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

[dossier]

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

Under the The Consumer Protection from Unfair Trading Regulations 2008, it defines a Misleading omissions as below. Is a Misleading Omission (under the CPUTRP 2008) a misrepresentation under the Misrepresentation Act 1967? [apologies for the formatting!]

http://www.legislation.gov.uk/ukdsi/...4/regulation/6

http://www.legislation.gov.uk/ukpga/1967/7

Misleading omissions

6.—(1) A commercial practice is a misleading omission if, in its factual context, taking account of the matters in paragraph (2)—
(a)
the commercial practice omits material information,
.
(b)
the commercial practice hides material information,
.
(c)
the commercial practice provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or
.
(d)
the commercial practice fails to identify its commercial intent, unless this is already apparent from the context,
.
and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.
(2) The matters referred to in paragraph (1) are—
(a)
all the features and circumstances of the commercial practice;
.
(b)
the limitations of the medium used to communicate the commercial practice (including limitations of space or time); and
.
(c)
where the medium used to communicate the commercial practice imposes limitations of space or time, any measures taken by the trader to make the information available to consumers by other means.
.
(3) In paragraph (1) “material information” means—
(a)
the information which the average consumer needs, according to the context, to take an informed transactional decision; and
.
(b)
any information requirement which applies in relation to a commercial communication as a result of a Community obligation.
.
(4) Where a commercial practice is an invitation to purchase, the following information will be material if not already apparent from the context in addition to any other information which is material information under paragraph (3)—
(a)
the main characteristics of the product, to the extent appropriate to the medium by which the invitation to purchase is communicated and the product;
.
(b)
the identity of the trader, such as his trading name, and the identity of any other trader on whose behalf the trader is acting;
.
(c)
the geographical address of the trader and the geographical address of any other trader on whose behalf the trader is acting;
.
(d)
either—
.
(i)
the price, including any taxes; or
.
(ii)
where the nature of the product is such that the price cannot reasonably be calculated in advance, the manner in which the price is calculated;
.
(e)
where appropriate, either—
.
(i)
all additional freight, delivery or postal charges; or
.
(ii)
where such charges cannot reasonably be calculated in advance, the fact that such charges may be payable;
.
(f)
the following matters where they depart from the requirements of professional diligence—
.
(i)
arrangements for payment,
.
(ii)
arrangements for delivery,
.
(iii)
arrangements for performance,
.
(iv)
complaint handling policy;
.
(g)
for products and transactions involving a right of withdrawal or cancellation, the existence of such a right.

[dossier]

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

Here is the First signed T&Cs (redacted), which was signed before the Second T&Cs (posted previously):

[ACADEMIC INSTITUTION ADDRESS]
Tel: [ACADEMIC INSTITUTION TELEPHONE]
Fax: [ACADEMIC INSTITUTION FAX]

[ACADEMIC INSTITUTION URL]

A Graduate School
of the University of [REDACTED]

[ACADEMIC INSTITUTION] - General Terms and Conditions for Degree Programmes

I confirm that I have read and agree these Terms and Conditions:

Student’s signature:

Student’s name in block capitals:

Date signed:

Class:

Definitions

1. In these Terms and Conditions:

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London;

“Faculty” means the academic and teaching staff of the School;

“Default Rate” means an annual rate of seven per cent (7%) above the base rate from time to time of HSBC Bank plc;

“the Programme” means the course at the School which the School has offered the Student a place upon; and

“the School” [ACADEMIC INSTITUTION] (a company incorporated by Royal Charter with registered number [REDACTED]).

Conditional Offers

2. If conditions are attached to the School’s offer of a place on the Programme (e.g. improved GMAT score, improved English language, compulsory attendance on stipulated pre-programme courses) the Student’s right to participate on the Programme is conditional upon the condition(s) being satisfied by the deadlines specified by the School in the offer letter.

Amendments to the Programme

3. The School will make all reasonable efforts to deliver the Programme as described in the brochure and on the School’s website. However, the School must manage its resources efficiently and shall be entitled:

(a) to alter the timetable, location, number of classes and method of delivery of the Programme; and

b) to make reasonable variations to the content and syllabus of the Programme.

4. The School will make available to the Student such learning support, IT and other facilities it considers appropriate, but may vary what it provides from time to time provided such variations are reasonable.

The Student’s Obligations

5. The Student is personally responsible to the School for the payment of all fees due in respect of the Programme, irrespective of whether any third party has agreed to sponsor him/her. The Student shall remain liable to the School even if a sponsor defaults.

6. The Student must:

(a) at all times behave with honesty and integrity and show courtesy, consideration and respect for others;

(b) attend all compulsory classes, lectures, tutorials, examinations and other activities which form part of the Programme (subject to absence for medical or other agreed reasons) and participate fully in group work where required;

(c) submit course work and other assignments required for the Programme by the deadlines specified by the School (subject to exceptional circumstances such as illness);

(d) achieve the academic standards required for the Programme by the School;

(e) telephone or email their Programme Office if they become ill or suffer an injury that is likely to cause them to be absent from the School for more than five days and (if requested to do so by their Programme Office) provide a doctor’s certificate in respect of any such absence from the Programme;

(f) be adequately prepared for any activity that the Student is required to undertake as part of the Programme outside the School;

(g) conduct all assessed work individually and without collaboration (except where a member of Faculty has given explicit instructions that group co-operation is expected);

(h) conduct all assessed group work in a fully collaborative way with each group member making a contribution;

(i) ensure that he/she understands all instructions given to him/her for assessed work;

(j) fully acknowledge the use of material referred to or copied from other sources and comply with the provisions of the Copyright, Designs and Patents Act 1988;

(k) refrain from discussing assessed work with students or alumni who have previously undertaken similar work (unless directed by a member of Faculty to do so);

(l) notify the School if he/she believes that another student has broken the School’s examination and assessment regulations;

(m) abide by any special conditions relating to the Programme set out in the brochure or otherwise notified to the Student by the School;

(n) provide the Student’s Programme Office with the contact details of a person whom the School may contact in the event of an emergency;

(o) notify the Student’s Programme Office of any change to the information which the Student submitted on application or enrolment (e.g. UK address);

(p) ensure that all information he/she provides to the School’s Careers Services department is true, accurate and not misleading;

(q) respect the confidentiality of all confidential information that the Student acquires during the course of his/her participation in the Programme; and

(r) comply with all other relevant rules and regulations of the School, as amended from time to time (including: (i) the School’s student disciplinary rules; (ii) the examination and assessment regulations relating to the Programme; (iii) the School’s rules relating to the use of Portal and its other IT facilities and equipment; and (iv) [ACADEMIC INSTITUTION] Career Services Code of Conduct for Students and any code of conduct that is issued by [ACADEMIC INSTITUTION] Student Association.

Deferral

7. The Student does not have a contractual right to defer from the Programme to a later programme. Any deferrals are entirely at the School’s discretion. In any event the School does not ordinarily allow a student to defer to a programme that commences more than a year after the programme on which he/she was originally placed.

Consequences of Late Payment

8. If the Student fails to pay any sum payable to the School in connection with the Programme on the due date for payment, the School may charge interest at the Default Rate on the amount from time to time outstanding until payment is made in full. The interest payable in respect of any calendar month (or any part thereof) shall be calculated by reference to the Default Rate on the last Business Day of that calendar month. Any interest payable by the Student pursuant to this paragraph shall be payable within five Business Days after the School’s written demand.

9. If the Student fails to pay any sum owing to the School in connection with the Programme within four weeks after the due date for payment, the School may:

(a) suspend the Student from participation in field trips, vacation placements, exchange programmes and other similar activities;

(b) suspend the Student from participation in any further lectures, seminars or other teaching sessions;

(c) exclude the Student from access to the School’s premises and/or use of any of its facilities; and/or

(d) withhold confirmation of the Student’s degree or final transcript.

(Note: See also paragraph 11(a) below).

10. The School provides benefits and services (including the giving of references to potential employers) to its alumni community on a discretionary basis. No alumnus has a contractual right to these benefits and services. The Student should note, however, that it is the School’s policy to withhold alumni benefits from alumni who have failed to pay the School all the fees due in respect of their programme or defaulted on any loan arrangement relating to programme fees.

Termination by the School

11. The School may terminate the Student’s participation in the Programme by giving the Student immediate notice in writing if:

(a) any sum owing by the Student to the School in connection with the Programme is not paid within four weeks after the due date for payment; or

(b) the Student commits a serious breach of these Terms and Conditions or any of the other rules and regulations of the School; or

(c) the Student behaves in a manner that, in the opinion of the Dean, is prejudicial to the interests of the School.

Termination by the Student

12. The Student may terminate his/her participation in the Programme by giving the School written notice of termination not less than four weeks before the date on which the Programme commences. In these circumstances the Student shall not be liable to pay the School any sum other than those sums which have already fallen due for payment (e.g. reservation, commitment and first fee instalment/first term fees).

13. The Student may terminate his/her participation in the Programme by giving the School written notice of termination at any time after the commencement of the four week period referred to in the preceding paragraph (paragraph 12) but in these circumstances the Student shall remain liable to pay the School all of the fees payable in respect of the Programme.

14. For the purposes of paragraphs 12 and 13 above, the Programme shall be deemed to commence on the first day of scheduled teaching for the Student.

Effect of Termination

15. When either party terminates the Student’s participation on the Programme:

(a) the School shall be entitled to require the Student to stop studying on the Programme and to leave the School’s premises immediately; and

(b) the Student shall immediately return to the School the identification/swipe card issued to the Student on enrolment and all other property in the Student’s possession, custody or control that belongs to the School.

Disclaimer

16. The School cannot accept responsibility and expressly excludes liability for any loss or damage to the Student’s property and belongings that occurs whilst the Student is on the Programme. The Student should take particular care not to leave mobile phones or laptops unattended at any time.

Governing Law and Jurisdiction

17. The contract made between the School and the Student in relation to the Programme, of which these terms and conditions form part, (“the Agreement”) will be governed by English law and the parties submit for all purposes connected with the Agreement to the exclusive jurisdiction of the English Courts.

Third Parties

18. The School and the Student agree that the Contracts (Rights of Third Parties) Act 1999 shall not apply to the Agreement.

Notices

19. Any demand or notice to be served upon the Student may be served upon the Student personally or sent by post to the place last known to the School as the Student’s home address in England. Any demand or notice to be served upon the School shall be delivered by hand or sent by post to the Programme Director at the School. Any demand or notice delivered personally shall be deemed to have been received immediately upon delivery. Any demand or notice sent by post shall be deemed to have been received at the opening of business on the first Business Day following the day on which it was posted, unless sent by international mail in which it event it shall be deemed to have been received at the opening of business on the third Business Day following the day on which it was posted.

Information provided by Student

20. The Student warrants to the School that all information that he/she has provided to the School during the course of his/her application to join the Programme is accurate and not misleading.

Data Protection

21. The Student acknowledges that the School is registered as a data controller under the Data Protection Act 1998 and that data about students and alumni (“Personal Data”) may be processed by the School for the following purposes: student and alumni administration, education services, accounting, record-keeping, directory publication, fundraising, databank administration, the promotion of students and alumni to prospective employers, the provision of references to actual or prospective employers and other career services, health and safety and any other reasonable purpose relating to the School’s relationship with its students and alumni. The Student consents to the processing by the School of personal data relating to the Student for all of the aforementioned purposes.

[dossier]

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

Hi dossier

If the FOS decide that it is non-regulated due to it being 2 discrete years, 3 payments per year, surely this will hand you your s75 argument on a plate?
@R0b..........what do you reckon?

Thanks for this charitynjw. I have been through all the FOS final decision cases relating to "single items", and the bulk of them are situations where someone has ordered several items (arguably a set) which is over £100 in total, but where all or many of the individual items are below £100. In most of these cases, the credit card team have argued that it is below £100 for a s. 75 and the FOS has agreed. Only two exceptions are where the complaint was about some car work service (even though the individual parts were below £100) and for petrol (priced per litre, where the credit card company argued it was unleaded petrol per litre, but the FOS accepted the claim and agreed it was the total amount).

In this instance, I claimed the T&Cs are a CCA 1974 regulated agreement, as it does not meet the payment exemption requirements. The FOS argue it does meet the payment exemption requirements, as there are two separate agreements for payment and therefore it is not regulated by the CCA 1974.

To make matters even more complicated: there are actually two executed contracts: one signed upon offer of admission (at acceptance) and one signed after acceptance of admission (but technically before the start) of the programme. I.e.. There is a "First Contract" and a "Second Contract". The T&Cs posted previously here in this thread and all discussions to date pertain to the "Second Contract", as I assumed that the "Second Contract" was designed to replace / supersede the "First Contract", although there was actually no explicit side-letter or discussion about this being the case. There are some small, but significant differences between the "First Contract" and the "Second Contract".

The "First Contract":

- refers to a much higher penalty default rate
- has no reference to structuring payments in a way that complies with the CCA 1974 payment exemption
- makes no reference to academic years and makes no distinction to termination in the 1st vs 2nd year after the start

I will post the redacted First Contract below, but had assumed the First Contract was simply superseded by the second contract. However, I am now starting to wonder whether the fact that TWO contracts existed helps to claim that each one relates to a different "single item academic year" and therefore we now have TWO contracts, TWO invoices and TWO years!

The FIRST contract is not CCA 1974 exemption compliant.
The SECOND contract is CCA 1974 exemption complaint, if treated as TWO separate academic years.

I expect the AI asked for a signed SECOND contract to replace the FIRST contract, due to the clear lack of compliance of the FIRST contract with the CCA 1974 payment exemption requirements.

[dossier]

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

Thank you for all of this. Let me go back to the s. 75 CC team and make further arguments about the "single item" point. Their initial position is to say it is a "Programme" and the "Programme" costs well over £30k, so does not qualify under the CCA 1974 s. 75.

Interestingly, I have an old e-mail from the AI, in response to a query I made about the first invoice, where the response was: "Your invoice is correct. All invoices are raised showing the total programme fee, and instalment due dates.". This relates to an invoice for the first year fees of less than £30k.

[R0b]

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

Not so sure it could be that straightforward, it's giving me a headache already and I have only thought about it for 5 minutes lol!

@charitynjw I did think that but I might have to re read the whole thread to try and understand it again.

S.75 allows for breach of contract or misrepresentation. If the FOS decides that the agreement is not regulated then it can only mean that each academic year is a separate agreement as the exemption can only apply if it is a fixed credit agreement and those payments are made 4 or less in 12 months.

If the FOS decides that it is a regulated agreement, then it might make things a bit more interesting. There will be a clear misrepresentation at that point because the school is basing the contract as if it is exempt from the CCA and it also does not have a licence to enter into regulated agreements. The question then arises, could you bring a further complaint against the school for misrepresentation and/or your initial complaint? Secondly, as a result of the misrep, does this still give rise to a right of claim against Amex and entitle you to claim the sums you have paid to date e.g. being the first year only (if i recall you did not complete the second year and so you did not pay the fees) which comes in under the £30k mark.

Or can Amex rely on the fact that the Programme is considered an agreement over two years in which the total value of the contract is more than £30k and despite you only paying and claiming for one year, cannot be entitled to the sums paid as it falls outside of the scope of s.75.

I'll reserve the right to change the above as your matter isn't so straight forward as many s.75 claims.

As for the evidence, it would be difficult to add to anything much more than the facts and circumstances around your case. It seems quite unique and the only way I see you pulling further evidence is from case law. There are a few cases which have gone right to the House of Lords such as OFT v Lloyds TSB in 2007 but that related to connected lender liability and overseas credit card payments as well as payments. You would have to read through their decisions and connected cases as to whether there is any comment or reference to 'single item'.

You could make reference to the FOS initial decision that they consider the agreement to be two separate ones and therefore that would give rise to the claim. That is of course if you have not mentioned this already.

[charitynjw]

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

Hi dossier

If the FOS decide that it is non-regulated due to it being 2 discrete years, 3 payments per year, surely this will hand you your s75 argument on a plate?
[MENTION=71570]R0b[/MENTION]..........what do you reckon?

[dossier]

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

Given the fact that we are not talking about a small sum of money here, be expected for them to resist in some way. Highly unlikely a bank is going to keel over and just accept your argument, they might rely on the fact it is one agreement and not two but that remains to be seen.

Can you explain to me of this single item argument, are you referring in other words the agreement not exceeding £30k? Overall it depends on the interpretation as they will more likely conflict.

As Charity has said, paragraph 15 appears to indicate that there are only two years instead of one. Just because the agreement refers to "Programme" does not mean much its what the terms of the contract says.

It will simply come down to whether or not the agreement is one or two

R0b: thanks for this. Yes, I am fully expecting the credit card s. 75 team to "push back" as much as they can on this, as clearly the amounts involved are substantial. Having spoken to them over the phone, they have certainly been polite and accessible. Their preliminary issue at present is that the prima facie case in their eyes is the 'Programme' costs well in excess of £30k, and therefore is outside of the £100 - £30k criteria for a s. 75 claim. However, they have referred it to their internal general counsel for closer review. I am also invited to provide anything further that I can to convince them otherwise.

So at this point, I am at the stage where I have agreed to also provide them as much "evidence" as possible to convince them that each 'Academic Year' should be treated as the "single item", not the entire programme. As discussed before, looking at it in terms of a single academic year puts it within £100 - £30k (as each academic year was priced at £28.7k).

I have been through some of the FOS precedents, but is there any compelling "single item" reference material I can give them?

[R0b]

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

Given the fact that we are not talking about a small sum of money here, be expected for them to resist in some way. Highly unlikely a bank is going to keel over and just accept your argument, they might rely on the fact it is one agreement and not two but that remains to be seen.

Can you explain to me of this single item argument, are you referring in other words the agreement not exceeding £30k? Overall it depends on the interpretation as they will more likely conflict.

As Charity has said, paragraph 15 appears to indicate that there are only two years instead of one. Just because the agreement refers to "Programme" does not mean much its what the terms of the contract says.

It will simply come down to whether or not the agreement is one or two

[dossier]

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

Hi dossier (I was very careful to insert the 'i' there.......I certainly wouldn't want to be accused of stereotyping students, lol!)

The first thing that comes to mind is that they should be regulated by the FCA.

But let's not stray too far down this path without further input.
@Amethyst & @R0b ....................any thoughts? (I still think, based on para 15 of the T&Cs, that there are 2 discrete years)

Thanks - I welcome any more arguments you have on the "single item" point; I have raised it with the Section 75 credit card team and they are now trying to get their head around the single item point as well; their first thought is it is a "Programme" and it costs more than £30k, so it is not a s. 75 valid claim.

[dossier]

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

Thanks R0b - the FOS have confirmed this complaint does not bar me from a complaint in future about the credit card company for the same transaction.

Also, the credit card company has confirmed they have referred my section 75 to their legal team for investigation, as they are not sure it falls within the scope of s 75 (on the grounds that it is above £30k for a "Programme"); I have pointed them to the FOS guidance and my arguments about "single item", but do you have any recommendations on other material I can give them to help convince / persuade them?

My claim is for the 1st academic year and consequential loss.

[dossier]

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

I am not sure it would be barred, the bank failing to pay under s.75 is a separate issue of asking the FOS to provide their view as to whether the contract is regulated or not.

Thanks R0b. If I am asked by the credit card s. 75 team to get an independent report to prove the misrepresentation by the AI, how do I do that?

Many thanks

[dossier]

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

I am not sure it would be barred, the bank failing to pay under s.75 is a separate issue of asking the FOS to provide their view as to whether the contract is regulated or not.

R0b - I have asked the FOS Investigator to confirm this, although they are now on holiday. I will see what the FOS confirm. If the FOS position is that it does bar a s. 75 complaint to the FOS concerning the credit card issuer, then I will have to freeze or cancel the existing complaint concerning the AI in order to prevent that from happening.

Are you also familiar with the usual tactics concerning a s. 75 claim with the card company? I have submitted the documentation and they have tried to call me.

[R0b]

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

I am not sure it would be barred, the bank failing to pay under s.75 is a separate issue of asking the FOS to provide their view as to whether the contract is regulated or not.

[dossier]

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

Yes that's right dossier, I can't foresee anything which you might regret if you are seeking to rely on s.75 no but it was something I meant to say in passing so you are aware

I am concerned that getting the FOS to look at the underlying transaction (with the AI) may cause problems in taking the credit card company to the FOS (concerning the underlying transaction), as this may be barred?

[dossier]

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

R0b: on another forum, on section 75, a comment below was:

"
Rottidog, BATH, United Kingdom, about a year ago

After over a year of battling on all available consumer fronts to get redress for a car declared unfit for purpose and dangerous to drive due to excessive water ingress we took out a Section 75 with HSBC as part of the transaction was on the credit card. 14 months later they have turned it down as they were "unable to claim the money from the retailer" and yet they are jointly liable! They have referred me to the FO or courts. As I have already gone down the FO route with the finance company who were also part of the transaction and failed, I am unable to take HSBC to the FO even as a separate company as it is for the same transaction. Their advice now is to take HSBC to court as they have sidestepped their responsibility."

Does the same problem apply here? That once the FOS has looked at the T&Cs, I cannot take an Amex s 75 back to the FOS concerning the same product