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

[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)

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)

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.

[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

[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)

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

[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)

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.

[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)

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!

[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)

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.

[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)

[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.

[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.