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

[dossier]

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

Well as long as the complaint has been over 8 weeks and/or you have received a final decision letter or sorts then you just go onto the FOS website and download the word complaint document and complete as required. It is probably best to set out a timeline of events, including that you believe the agreement falls within the CCA and then await the response from the FOS. Bear in mind that people from the FOS are not legally trained but will probably have some knowledge of s.75 so always best to signpost them in the right direction just in case.

Thanks: on your original proposal, the FOS believe that the T&Cs are not a regulated agreement under the CCA, and therefore believe it falls outside their jurisdiction. However, with some prodding, they have agreed to write to the academic institution to clarify whether the academic institution believes it falls within the CCA 1974 (i.e. it is a regulated agreement), or it is an exempt agreement (and how is it exempt).

[R0b]

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

Well it is a start, did the FOS give their reasons why they think it is not a regulated agreement?

[dossier]

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

The FOS preliminary view from the person handling the case is that: whilst the Academic Institution is an FCA regulated entity, the T&Cs do not appear to be a regulated consumer credit agreement to them.

However, in discussing it with the FOS, they agreed to write to the Academic Institution to ask the AI what their view is on the T&Cs (i.e. is it a CCA 1974 related agreement or not).

This is in fact what I was asking the FOS to do in the first place, so it seems they are now prepared to do that, and they will hopefully be writing soon to the AI to ask:

(1) Are the T&Cs regulated by the CCA 1974 in the AIs view (i.e. is it a regulated agreement)?
(2) If not a regulated agreement, what exemption does it fall under in the CCA 1974
(3) If it is a regulated agreement, details of your OFT Category A licence of the AI

[dossier]

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

Well it is a start, did the FOS give their reasons why they think it is not a regulated agreement?

The process has reached an FOS investigator.

The reaction from the FOS investigator was surprisingly hostile and unhelpful, and they are sticking to the position it is not a regulated agreement. The FOS investigator has u-turned entirely from the frontline FOS staff response and contrary to the previous update from the FOS, is strongly resistant to contacting the AI at all.

The FOS investigator states that no credit was provided under the agreement, and therefore it is not regulated. When pushed on the matter of the exemption under the CCA, the answer is that the FOS investigator chooses not to take note of this.

So in summary, the FOS investigator will not be contacting the AI in writing, and is closing the matter on the grounds it is not a regulated agreement and is not a CCA matter and no credit was provided.

I made the classic mistake of sharing the wrong type of information with the FOS, as the FOS are designed to intervene to help those who are underprivileged and lacking knowledge, and as the FOS investigator or ombudsman can rule on the grounds of fairness and common sense.

The FOS investigator has the clear impression this is some kind of exercise in avoiding payment of tuition fees, rather than a genuine case of misrepresentation by the AI.

[dossier]

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

Well it is a start, did the FOS give their reasons why they think it is not a regulated agreement?

Given my FOS experience, it seems like this is a dead end. I am therefore not keen to see a situation where the s75 claim itself gets to the FOS stage, based on this experience.

[R0b]

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

Hi dossier, have you written back to the FOS asking for someone to review the decision and explain their full reasons as to why the CCA does not apply. The Ombudsman of course should give their reasons in detail why they do not think that the Agreement falls within the CCA and what exemption it believes they can rely upon. To simply give a blanket statement and say it is not exempt and that is that does not seem to be correct.

[dossier]

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

Hi dossier, have you written back to the FOS asking for someone to review the decision and explain their full reasons as to why the CCA does not apply. The Ombudsman of course should give their reasons in detail why they do not think that the Agreement falls within the CCA and what exemption it believes they can rely upon. To simply give a blanket statement and say it is not exempt and that is that does not seem to be correct.

Thanks. The FOS investigator wrote:
"...Although the AI are regulated by the FCA the contract you have with them is not a regulated agreement. Because the AI haven't extended credit to you the agreement isn't a regulated financial product and so it doesn't fall under the Consumer Credit Act 1974 as you have suggested.This means your complaint isn't one that this service can look into.
As requested I contacted the AI who have confirmed the contract isn't regulated."
I have been given a 6 day window to respond, and I have written back within the window to ask for further clarification of why the FOS Investigator believes it is not a regulated agreement, and providing "additional information" to the FOS investigator concerning this.
Overall, I have a clear sense from the FOS Investigator that they want to close this as quickly as possible and have nothing further; and are trying to stick to the position it is not a regulated agreement. The FOS investigator is also proving to be a rather slipper character; e.g. deliberately writing whilst knowing I am on holiday and with the standard FOS timelines that are 6 days to respond. There is also an entirely vague reference to the FOS actually contacting the AI, and the AI agreeing it isn't regulated (I am not entirely confident that the FOS Investigator even bothered to actually do this).
So the direction the FOS Investigator correspondence is going in is: to underscore that the Agreement is "not regulated" by the CCA 1974, and in due course, potentially providing more written correspondence in detail as to why this is the case. I am happy to continue the back-and-forth with the FOS on this for a while and see where it gets to. Fundamentally, there are only two possible outcomes: (a) the FOS digs its heals (even if pushed to an Ombudsman) and states that in their view the Agreement is not a CCA1974 regulated agreement; or (b) the FOS U-turns and agrees it is a regulated agreement.
From the actual conversation with the FOS investigator and the subsequent correspondence, I am sensing somewhat contemptuous attitude from the Investigator. My best guess is that the FOS investigator believes this FOS complaint is an attempt on my part to defend action against a DCA for unpaid tuition fees; presumably using the CCA1974 to underscore unenforceability of the agreement or using the CCA1974 to frustrate these attempts. The FOS Investigator therefore appears to push the point it is not a regulated agreement (thereby not a CCA1974 matter, so no optionality to frustrate DCA attempts through the CCA1974 or any ground for claiming unenforceability for non-compliance with the CCA1974 of a regulated agreement).
Ironically, any such incorrect impression by the FOS Investigator should just help to push this further into more detailed explanations by the FOS Investigator (and / or Ombudsman) into why this is not a CCA1974 regulated agreement (presumably some actually detailed reasons will have to follow - such as how it qualifies with the exemption etc.).

[R0b]

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

You could try and follow this route -> http://www.financial-ombudsman.org.u...aints_a12.html

[dossier]

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

You could try and follow this route -> http://www.financial-ombudsman.org.u...aints_a12.html

The FOS Investigator responded within hours to my correspondence, and wrote:

"The Consumer Credit Act 1974 (CCA) doesn’t regulate agreements where:

• the total number of repayments does not exceed four,
• and those payments are required to be made within 12 months starting from the date of the agreement.

As you will see point 7 of the contract you signed up to states the following:

‘7. The School may agree separately that the fees that are due in relation to an Academic Year can be paid in instalments If the School so agrees in relation to an Academic Year's fees (or any part of them), then the School and the Student liable for those fees will agree separately, in writing, the amount of the fees that is to be deferred and the anticipated schedule of instalments by which the deferred amount is to be paid. As a condition of the School's agreement to such a deferred payment arrangement, the agreed amount for each Academic Year shall be paid in not more than four (4) instalments within a period that does not exceed twelve (12) months beginning with the date of the relevant invoice. The School shall issue a separate invoice and schedule of instalments relating to the fees due in respect of each Academic Year, which shall be evidence of the separate agreement for the payment of that Academic Year's fees.’

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.

Because of this, the agreements are not covered by the CCA and are therefore not regulated products. This means the Financial Ombudsman Service doesn’t have the jurisdiction to consider your complaint."

[dossier]

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

So I presume we now have the FOS clarification that we were looking for originally about two separate agreements of not more than 4 instalments within a 12 month period.

[R0b]

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

Sounds like you have the answer you need then to bring it within S.75

[dossier]

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

To clarify: I have until the 1st June to request an Ombudsman to review this; i.e. I have until the end of today to submit this request (it seems the 6 days is not extended, which is very good of the FOS!)

[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

Thanks [MENTION=551]pt2537[/MENTION] - after the FOS looked at the T&Cs, their view is that:

"The Consumer Credit Act 1974 (CCA) doesn’t regulate agreements where:

• the total number of repayments does not exceed four,
• and those payments are required to be made within 12 months starting from the date of the agreement."

And

"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."

[dossier]

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

Sounds like you have the answer you need then to bring it within S.75

Great - as I have only until 1 June, I presume I should still get this raised to an FOS Ombudsman for review (from the FOS Investigator), such that I can get this put out properly in a written letter (I only have an FOS Investigator e-mail for now).

[R0b]

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

Sure you could do that so you have something formal. You would have to raise an argument I guess and the only argument you could say is that the agreement spans 2 years despite being invoiced and so the interpretation of the word agreement will come into play and what were the parties intentions