GMAC RFC will pay up to £7.7m customer redress

[Budgie]

Re: GMAC RFC will pay up to £7.7m customer redress

I think we were all fooled by our first ( and second ) read through of the FSA statement. But it's all clear now.

The failed direct debit charge and the monthly arrears fee need testing in a county court claim.

To date GMAC RFC have settled claims made against them and chosen not to test the unlawful or unfair nature of these charges in court.

I suspect that they will still choose not to do so.

I will therefore continue with my claim, if they settle, in full prior to court hearing then all well and good.

If they wish to let the claim proceed the court on the strength of the apparant FSA sanctioned approval of these charges as being a measure of their costs then so be it.

I am up for the fight.

[ed.]

Re: GMAC RFC will pay up to £7.7m customer redress

There are two clear issues here.

The reporting by both the press, AND more importantly the FSA.

The charges again.

My same problems with Justice Smith's penalty ruling come into play here (on the actually unfair charges the FSA bothered to look at). I don't see any real 'unfair' difference between fees for setting up non DD payment regardless of whether or not the account is fine or in arrears.

The charge is the same, it's a penalty for not allowing them unbridled access to your bank account, the fee is unfair as it in no way represents the cost of 'banking a CHQ'.

The more you look at it the FSA have worked out what sounds like a good headline for the Politicians who are too busy rewriting their own expenses claim to pay any real attention, and have in fact actually done feck all in reality.

Again, one so called regulator will be enjoying a nice Xmas party this year.

(I'm cynical at the best of times, but I think it's best I go to bed now lol)

[Budgie]

Re: GMAC RFC will pay up to £7.7m customer redress

There are two clear issues here.

The reporting by both the press, AND more importantly the FSA.

The charges again.

My same problems with Justice Smith's penalty ruling come into play here (on the actually unfair charges the FSA bothered to look at). I don't see any real 'unfair' difference between fees for setting up non DD payment regardless of whether or not the account is fine or in arrears.


The charge is the same, it's a penalty for not allowing them unbridled access to your bank account, the fee is unfair as it in no way represents the cost of 'banking a CHQ'.

Aha but the FSA did because they have accepted the proposals of GMAC-RFC in that they will only be refunding the charges ( for not paying by direct debit ) for the occasions that the charge was levied when the account was in arrears. They will not be refunding the charges ( for not paying by direct debit ) for the occassions that the charge was levied when the account was NOT in arrears.

The more you look at it the FSA have worked out what sounds like a good headline for the Politicians who are too busy rewriting their own expenses claim to pay any real attention, and have in fact actually done feck all in reality.

Well thats the job of the FSA press office I suppose.
Additionally, the FSA may have done some real damage to our cause because the fact that GMAC-RFC have been given an apparant clean bill of health in relation to the Failed direct debit charge and the monthly arrears fee is something they will likley use to their advantage in any future court claims by individuals.
The whole thing is basically a double whammy, the FSA have picked up on charges that the Consumer wasn't really too concerned about ( maybe with the exception of the legal expenses ) and have possibly stuffed up the case for the charges that the Consumer was concerned about.
But the FSA are OK they have the income from a £2.8 million fine to look forward to.


Again, one so called regulator will be enjoying a nice Xmas party this year.

(I'm cynical at the best of times, but I think it's best I go to bed now lol)

Am off to bed too = shattered

[ed.]

Re: GMAC RFC will pay up to £7.7m customer redress

Oh bugger it's posts like this that make me stay up all night mate lol It pains me to do so as a Villa fan, but I'll go blue! lol

The charge is the same, it's a penalty for not allowing them unbridled access to your bank account, the fee is unfair as it in no way represents the cost of 'banking a CHQ'.

Aha but the FSA did because they have accepted the proposals of GMAC-RFC in that they will only be refunding the charges ( for not paying by direct debit ) for the occasions that the charge was levied when the account was in arrears. They will not be refunding the charges ( for not paying by direct debit ) for the occassions that the charge was levied when the account was NOT in arrears.

No they didn't, by implication of the overall thrust of the release:

"serious failings by GMAC-RFC were identified in relation to its dealings with customers experiencing arrears "

Arrears by default (no pun lol) implies situations of arrears, ergo default charges for missed payment, charges for not making full payment. Bottom line they were implying charges received for going into and being in arrears. Because obviously a late payment charge/missed payment charge can only be applied buy late or missed payment date - by which time you are then in arrears.

There was no true clarification that the charges they discussed as being refunded in their press release only applied to those who received an additional charge by paying by alternate means.

I continue to quote, because I'm good at it, and at this time of night it's almost as much as I can do PMSL

excessive and unfair charges for customers that did not reflect administration costs; (all charges are implied)

Therefore the press release by the FSA seriously fails under Principle 1 (I think) of the press complaints commission ie accuracy. And therefore it seriously fails whe approached from the angle of misrep and deliberate deception.

Which equally means each and every media outlet carrying this who were too stupid to check out the real facts are equally open to a case of inaccuracy.

I do agree with what you say based on your confirmation from the FSA, BUT that wasn't the picture painted by their very own release which is issue 1.



The more you look at it the FSA have worked out what sounds like a good headline for the Politicians who are too busy rewriting their own expenses claim to pay any real attention, and have in fact actually done feck all in reality.

Well thats the job of the FSA press office I suppose.

Very sadly yes. And whilst it may be legal, it was a press release therefore it comes under the PCC. And even if it doesn't, the subsequent coverage certainly does and that can be challenged.

Additionally, the FSA may have done some real damage to our cause because the fact that GMAC-RFC have been given an apparant clean bill of health in relation to the Failed direct debit charge and the monthly arrears fee is something they will likley use to their advantage in any future court claims by individuals.

I wouldn't go that far, but I do see where you are coming from. There's enough in the statements to show they didn't clearly look at things (especially as the FSA almost recommend in their 'leave me alone I want my Santa present) manner that 'a' consumer should push this. I do see where you are coming from, but I'd call it 'potential damage' as opposed to real damage at this point.


The whole thing is basically a double whammy, the FSA have picked up on charges that the Consumer wasn't really too concerned about ( maybe with the exception of the legal expenses ) and have possibly stuffed up the case for the charges that the Consumer was concerned about.

Which goes to what I said. Knight in Shining Armour because they need to do something fast (without compromising future job opportunities - did I really say that - or a crap Xmas) because the rumours are the Tories will scrap the lot. The biggest stick the Tories have are 'boom and bust' and Brown's failed self regulation. The important people in the FSA when the Tories win the eventually election will be sacrificed, because there's no way Cammy will keep them. What they are doing is a last ditch attempt to show they are useful, or failing that bump up severence packages because they finally can show success - in their terms.

I don't agree they have stuffed it though. GMac have stuffed it by quoting continually 'market forces, average of market and competitors' etc. No where do they hide behind true cost, and the FSA only hinted at costs involved, ie bank charge........what 50p? That's what I was charged when some git bounced a CHQ on my company lol

But the FSA are OK they have the income from a £2.8 million fine to look forward to.

Ain't that the truth brother! Sorry forgot my ethnicity then.

They'll get a good Xmas on GMac's behalf, we all know that PMSL

[Judge mental]

Re: GMAC RFC will pay up to £7.7m customer redress

I was initially hopeful that this was an indication of the ‘tougher’ FSA promised by the new chairman and demanded by the Treasury committee. The headlines are indeed good news . . . the heavy fine and customer redress program, I am also pleased to see the issue of charges for ‘solicitors fees’ are now also subject to scrutiny, however, I cannot help feeling that the FSA have softened what could have, and should have been a more substantial blow.

In addition to Budgie obtaining clarification that the scope for redress is actually quite limited, the Final notice includes the following -

5.13.
The FSA has not determined that GMAC deliberately or recklessly contravened regulatory requirements.
5.15.
The FSA has not determined that GMAC deliberately set out to accrue additional profits or avoid a loss through the way in which it operated its systems and controls and processes.

How can this be?
a) GMAC were fully aware of the restrictions and limitations within the regulations, therefore the decision to comply or not comply must have been a considered and deliberate.
b) Generating funds over and above costs is profit.

Fundamental to the FSA’s determination that the charges are unfair is full disclosure and scrutiny of the administration costs when dealing with defaults, but despite the demands for more transparency from the finance industry the actual administrative costs incurred remain undisclosed and unchallenged beyond a ‘chat over a pub lunch’ type of investigation. My view is that the FSA have been half hearted and opened the door to imaginative interpretation, legal teams will now be revising their defences claiming that the FSA have investigated and do not regard default charges as unfair at their current level.

Business as usual at the FSA after all.

[charitynjw]

Re: GMAC RFC will pay up to £7.7m customer redress

Quick quiz

What do the letters 'FSA' stand for?

All answers, on a postcard, addressed to:-

Mr G Brown, Downing St, London

[Amethyst]

Re: GMAC RFC will pay up to £7.7m customer redress

This is a list of GMAC-RFS's NEW fees since the FSA took action against them for ''unfair and excessive fees''

GMAC RFC FEES the FSA found to be FAIR

Arrangement Fee - Porting Max £595.00
Arrears Fee £50.00
Change of Mortgage Term Fee £50.00
Change of Repayment Type Fee£75.00
Copy of Deeds Fee £40.00
Copy Mortgage Statement Fee £20.00
Deed of Easement Fee £50.00
Deed Production Fee £50.00
Further Advance Revaluation Fee£70.00
Home Visit Fee £100.00
Improvement Grant Application Fee £50.00
Insurance Review Fee £40.00
Land Compensation Fee £50.00
Lapse Fee £40.00
Lender's Reference Fee £50.00
Letting Administration Fee £100.00
New Property Fee £125.00
Part Release of Security Fee £100.00
Redemption Administration Fee £135.00
Re-inspection Fee £70.00
Repossession Fee £300.00
Re-type of Valuation Report Fee £50.00
Second Mortgage Questionnaire Fee £60.00
Second Mortgage Consent Fee £25.00
Security Protection Charge £25.00
Solicitors Instruction Fee £60.00
Telegraphic Transfer Fee £35.00
Transfer of Equity/Title Fee £150.00
Transfer of Equity/Title Fee for Declined/Cancelled cases£60.00
Unpaid Cheque Fee £30.00
Unpaid Direct Debit Fee £30.00
Unpaid Ground Rent/Service Charge Fee £50.00
Variation in Lease Fee £50.00

[scoobydoo]

Re: GMAC RFC will pay up to £7.7m customer redress

My head is very muddled by all this, it is a lot of reading - however I would comment that OTR I have seen that GE have apparently refunded monthly mortgage arrears charges after pressure from the FOS - I also hear that they are going to be stopping charging the fee when there is an arrangement in place. Also this press release has prompted a lot of people to go ahead with claims for recaliming these monthly charges accrued just for being in arrears . They may have also read more into the press release than was intended but I have a feeling the number of claims will increase because of this.

My argument has always been this . Any large mortgage lender will have in place a dedicated arrears department at branch or head office level. This cost is calculated within the business when calculating interest rates/overheads /profit etc. They do not just hire and fire at times when there are more arrears cases . Therefore there should NOT be automatic charges just for missing your payment. The arrears department are already there , they should offer you advice and help to prevent the arrears increasing if possible. That is part of the service that should be offered under the t&C of treating customers fairly.

Charges should only come into place when you have to take a borrower to court when all else has failed because yes at this point there is a lot of extra work involved.

I really hope that this release , flawed or not , will start the ball rolling to get this whole area looked at properly - together with a standardised rules for what happens when the property is taken back, because at the moment borrowers feel that they are left completely in limbo with nowhere to turn.

[Flangies]

Re: GMAC RFC will pay up to £7.7m customer redress

I will be too watching this closely; I am not sure whether to call up Gmac and get myself identified from when I had my account over two years ago. it states that I should just wait as I will hear from them first BUT shall I call them?...I cannot see Gmac just contacting previous gmac customers like myself; we will certainly be laston the list compared to current customershalocat2..........

Thinks I will wait to see whats occuring about the £50 late payment fee and whether I should request that too. I too am getting very confused by it all!

if Gmac do give you a refund on the 8% can you then later push for the £50 late fee?
:haloweeeeen:

[Flangies]

Re: GMAC RFC will pay up to £7.7m customer redress

Hello All;

Has anyone heard if any GMAC customer previuos or current has had any contact with GMac regarding refunding them some of these charges?

x

[Amethyst]

Re: GMAC RFC will pay up to £7.7m customer redress

Be a bit speedy if they had written already, especially with the post being so rubbish at the moment. I really would give them a ring, by all accounts they are very nice.

[fuzzybrain]

Re: GMAC RFC will pay up to £7.7m customer redress

What about accounts GMAC sold on - GMAC were very good at selling accounts on 6/2 months later.

We have a mortgage with GMAC and our current Mortgage company says we are bound by GMAC T&C, so would the MC that the debt was sold onto be bound to repay these charges to us???

[Amethyst]

Re: GMAC RFC will pay up to £7.7m customer redress

If the charges are the same and imposed by GMAC then I'd say so.

[Budgie]

Re: GMAC RFC will pay up to £7.7m customer redress

The fact remains :-

OFT report April 2006

Para 1.1 This statement sets out the Office of Fair Trading's (OFT) view of the principles credit card1 issuers should follow in setting default charges in their standard contracts with consumers in order to meet the test of fairness set out in the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). The principles have wider implications for analogous standard default terms in other agreements including those for mortgages, current bank accounts and storecards.

Para 1.19 In our view the basic principles set out here also apply to other analogous default charges in consumer contracts, for example in agreements for bank overdrafts, mortgages and store card agreements. We invite the banks to reconsider such charges accordingly.

Para 5.14 The broad principles set out in this statement are likely to be relevant to other default charges in standard agreements with consumers, such as those for mortgages, store cards and bank accounts. We expect the banks and other finance businesses to consider the wider implications of these principles, and to bring any similar charges they impose for breach of contract into line with them, where and as appropriate bearing in mind the different legal and practical contexts in which they operate. If appropriate steps are not taken within a reasonable timescale, further regulatory investigation of the position can be expected.

Para 1.14 Only a court can decide finally whether a term is unfair, or at what level default charges should be set to meet the requirements of the UTCCRs. It should be kept in mind that other enforcers may apply for injunctions under the UTCCRs and that the UTCCRs may be relied upon by consumers in private claims.

Para 4.20 It has been put to us that to require charges not to exceed recoverable costs might encourage a tendency for banks to 'gold plate' their operations for handling defaults, in order to increase costs and thus justify higher charges in order to deter defaults. We believe that charges set so as to match recoverable costs that are higher than they need to be would be open to challenge for unfairness, and we would expect to take action accordingly. Taking what a court would order under the common law as a comparable yardstick, it is normal in the assessment of damages for the injured party to be expected to mitigate his loss, and thus to be awarded compensation only for such costs as he could not reasonably avoid incurring.


So the OFT considered that mortgage companies charges for failed direct debit and monthly arrears fees might be unfair under UTCCR and unlawful according to common law.

The FSA have apparantly chosen not to comment on those particluar fees, the fact that they haven;t referred to them in their final notice to GMAC-RFC leaves matters open.

However at the end of the day it's not up to either the OFT or the FSA as only a Court can decide.

Hope that helps.

Budgie

[Ladidi]

Re: GMAC RFC will pay up to £7.7m customer redress

Evening all

Having read this particular forum with interest due to my mortgage being with GMAC and someone kindly put up an email address to write to, I emailed them and this is the response I got :

Dear Mr Spelman,

I am writing this email as I have heard and saw that Gmac were recently fined for over charging their customers when in arrears or for not having a DD set up to make payments or were taken to court for non payment or over charged solicitors costs etc.

Can you please clarify this for me, as myself and my husband currently have mortgage with Gmac and have paid a fortune in fees and so on over the last 3 years or so. Do we need to do anything? or provide to yourselves? We are still with Gmac and if what I have read and heard is right the repayment we are due would bring down our mortgage arrears immensely.

I look forward to hearing from you.

Yours Sincerely

Ladidi

Reply :

Dear Ladidi

Thank you for your e-mail below.

In response; the fees and charges affected are -
1. All charges for non payment of the monthly mortgage payment by direct debit when an account was in arrears and no monthly payment being made.
2. All Early Repayment Charges applied to arrears fees and charges.
3. Part of the solicitors instruction fee that was more than the actual cost.

No other types of fees or charges that may have been applied to your account are affected by this and no further refunds are therefore due.

We cannot tell customers immediately whether a refund is due or not. However, all accounts in arrears are being fully reviewed and we will be writing to anyone who has been affected very shortly.

So in the interim there is nothing that you need to do. If you are one of our customers who have been affected by one of the three charges I have listed, you will be notified and your account balance adjusted accordingly.

I do hope that this is helpful to you, however, I would say that if you have not heard from us by 30th November and you believe that you are due a refund of one or all of the above charges, then please do not hesitate to contact me.

Best wishes

Paul

Paul Spelman

GMAC-RFC Complaints Team
Innovation House, Unit 12a
Mead Way
Padiham
Burnley
Lancashire, BB12 7NG
Tel - 01282 - 682574
Fax - 01282 - 682396
E-mail - consumeraffairs@gmacrfc.co.uk