Section 75 Claim - Consumer Credit Act 1974 (as amended)

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

I am not surprised that the CC Co. are relying on the fact that the Programme spans two years and therefore exceeds the limit under section 75. However, emphasis should be on the meaning of "single item" under s.75:



Now, I don't actually think the meaning of single item has been tested in the courts, although the Ombudsman appears to have on their website but in a different context. I don't think it is disputed that the agreement spans two years, however it is the payment terms which is what should be focused on.

The payments have been split into two invoices i.e. Year 1 and Year 2 which are to be paid separately and not as one large invoice. Therefore the argument is that by paying the Year 1 invoice which costs X, this is a "single item" in which the institution has attached a cash price between £100 and £30,000. In order for the claim to fall outside of s.75 the invoice would have needed to exceed £30,000 but it doesn't.

Ultimately, the wording of s.75 doesn't specify exceeding the total amount of the agreement but a single item. In the context of services, it would be sensible to say that each separate invoice would be deemed as a single item for the purposes of s.75.

As for the 1st contract and 2nd contract being for Years 1 &2, that would be stretching it if they are almost identical and do not specifically state the contract is for each separate year.

R0b. Thank you for this. It is much appreciated. I am due to speak with the CC Co. tomorrow to discuss this further; although I suspect their position will be unchanged and they want to stick to their argument that the "single item" in s. 75 in this instance refers to the "Programme" and the contract refers to the "Programme" and the "Programme" refers to it being a c. 2 year course. I agree with you that it is not surprising as a stance by the CC Co., as it is the "first line of attack" that I anticipated they would take (see back to the first few posts in this thread!).

In discussions over the phone with the CC Co. contact person, I have stressed the points you raised about the "single item" here being the Year 1 and Year 2 separately, and pointed to the invoices accordingly. The discussions over the phone are becoming a bit "stuck", as they repeat their position on single item and I repeat mine! My concern is where do we go from here?

Unless the CC Co. change their view this week, they will be writing to me to refuse this claim by the end of the week. I presume from there this is onto a complaint to the CC Co. and then onto the FOS for a complaint against the CC Co. However, I really would rather not have to take this to the FOS, as I suspect the FOS will (1) take a long time and (2) likely not be favourable at the FOS (or am I being too cynical?).

I'm open to any other suggestions as to how to otherwise solve the deadlock with the CC Co.

About the 1st contract and the 2nd contract being for Years 1 and 2, I do agree this is stretching it. Each contract makes no specific reference to which years: both just refer to a "Programme".

Any other tips on how to take this process forward are most welcome!

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Thanks - the AI have closed the matter; although are also now having to deal with the FOS behind the scenes presumably (re the FOS Ombudsman looking into the CCA regulated nature (or otherwise) of the FIRST and SECOND contract.

Have I missed something here? My general presumption is that even if the AI were to decide to launch a County Court claim against me, having a sufficiently established s. 75 claim (and the basis for that claim) would work a suitable defence against such a County Court claim (or better still; if a successful s. 75 is completed, rights and claims have been transferred to the credit card company).

[charitynjw]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Thanks charitynjw. Litigation in what sense?

The AI did attempt a DCA with some correspondence last year in relation to the fees for the second year; but after I underscored the disputed, they backed down and dropped the matter.

No court claims have been filed by anyone; I have not filed against the credit card company concerning the section 75 claim.

Good.

Just keep in mind that, while tussling with CC firm & FO, AI are ticking away in the background.

[R0b]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

I am not surprised that the CC Co. are relying on the fact that the Programme spans two years and therefore exceeds the limit under section 75. However, emphasis should be on the meaning of "single item" under s.75:

so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000

Now, I don't actually think the meaning of single item has been tested in the courts, although the Ombudsman appears to have on their website but in a different context. I don't think it is disputed that the agreement spans two years, however it is the payment terms which is what should be focused on.

The payments have been split into two invoices i.e. Year 1 and Year 2 which are to be paid separately and not as one large invoice. Therefore the argument is that by paying the Year 1 invoice which costs X, this is a "single item" in which the institution has attached a cash price between £100 and £30,000. In order for the claim to fall outside of s.75 the invoice would have needed to exceed £30,000 but it doesn't.

Ultimately, the wording of s.75 doesn't specify exceeding the total amount of the agreement but a single item. In the context of services, it would be sensible to say that each separate invoice would be deemed as a single item for the purposes of s.75.

As for the 1st contract and 2nd contract being for Years 1 &2, that would be stretching it if they are almost identical and do not specifically state the contract is for each separate year.

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Whereabouts is this issue on the 'litigation route'?

Have you received a letter before claim/action from AI? (or anything else?)

Could I argue that the FIRST contract (not CCA exemption complaint) relates to the 1st year only; and the SECOND contract (CCA compliant) relates to the 2nd year only?

It is worth me re-stating that there are TWO separate invoices; one for a 1st academic year and one for the 2nd academic year. There are also TWO separate contracts (the FIRST contract and the SECOND contract).

I also have written confirmation from the AI previously that: "Your invoice is correct. All invoices are raised showing the total programme fee, and instalment due dates.".

Each of the TWO separate invoices shows a total fee of c. £28k on it; there are no written references to a larger single amount of c. £58k (and the sales brochure nor the contracts have a price written in it)

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Thanks charitynjw. Litigation in what sense?

The AI did attempt a DCA with some correspondence last year in relation to the fees for the second year; but after I underscored the disputed, they backed down and dropped the matter.

No court claims have been filed by anyone; I have not filed against the credit card company concerning the section 75 claim.

[charitynjw]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Whereabouts is this issue on the 'litigation route'?

Have you received a letter before claim/action from AI? (or anything else?)

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

So any further advice is most welcome. The s. 75 contact has a meeting with legal counsel at 2pm today; and I am invited to provide him before them with any more arguments / information I can that may help to "change their mind" on this. Otherwise, the direction is a formal written response from the s. 75 team to reject the claim.

Note the sticking point for now is entirely the SINGLE ITEM criteria; we haven't even got to the actual point of the misrepresentation yet!

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Hi dossier

This first & second contract issue seems most strange.

Why, having signed the initial one to start the course, did you have to sign a second one? (Did AI give a reason?)

Also (& for the moment not going into detail) firms cannot opt out of, or contract out of, the CCA 1974.
If the agreement looks & waddles like a duck, it probably is one.

If you feel you are being given the run-around by the s75 team, a complaint to the head honcho often works wonders.

Re "Why, having signed the initial one to start the course, did you have to sign a second one? (Did AI give a reason?)":

- No reason was given; during "induction" everyone was put in a room and told they needed to sign a revised contract (arguably under coercion / duress!)
- Three possible reasons I speculate in hindsight: (1) The FIRST contract was entered into by distance contract, (2) The SECOND contract was entered into on site (3) The difference between the SECOND and FIRST appears to be mostly updating it to be complaint in payment structure with the CCA 1974 payment exemption (the FIRST contract looks much less compliant with the payment exemption requirements of the CCA 1974).

About the s. 75 credit card team handling: actually they are being pretty sensible and have clearly spoken to legal counsel internally. Their rejection of the s. 75 claim appears to be grounded on their position it is a PROGRAMME and has fees above £30k. I will be told later this week whether, in light of the conversation today, this has changed any of their views. Otherwise, I will have a formal refusal letter, and presumably can then submit a complaint, do the complaints process, and go to the FOS. [I should stress I would rather not have this go to the FOS, as I am sure the FOS will find a way to dismiss the claim!]

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Hi dossier

This first & second contract issue seems most strange.

Why, having signed the initial one to start the course, did you have to sign a second one? (Did AI give a reason?)

Also (& for the moment not going into detail) firms cannot opt out of, or contract out of, the CCA 1974.
If the agreement looks & waddles like a duck, it probably is one.

If you feel you are being given the run-around by the s75 team, a complaint to the head honcho often works wonders.

Thank you. I literally just got off the phone after half an hour to the s. 75 credit card team to discuss the claim: the response from their general counsel is that the claim does NOT fit the criteria of s. 75 CCA 1974, as the contract is for a "Programme" and the "Programme" is for 24 months and has fees of c. £58k, which is outside of the £100 - £30k criteria. I am also getting comments such as:

- If you have more information (new evidence) at a later date, we can certainly look at this again
- There is no statutory time frame on a s. 75 claim
- I'm drafting a refusal letter that you should have later this week
- You purchased a "Programme" for 24 months in a single contract; with total fees of c. £58k, so well outside [stress is on a PROGRAMME and stress on 24 months]
- Our legal counsel disagree with the FOS' interpretation that it is two separate academic years / two single items that cost < £30k
- I know you've already taken this to the FOS' on the CCA 1974 exemption issue, but if this goes back to the FOS again the FOS may change their view (our legal counsel would argue it is a "Programme" that was purchased, and that purchase was c. £58k price; so not within s.75)
- If you have a separate second contract for the second year; i.e. one signed in the second year, then please give this to us and we can consider this [there is definitely no second year contract] [I did point out there were two contracts signed - a FIRST contract and a SECOND contract, but their position is that the SECOND is just a revision to the FIRST contract]

My s. 75 credit card contact is going to discuss this again today in his conference call with legal counsel, but it looks like they are heading down a formal refusal letter, rejecting the s. 75 claim on the grounds above.

I have put the arguments below to them, but they appear keen to try to refuse this claim (perhaps unsurprisingly! - they admit this claim is "high on their discussion agenda" because of the size of the amount involved):

- It's two separate invoices for two separate years, which are separate "single items"
- I've taken the T&Cs and the invoices to the FOS, and the FOS say the T&Cs themselves are not CCA 1974 regulated agreements, due to being two separate agreements, two invoices, and two separate years (i.e. it fits the CCA 1974 payment exemption)
- I've highlighted the T&Cs on cancellation which clearly show that one could buy "one year" or "two years"
- I've mentioned the FOS precedent cases: there are many cases where someone buys a "set of items" which is above £100, but the individual items are below £100, and the FOS rules the invoice shows "single items" below £100. The same mechanism works in this claim, except it puts this claim WITHIN the £100 - £30,000 criteria.

[charitynjw]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Hi charitynjw / R0b: I was wondering if you had any thoughts on the above? Also, the s. 75 credit card team are dodging my calls and seem to be trying to drag this out. Is there anything I could do to press them? A county court claim? Or press columnist coverage?

Thanks

Hi dossier

This first & second contract issue seems most strange.

Why, having signed the initial one to start the course, did you have to sign a second one? (Did AI give a reason?)

Also (& for the moment not going into detail) firms cannot opt out of, or contract out of, the CCA 1974.
If the agreement looks & waddles like a duck, it probably is one.

If you feel you are being given the run-around by the s75 team, a complaint to the head honcho often works wonders.

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

I note from past FOS judgements that "Section 75 does not, in itself, provide grounds for a claim against a supplier. Customers must have a valid claim of breach of contract or misrepresentation under other law, such as the Sale of Goods Act or the Misrepresentation Act. If they do, then they have a like claim against the card provider for the full amount of the claim".

The Misrepresentation Act 1967: http://www.legislation.gov.uk/ukpga/...9670007_en.pdf

- - - Updated - - -

I'll try take a look later today, they would have up to 8 weeks as per the usual complaints procedure to get back to you if not I would go to the Ombudsman. Perhaps an email to that effect might hep so they are on notice. However, in reality if they have referred it to their in house legal team I suspect they will be reviewing it and isn't going to be something straightforward or they may be seeking external legal advice on the matter.

How long has it been so far since your s.75 application?

Thanks. the s. 75 Claim has been with them for 3 weeks, and has been with General Counsel for 1 week now. I do appreciate this will take more time, but they are still at the stage where they are considering whether it fits within s. 75. The next step is for them to contact the AI about the misrepresentation, and that could easily drag on for a month in itself; hence I was keen to get the ball rolling.

Also, in terms of making a claim under Section 75 of the CCA 1974: does the misrepresentation have to be a misrepresentation under the Misrepresentation act 1967, or can it be any claim (for instance under The Consumer Protection from Unfair Trading Regulations 2008)? For a valid claim under Section 75 of the Consumer Credit Act 1974, does it have to be under the Misrepresentation Act 1967 or can it be under the Consumer Protection from Unfair Trading Regulations 2008?
Thanks



Thank you

[R0b]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

I'll try take a look later today, they would have up to 8 weeks as per the usual complaints procedure to get back to you if not I would go to the Ombudsman. Perhaps an email to that effect might hep so they are on notice. However, in reality if they have referred it to their in house legal team I suspect they will be reviewing it and isn't going to be something straightforward or they may be seeking external legal advice on the matter.

How long has it been so far since your s.75 application?

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

Hi charitynjw / R0b: I was wondering if you had any thoughts on the above? Also, the s. 75 credit card team are dodging my calls and seem to be trying to drag this out. Is there anything I could do to press them? A county court claim? Or press columnist coverage?

Thanks

[dossier]

Re: Section 75 Claim - Consumer Credit Act 1974 (as amended)

charitynjw / R0b: Another key question I have is whether the FIRST and SECOND contract help in any way?

The FIRST contract was entered into by distance selling regulations (as by post). The SECOND contract was entered into onsite (with no choice in a "here, sign this" situation).

The key difference between the FIRST and the SECOND contract is that the SECOND contract has been amended to make sure that it is compliant (or more compliant) with the payment exemption terms under the CCA 1974 (i.e. so as to not fall foul of the CCA 1974). The FIRST contract is much less clear, and more arguably in breach of the CCA 1974 exemption and is therefore not compliant (i.e. actually a regulated agreement by accident).

The s.75 credit card team have even asked me if I can produce separate contracts for the two separate years of the academic programme: is there any way to spin the FIRST and SECOND contracts as representing separate years?

In my mind, it was simply that the SECOND contract is a replacement of the FIRST contract (although goggling does not seem to provide clear answers about what happens when you have a contract replacing a previous contract).

I have copies of both the executed FIRST and SECOND contract and have provided the s. 75 credit card team with these.

I am trying to chase the s. 75 credit card team over the phone, but I can tell they are trying to avoid talking to me!

I welcome any advice you can give at this stage of the process: it is in the stages with the s. 75 team where they are considering / reconsidering whether the claim fits within section 75 of the CCA 1974, before proceeding to the point where they would write to the AI.