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

[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

Thanks. I have submitted a s. 75 claim to American Express and will keep you posted.

[dossier]

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

Under the Consumer Protection (Distance Selling) Regulations 2000, which is relevant to the T&Cs with the AI (as it was concluded before the revised legislation effective from 2014 onwards):

"Cancellation period in the case of contracts for the supply of services

12.—(1) For the purposes of regulation 10, the cancellation period in the case of contracts for
the supply of services begins with the day on which the contract is concluded and ends as
provided in paragraphs (2) to (4).
(2) Where the supplier complies with regulation 8 on or before the day on which the contract
is concluded, the cancellation period ends on the expiry of the period of seven working days
beginning with the day after the day on which the contract is concluded.
(3) Where a supplier who has not complied with regulation 8 on or before the day on which the
contract is concluded provides to the consumer the information referred to in regulation 8(2) and
(3), and does so in writing or in another durable medium available and accessible to the
consumer, within the period of three months beginning with the day after the day on which the
contract is concluded, the cancellation period ends on the expiry of the period of seven working
days beginning with the day after the day on which the consumer receives the information.
(4) Where neither paragraph (2) nor (3) applies, the cancellation period ends on the expiry of
the period of three months and seven working days beginning with the day after the day on which
the contract is concluded."

The AI never provided any information on cancellation. The T&Cs also never mention "cancellation". The closest in the T&C is some language about "termination":

"Termination by the Student

14. 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 and commitment fees)."
However, this appears to be directly in violation / non-compliance with The Consumer Protection (Distance Selling)Regulations 2000, which states that:

"Where neither paragraph (2) nor (3) applies, the cancellation period ends on the expiry of
the period of three months and seven working days beginning with the day after the day on which
the contract is concluded."

Under the Consumer Protection (Distance Selling) Regulations 2000, a full refund during the cancellation period is available by law.
However, the AI's clause 14 above states that 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 and commitment fees).", i.e. the Student would lose approximately £7,000 paid through reservation / commitment fees upfront.

I presume the Consumer Protection (Distance Selling) Regulations 2000 makes Clause 14 unlawful?

[R0b]

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

[dossier]

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

Thank you R0b. But as far as I can tell the FOS Ombudsman final decision would only be a legally binding judgement that the T&Cs contract is not a CCA1974 regulated agreement. Other than that, I am not sure what else would be legally binding.

I also am not sure I see any harm in having validation that the T&Cs are not a CCA 1974 agreement?

Can you see any scenarios where I might regret this and wish it were not?

[R0b]

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

That would make sense yes if you are going to rely on s.75, the downside to accepting the Ombudsman's decision is that you are legally bound, you can't enforce something else or take it to the courts (well you could try but if the other side picks up the relevant sections and says its legally binding then you are buggered) so make sure it is the correct route you wish to take, assuming you want to rely on s.75 I think it is the only step.

As for the timescales, it can vary but I have heard it can tae up to 6 weeks depending on the nature and complexity of issues.

[dossier]

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

You would have to prove a compelling argument for the misrepresentation first to award a decision in your favour.

Secondly, the FOS are not bound I believe but they like to try and keep things consistent so unless there was a real good reason why they should depart from an earlier decision then they will probably agree with it. I would not be surprised if AMEX do in fact use the argument about being 2 years. Best in mind the FOS are not legally trained generally so the more complex the argument the harder it is to follow and will probably opt for the easier decision.

If the decision is awarded in your favour and you accept both parties are bound legally - If AMEX refuse to pay out then it's a simply formality to go to court and get an order, no trial just procedural application and then you can enforce as if it was a court decision and the usual recovery options will apply.

Hi R0b: Thanks for this. Just about your second point: according to http://www.ombudsman-decisions.org.u...l_decision.pdf , "Final Decisions" accepted by the consumer of the FOS Ombudsman are "legally binding".

Currently, the FOS Ombudsman is, following the preliminary FOS Adjudicator review, considering whether the T&Cs are a regulated agreement under the CCA1974, or are exempt. The FOS Adjudicator is of the view that that the agreement is CCA1974 exempt, on the grounds of the payment exemption.

If the FOS Ombudsman soon provides a "Final Decision" that the T&Cs are *not* CCA 1974 regulated, because of the payment exemption on the grounds that the T&Cs are two separate years and two separate invoices, I presume it is sensible for me to accept the FOS Ombudsman Final Decision so that this is legally binding? Is there any downside to this?

Thanks

[dossier]

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

Here's fine.

What's the basis for the claim?

Thanks EXC. It is a claim for "misrepresentation by misleading omission" by the AI; I would not have proceeded with the purchase of the service, if I had been provided with the full details of the content (as I had repeatedly requested to the AI before and after entering into the contract), and therefore had to rely upon the representation by the AI of the content. I substantially relied upon this representation and would not otherwise have gone ahead with the purchase of the service if I knew the full details of the content.

The Competition & Markets Authority have also published extensive guidance recently, following a thematic review undertaken in 2014: https://www.gov.uk/government/upload...nsumer_law.pdf

The general guidance for s. 75 misrepresentation from the FOS is:

"For there to be misrepresentation:
- someone must make a false representation that must be false at the time of the transaction, and remain false
- the misrepresentation is "material to the transaction", which means it must be about an important element of the transaction at hand;
- the other party must substantially rely on the misrepresentation, meaning if the other party knew the true position, they would not go through with the transaction. If the buyer, for instance, would have bought the item regardless of what was said about it, the misrepresentation may not count. They must substantially rely on the falsehood."

[dossier]

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

Thanks R0b. Do you know how long it will take the FOS Ombudsman to investigate this now that it has been referred to them by the FOS Investigator?

[dossier]

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

What will the FOS Investigator now do, now that the complaint has been referred to them?

[dossier]

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

Could I start to test out the grounds for the misrepresentation for the s. 75 claim here? Thanks all!

[dossier]

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

The FOS investigator has referred the case to the Ombudsman for closer examination.

[dossier]

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

I would take the FOs's initial decision as strong support yes, and then you forward that to AMEX and go from there, and then follow the complaints procedure back through to the FOS.

Hi R0b. Thank you for this. I have very little confidence in the FOS, as can be seen from the feedback on https://www.trustpilot.com/review/ww...budsman.org.uk and http://www.financial-ombudsman-problems.co.uk/

In this instance, we have a preliminary FOS "victory" of sorts because the FOS is attempting to dismiss the complaint I put to them about the T&Cs being CCA 1974 regulated, which ironically is precisely what we wanted (but the exact opposite of the prima facie case I have put to the FOS Ombudsman, which appears as a complaint against the AI to the FOS, where the FOS argue it is outside of their jurisdiction because it is not CCA 1974 regulated, and so the FOS want to close the case as quickly as possible), but underscores the likelihood of the FOS doing the exact opposite of whatever the consumer actually wants! (which we have played well - bravo!).

However, in the case of a s. 75 claim with Amex: I would prefer to put the strongest case possible to Amex to convince them to agree with the s. 75 claim and avoid the need to take the s. 75 claim against Amex to the FOS (i.e. hit Amex with everything possible at the start, to convince them to not contest it); I am confident that any such Amex complaint raised to the FOS would not likely go in my favour (i.e. it is game over if I have to take the s.75 Amex claim to the FOS as a complaint, as the FOS are highly likely to decide that: (a) There is no misrepresentation or (b) Actually "single item" is the entire 2 year programme, not each year, even with the prior Ombudsman decision about each year being separate for CCA 1974 purposes, and it therefore falls outside the £100 - £30k scope of Section 75)!

My apologies if I sound highly cynical about the FOS, but the mountain of evidence based on other people's feedback of FOS dealings does not add confidence that the FOS will assist the "consumer"!

Also from a legal note about the FOS: "In addition the FOS is not bound by its own decisions. Although it aims for consistency in the way it deals with particular types of complaints it will rarely, if ever, mention in one case the outcome of another." - so there is a chance that the T&Cs are two separate contracts for the purposes of the CCA 1974, but one "single item" for the purposes of s. 75 of the CCA 1974. Let's hope, however, the FOS sticks to their original position.

[R0b]

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

I would take the FOs's initial decision as strong support yes, and then you forward that to AMEX and go from there, and then follow the complaints procedure back through to the FOS.

[dossier]

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

You would have to prove a compelling argument for the misrepresentation first to award a decision in your favour.

Secondly, the FOS are not bound I believe but they like to try and keep things consistent so unless there was a real good reason why they should depart from an earlier decision then they will probably agree with it. I would not be surprised if AMEX do in fact use the argument about being 2 years. Best in mind the FOS are not legally trained generally so the more complex the argument the harder it is to follow and will probably opt for the easier decision.

If the decision is awarded in your favour and you accept both parties are bound legally - If AMEX refuse to pay out then it's a simply formality to go to court and get an order, no trial just procedural application and then you can enforce as if it was a court decision and the usual recovery options will apply.

So the FOS Investigator has stated that: "You’ve provided the copies of the sales invoices for each academic year. These demonstrate the payments were arranged under two separate agreements of not more than 4 instalments within a 12 month period."

Can we take this to be strong support for claiming that "each academic year" is a "single item" for the purposes of Section 75 of the CCA 1974 with Amex?

I do wonder if there is a scenario where the FOS assert that each academic year is two separate agreements (for the purposes of not putting the agreement under the CCA1974 concerning an FOS complaint about the AI), but on the contrary, argue that the "single item" is the entire "programme" and not "each academic year" when it comes to the £100 - £30k criteria of s. 75 of the CCA 1974 (concerning a potential future FOS complaint about Amex UK in a s. 75 claim).

[dossier]

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

You would have to prove a compelling argument for the misrepresentation first to award a decision in your favour.

Secondly, the FOS are not bound I believe but they like to try and keep things consistent so unless there was a real good reason why they should depart from an earlier decision then they will probably agree with it. I would not be surprised if AMEX do in fact use the argument about being 2 years. Best in mind the FOS are not legally trained generally so the more complex the argument the harder it is to follow and will probably opt for the easier decision.

If the decision is awarded in your favour and you accept both parties are bound legally - If AMEX refuse to pay out then it's a simply formality to go to court and get an order, no trial just procedural application and then you can enforce as if it was a court decision and the usual recovery options will apply.

Thanks. I will revert in this thread about the basis of the claim under s. 75 of the CCA 1974 against Amex UK for the misrepresentation by the AI - as I will definitely need to "kick the tyres" to test out the grounds for misrepresentation, now that we have managed to at least resolve the "single item" issue for a s 75 claim.