ears! It’ll be interesting to see if the FOS can get more of a response from GE than I have had.

 

buggerlugs:)

[reidnet]

Hi Buggerlugs,

Good to see you are getting on well GE.. , They have to be one of the worlds worst dealing with complaints etc.

 

Well I have just found out some very Interesting Info and a case recently that could just have GE running crying and throwing the dummy out of their Pram yet again. It might not be too helpful for direct GE customers though, But it will be good for anyone who has had a loan set up by a broker. In my case GE were acting as a broker...

 

I am just double and treble checking some bits and Pieces before I shout too much about this, also having some Legal guys look over it before I hit GE with it. Basically if it proves to be correct Im sorry but GE will not have a leg to stand on.

 

Good luck with the FOS m8, No doubt they will be pretty snowed under with complaints at the momment too.. Glad to see you are still fighting hard though.

 

Ian