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

[dossier]

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

Well it's a standard response really, not much more to say other than if you want to press ahead with the Ombudsman complaint then go for it and rely on what you've already been told.

R0b: Thank you for this. I have kicked-off the process by submitting a complaint to the FOS through the proper channels, and am now waiting on the FOS.

I expect the whole process will run over the next 3 - 6 months: i.e. until Easter or Summer 2017.

Do watch this space and thank you in advance for the ongoing advice!

[dossier]

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

Well it's a standard response really, not much more to say other than if you want to press ahead with the Ombudsman complaint then go for it and rely on what you've already been told.

@R0b: The complaint against the CC Co. concerning the s. 75 claim has been recently lodged with the FOS, and I am now in a 'sit and wait' phase. I expect I will get a call from an FOS Adjudicator in the near future to talk about the s. 75 claim.

Thinking it over: I believe we have covered the "single item" point extremely well (to the best extent possible based on the previous FOS Ombudsman decision / FOS precedent cases / written evidence of two separate invoices at two separate times, itemising a "1st year" and a "2nd year". I am comfortable there is nothing more than can be done to strengthen this point, and it is up to the Adjudicator (and later the Ombudsman) to agree or disagree.

However, could we also discuss / review the "misrepresentation" by the AI point in more detail, as I have some concerns that the circumstantial and written evidence shared with the FOS needs more preparation / support in order to make it stronger.

The basis of the misrepresentation by the AI is what I have described as 'misrepresentation by misleading omission': [The AI] misrepresented the content and syllabus of the Programme through misleading omission of material information and did not provide prospective clients with accurate, clear and unambiguous information before making an application and before accepting an offer, as required by the Competition & Markets Authority.

The background information is:
https://www.timeshighereducation.com...019064.article

and

https://www.gov.uk/government/upload...nsumer_law.pdf

Basically, I would like to prepare the strongest 'hard evidence' of the misrepresentation by the AI, so that I have the most compelling case for the FOS to agree that the AI misrepresented.

[dossier]

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

Well it's a standard response really, not much more to say other than if you want to press ahead with the Ombudsman complaint then go for it and rely on what you've already been told.

As a quick reminder, from earlier on in this thread, when I wrote about the tests by the FOS for Misrepresentation by the AI:

The FOS tests for misrepresentation, which is set out below from some past FOS cases:

"For a claim for misrepresentation to succeed I have to be satisfied that a false statement of fact was made, inducing Miss B into making a decision she otherwise would not have made."

"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."

So in order for the outcome to the question of misrepresentation by the AI to be YES by the FOS, we need YES to all of the below:

1) False statement of fact was made by the AI

2) This false statement induced Mrs X into making a decision she would not otherwise have made (i.e. entered into the contract with the AI)

3) Mrs X substantially relied upon this misrepresentation, and if Mrs X had known the true position, Mrs X would not have proceeded with the transaction (i.e. Mrs X would not have signed up to the AI programme and entered the contract)

[dossier]

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

Well it's a standard response really, not much more to say other than if you want to press ahead with the Ombudsman complaint then go for it and rely on what you've already been told.

Hi R0b - just wondered if you had any comments on the above? Thanks

[R0b]

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

Nothing more I can really add to what has already been said, it'll be a waiting game now and see what the FOS says. It would be interesting to see if they deviate from their original position though

[dossier]

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

Nothing more I can really add to what has already been said, it'll be a waiting game now and see what the FOS says. It would be interesting to see if they deviate from their original position though

Thanks R0b. I would welcome comments from you or anyone else on this:

Is a "misleading omission" under the Consumer Protection from Unfair Trading Regulations 2008, a "misrepresentation" for the purposes of the s. 75 of the CCA 1974 (i.e. a Misrepresentation per the Misrepresentation Act 1967)?

My concern is that whilst I have demonstrated with hard evidence that the AI has committed a "misleading omission" under the Consumer Protection from Unfair Trading Regulations 2008; the other issue is whether that qualifies as a "misrepresentation" by the AI (for the purposes of a s. 75 CCA Claim).

Whilst the "single item" argument is as strong as it can be, I am not sure if there is scope for strengthening the "misrepresentation" point

[dossier]

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

The below is an extract from http://www.turbervilles.co.uk/blog/misrepresentation/

A misrepresentation is a false statement of fact made by one party to another, which, whilst not being a term of the contract, induces the other party to enter the contract.

The effect of an actionable misrepresentation is to make the contract voidable, giving the innocent party the right to rescind the contract and/or claim damages.

1.FALSE STATEMENT OF FACT

An actionable misrepresentation must be a false statement of fact, not opinion or future intention or law.

STATEMENTS OF OPINION

A false statement of opinion is not a misrepresentation of fact, some expressions of opinion are mere puffs. However, where the person giving the statement was in a position to know the true facts and it can be proved that he could not reasonably have held such a view as a result, then his opinion will be treated as a statement of fact.

STATEMENTS AS TO THE FUTURE

A false statement by a person as to what he will do in the future is not a misrepresentation and will not be binding on a person unless the statement is incorporated into a contract.However, if a person knows that his promise, which has induced another to enter into a contract, will not in fact be carried out then he will be liable.

STATEMENTS OF THE LAW

A false statement as to the law is not actionable misrepresentation because everyone is presumed to know the law. However, the distinction between fact and law is not simple.

SILENCE

Generally, silence is not a misrepresentation. The effect of the maxim “caveat emptor” is that the other party has no duty to disclose problems voluntarily. Thus if one party is labouring under a misapprehension there is no duty on the other party to correct it.

However, there are three exceptions to this rule:

(i) HALF TRUTHS
The representor must not misleadingly tell only part of the truth. Thus, a statement that does not present the whole truth may be regarded as a misrepresentation.

(ii) STATEMENTS WHICH BECOME FALSE
Where a statement was true when made out but due to a change of circumstances has become false by the time it is acted upon, there is a duty to disclose the truth.

(iii) CONTRACTS UBERRIMAE FIDEI
Contracts uberrimae fidei (contracts of the utmost good faith) impose a duty of disclosure of all material facts because one party is in a strong position to know the truth. Examples would include contracts of insurance and family settlements.A material fact is something which would influence a reasonable person in making the contract. If one party fails to do this, the contract may be avoided.

OTHER REPRESENTATIONS

The term ‘statement’ is not to be interpreted too literally:

• In Gordon v Selico Ltd (1986) 278 EG 53, it was held that painting over dry rot, immediately prior to sale of the property, was a fraudulent misrepresentation.

• In St Marylebone Property v Payne (1994) 45 EG 156, the use of a photograph taken from the air, printed with arrows (misleadingly) indicating the extent of land boundaries, was held to convey a statement of fact (which amounted to actionable misrepresentation).

[dossier]

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

Thanks.

I can see your predicament, it's not very clear cut is it?

Given that this is a lot of money I think you should consider getting some formal advice from a solicitor who specialises in CCA, not just on the £30k issue but whether you have a valid claim in respect of the misrepresentation and standard of the course in any event.

The basis for the s. 75 CCA 1974 Claim is for "misrepresentation" by the AI concerning the content / syllabus of the courses / tuition provided by the AI, in that:

- The AI committed a "misleading omission" under the Consumer Protection from Unfair Trading Regulations 2008

- And that this "misleading omission" is a misrepresentation (under the Misrepresentation Act 1967)

- And therefore, for the purposes of s. 75 of the CCA 1974, a "misrepresentation" has been committed by the AI; and that

- I was induced into the contract by the misrepresentation by the AI (although the misrepresentation was not a term of the contract); and that

- The misrepresentation was material to my decision to enter into the contract (I would not have entered into the contract had I known the true position)

HOWEVER:

- The misrepresentation by the AI was NOT a "false statement of fact", nor a "statement of opinion", but "silence by the AI" - i.e. a "half-truth" misrepresentation

[dossier]

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

Seems this case has difficulties, while i can see the argument of each year being a discrete part of the contract, i think careful consideration is needed of the provision of s75.

Banks in cases such as lankbanking cases which i have dealt with have tried to argue that because the client purchased 4 plots at £25k per plot then the price is over £100k and thus outside of the remit of s75. That argument is easily countered, this one however, well im not sure to be fair.

To me, it seems that the first year and second year are very much joint at the hip, you couldnt undertake a second year of the course without doing the first year, nor im sure would you be able to get the qualification at the end of the second year without studying the first year too. At least thats my thought on that aspect.

You would need to show that the first year and second year both stand on their own feet to pull this into s75

Thank you @pt2537. A few comments I have are:

(1) The first year and the second year are distinctly separate (separate tuition content, separate courses, separate time frame, invoiced separately, different invoice numbers, and invoices that refer to the "1st year" and the "2nd year" separately) (albeit under a 'set' known as a 'Programme' - although FOS precedent shows that even when buying a 'set of chairs' or a 'set of tyres', if broken down on the invoices separately, then they have taken a view that each labelled item is a "single item".

(2) Your raise a good point about showing that the 1st and 2nd years stand on their own feet: You can undertake the first year only, and then the 2nd year, but not the 2nd year only. But then there is a lot of FOS precedent to show that the FOS treat "single items" as the itemisation on the invoice (e.g. you go on a package holiday, but the hotel room is under £100, the dinner is under £100, the flight is under £100 etc.; and whilst all is over £100 in total, the itemisation excludes it from s. 75, even though you can argue you would never have been at the hotel at destination X had you not taken flight Y and would never have eaten at restaurant Z!).

[dossier]

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

At what point did you cancel year 2? Was it before or after you'd been invoiced for it?

During the 2nd year after it was invoiced.

[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 charitynjw. Just to tidy this point up: the AI is FCA regulated; the FOS have reviewed the T&Cs and decided that it is not a regulated agreement, and therefore does not fall under their jurisdiction to consider a complaint directly against the AI with the FOS.

[charitynjw]

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

Thanks charitynjw. Just to tidy this point up: the AI is FCA regulated; the FOS have reviewed the T&Cs and decided that it is not a regulated agreement, and therefore does not fall under their jurisdiction to consider a complaint directly against the AI with the FOS.

I thought that it is regulated, the dispute being whether the 2 years are separate payments per year? (thus within the s75 limit).

[dossier]

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

I thought that it is regulated, the dispute being whether the 2 years are separate payments per year? (thus within the s75 limit).

Thanks charitynjw. For the purposes of the original FOS Ombudsman decision, the Ombudsman 'ruled' that a complaint directly against the AI was out of the FOS jurisdiction because (i.e. the written statement by an Ombudsman was about why the FOS could NOT look at a complaint against the AI, rather than any actual decision (favourable or otherwise) against the AI:

"So, whether or not the CCA applies to the agreement, I am satisfied that it is not a ‘regulated credit agreement’ under FSMA 2000, because it is an ‘exempt agreement’ under the relevant RAO. This means the FOS does not have the jurisdiction to consider the complaint"

I.e. the FOS Ombudsman found a pathway to explain why a direct complaint against the AI with the FOS is out of their jurisdiction; and therefore was non-committal about whether or not the agreement is CCA regulated (the FOS Investigator / Ombudsman could clearly see I was trying to push them into agreeing that the agreement is a CCA regulated agreement, and as they wanted to have no part in this, did the most they could to side-step the point).

[dossier]

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

Nothing more I can really add to what has already been said, it'll be a waiting game now and see what the FOS says. It would be interesting to see if they deviate from their original position though

Hi R0b: I have just discovered a (very big fundamental!) problem with the claim, and I was hoping you might have some helpful points.

The s. 75 claim is for misrepresentation by the AI, on the basis of a "misleading omission".

However, in 2016, there are two FOS final decision cases where:

A s 75 claim for a timeshare with Barclaycard - 28-Nov-2016

"So I don’t think the point was misrepresented to him or that there has been a breach of contract regarding this point.Mr S is effectively saying that what he wasn’t told amounted to a misleading omission. But that isn’t something Barclaycard is responsible for under s.75 of the CCA. So I can’t consider it in this complaint."

and

A s. 75 claim for a used-car purchase with Barclaycard - 23-May-2016

"So I don't think this point was misrepresented to him. He is effectively saying that the omission amounted to a misleading omission. But that isn't something Barclays is responsible for under s. 75 of the CCA. So I can't consider it in this complaint."

In both cases, a "misleading omission" is NOT a valid basis under s. 75. And therefore the claim failed.

Shall I withdraw my FOS Complaint, or consider it doomed to fail? Unless the "misleading omission" is accepted as a "half-truth misrepresentation" to make it a "misrepresentation" under s. 75, there is no way this will work.

[R0b]

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

Well from a legal point of view, a half-truth can amount to a misrepresentation but the FOS does not necessarily need to look at what the courts have said. A misrepresentation is similar to a misleading omission except under a misrepresentation, you relied on the false statement and induced you to enter into the agreement to your detriment. An omission is the omitting of some information which would otherwise cause a person who had the full facts to take a different decision.

They are similar but have two very different remedies