Firstplus' OFT reprimand - Disclosure

[Halifax71]

Re: Firstplus' OFT reprimand - Disclosure

2 years on and still waiting for the PHSO. This is the PHSO deciding whether the OFT were maladministrative in their decision to withhold under S241a.

Good job i'm not in a rush.

Not long now though apparently.

[slinky252]

Re: Firstplus' OFT reprimand - Disclosure

Hi,

Im a firstplus customer and paying 9.9% which is very high, i am interested in what happens to firstplus here, what benefits are we likely to see if it goes sort of our way. I wish i never started anything with them. Impressed with your great work and patience on this by the way !!

[alan s dale]

Re: Firstplus' OFT reprimand - Disclosure

I am also watching this very closely. Currently awaiting further development with complaints to Financial Ombudsman regarding Firstplus failing to ever Notifying me (as per clause 9 of my contract) of any post change to variable interest rate on my loan.
'clause 9 states - we firstplus will by way of notifying you of any change to interest rate 30 days prior to any change to payments via interest rate change'
In short they have failed to provide a single letter of correspondence - to financial ombudsman or myself - showing proof they ever notified me of any change to my rate. Which they say they will do as per my clause 9 of my contract. Also found they inputted data error of incorrect rate - for 6 years argued they have overinflated my rate changes as a result of data input error at start of contract. They have finally admitted - having sent SAR documents showing last 6 years correspondence they have stated clearly they say the rate at inception being 13.2 -- that they got the rate wrong and realise it should have been 11.328 at inception as per my signed contract. However, they are now trying to back track by saying they had rate changes in 2004 (rates were changed as per documents they sent me between Sept 2005 and Aug 2008 - never any mention at all of changes by themselves in 2004 before) and this resulted in increase to 13.2 - however having checked this the maths do not add up to anything close to 13.2 and also no such increase were applied and they have no proof from 2004 at all of rate changes bar their verbal view on this.
Any thoughts on above most welcome.

[Khonsu]

Re: Firstplus' OFT reprimand - Disclosure

Correct me if I'm wrong on this - I believe that FP calculate their Interest Rates inline with the FHBR. In June 2008 to June 2009 the FHBR reduced it's rate from 6% to 1% where it has been there or thereabouts since. I am fairly certain this was not passed onto FirstPlus customers.

[elbmek]

Re: Firstplus' OFT reprimand - Disclosure

I think their answer would be along the lines of 'when contract was signed, it was etc etc'

[Fred]

Re: Firstplus' OFT reprimand - Disclosure

Correct me if I'm wrong on this - I believe that FP calculate their Interest Rates inline with the FHBR. In June 2008 to June 2009 the FHBR reduced it's rate from 6% to 1% where it has been there or thereabouts since. I am fairly certain this was not passed onto FirstPlus customers.

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The only use of FHBR I have come across in FP contracts is "will not deviate by more than twice the FHBR in any 12 month period" hence customers have to pay what they state.

[Fred]

Re: Firstplus' OFT reprimand - Disclosure

aw:I have also gone the same route as member "Halifax" above its not been signed by my MP yet but hopefully in the next few days..........."zzzzzz"

Also it includes UTCCR complaint data which the OFT have not the resources to look into...............priceless

Next is the ICO who now have the very same request under the FoIA rules.

Wont fail for lack of trying.

[Halifax71]

Re: Firstplus' OFT reprimand - Disclosure

Still waiting - 3 years now

Not long to go now though - apparently.

[Amethyst]

Re: Firstplus' OFT reprimand - Disclosure

Who is handling this now?

[Halifax71]

Re: Firstplus' OFT reprimand - Disclosure

Still with the PHSO.

There have been legal complications. Still don't know what's going to happen but if I do get a maladministration ruling in my favour it'll still be actionable, even though the OFT have closed.

[Amethyst]

Re: Firstplus' OFT reprimand - Disclosure

That's what I was wondering. Have you heard from them to say it's still moving forwards?

[Halifax71]

Re: Firstplus' OFT reprimand - Disclosure

Yep, I get regular updates. Can't say much as it's still subject to privacy whilst the investigation continues - a decision is due though.

3 years - it had better be worth it

[Halifax71]

Re: Firstplus' OFT reprimand - Disclosure

Only took 3 years but I finally got the decision from the Parliamentary Ombudsman.

30 pages no less, but in summary the OFT were maladministrative in their consideration under 241a.

The problem now, is that it has taken them so long that the OFT have been abolished, so I now have to get the CMA to look at it afresh. They have agreed to do so, and will take the findings into account. Privacy has been lifted on this now so i'll post a few of the findings below. This is different to the information itself, which should it be disclosed will have stringent restrictions attached to it - i.e. it couldn't be shared.

Edit, sorry I can't get the numbering to work correctly below. You'll get the idea anyway.

[Halifax71]

Re: Firstplus' OFT reprimand - Disclosure

Just the findings detailed below - there's 70 odd paragraphs prior to this that I've not copied as it details the communications, discussions etc that were considered.

Findings

1. The OFT took decisions on whether to provide Mr Fielding with information on four occasions. These were 3 February and 14 May 2010 and 21 January and 8 March 2011. It is necessary to focus only on the final decision in order to determine the complaints as this includes the most comprehensive explanation of the basis for the OFT’s actions. Our focus has, therefore, been on Mr Fielding’s request to the OFT of 22 December 2010 and the reasons for its decision set out in the General Counsel’s Office’s review and decision letter of 8 March 2011.

Mr Fielding’s request of 22 December 2010

1. The OFT’s response of 8 March 2011 treated Mr Fielding’s request of 22 December 2010 as being for it to reconsider the decision to not provide him with two categories of information, these being Firstplus’ policies and procedures disclosed to the OFT and details of the OFT’s investigation into the company. We believe the OFT may have misinterpreted the first part of that request.

1. Mr Fielding’s first request was for the OFT to reconsider the decision to issue a requirements notice that did not include the disclosure of the policies and procedures it had seen. The OFT’s response of 21 January 2011 had correctly identified Mr Fielding’s request. The reply given was simply that the decision at the time had been that it was not necessary to require the specific policies and procedures to be made public.

The section 241A gateway

1. The first consideration for the OFT was whether Mr Fielding’s request met the purpose of the section 241A gateway. The reviewer identified this as the most important question for the OFT. This follows the OFT’s guidance which says that it was for it ‘to decide when the request for information is made in order to genuinely pursue a case against the trader’.

1. The OFT knew that Mr Fielding’s request was made in relation to a ‘proposed civil action with regard to the fairness of the terms of my loan’ (see paragraph 25). It would have also known that Mr Fielding’s specific allegations included that the clause in his loan was unfair (and contrary to the Regulations) as it did not precisely specify how variations in the interest rate would be made (see paragraph 21). Mr Fielding had also provided the OFT with further explanations of the nature of his claim (see paragraphs 34 to 38). The OFT would have known that this is a matter that could form the basis of a legal action that Mr Fielding could pursue. The OFT also knew that Mr Fielding had exhausted the Financial Ombudsman Service complaints process. His purpose for wanting the information requested appeared to be solely for proposed civil law proceedings. However, the OFT did not know that Mr Fielding was seeking the information to help him obtain legal advice and representation (see paragraph 67).

1. The OFT was not satisfied that Mr Fielding’s request fell within the section 241A gateway as set out at paragraph 51. In particular the OFT acknowledged that whilst the evidence supplied by Mr Fielding did indeed indicate that his request was made generally for the purpose of establishing or enforcing his legal rights as a consumer but that there was no clear indication that proceedings were imminent or likely.

1. The CMA has suggested that the OFT may have taken an approach less heavily based on concerns about the genuineness of Mr Fielding’s intention to bring legal proceedings had it known the full details of his circumstances as outlined in paragraph 67. Additionally, it may have taken a different view on the fact that Mr Fielding’s legal claim was not particularised in a legal format.

1. We consider that the OFT have adopted an unreasonably narrow approach to section 241A. The provisions in section 241A(1) allow for the release of information in connection with civil proceedings (including prospective ones); for obtaining legal advice in relation to such proceedings; or release of information otherwise for the purposes of establishing, enforcing or defending legal rights which are or could be the subject of proceedings.

1. The OFT interpreted the word ‘prospective’ as requiring a clear indication that proceedings were ‘imminent or likely’. We consider that interpretation imposes requirements that do not appear on the face of the statute and arguably which run contrary to the express wording of the section. In our view an individual may seek disclosure for purposes falling within s241A without such proceedings being likely or imminent. The requirement for ‘imminence’ or ‘likelihood’ of proceedings presupposes an arguable claim and, for example, as such misses the step of obtaining legal advice as to whether or not a claim exists in the first place. In this regard section 241A(1)(b) envisages disclosure for the purposes of obtaining legal advice in connection with prospective proceedings. In our view the natural meaning of that particular sub-section is to allow for legal advice to be obtained as to whether proceedings could be brought and not to only allow advice in connection with proceedings which are imminent.

1. We recognise that the OFT must satisfy itself that any requests are genuinely for the purposes set out in section 241A, such as that legal advice is being sought. However, a genuine intent to pursue legal rights is not the same as proceedings being likely or imminent as this sets the bar too high and excludes actions to determine whether to proceed with legal action. That said, we recognise that the OFT was not aware of the facts set out in paragraph 67.

1. In reaching our conclusion that section 241A does not require proceedings to be ‘imminent’ or ‘likely’ we have also been mindful that one of the reasons section 241A was introduced was to allow public authorities to share information with potential claimants such as consumers seeking to enforce their rights. That legislative intent supports the view that disclosure may be made under section 241A to (for example) enable legal advice to be obtained as to whether a claim was possible.

1. For the reasons given above, we find that there was maladministration in this aspect of the OFT’s decision to refuse Mr Fielding’s request.

1. Commenting on this point, the CMA accepted that the OFT’s position cannot be said with confidence to represent the better view on the interpretation that should be given to the section 241A gateway. However, the CMA believed that the matter was not free from doubt and, in taking the position that it did, the OFT had not been manifestly unreasonable. We accept these points.

The section 244 considerations – contrary to the public interest

1. The first of the section 244 considerations is the need to exclude from disclosure (so far as practicable) any specified information whose disclosure the OFT thinks is contrary to the public interest.

1. The OFT, when dealing with Mr Fielding and in response to our investigation, said that there was a public interest in it being able to carry out its functions as a regulator in an effective manner. The OFT considered the disclosure of specified information by the section 241A gateway created a risk to that public interest of regulated entities: ‘refusing to cooperate with regulatory action taken by the OFT’; and ‘releasing information only where legal proceedings are taken against them, and for resisting such proceedings if taken’. It also thought that the release of views expressed by the OFT during an investigation and not intended for public consumption would be likely to be prejudicial if taken out of context.

1. We agree those were relevant public interest factors for the OFT to have considered. However, we believe the OFT’s stance may have overstated the potential risk in question. There are several reasons why we believe this may be the case.

1. The OFT suggested that businesses ‘would be substantially less likely to engage in such correspondence with the OFT if they thought that details of correspondence with them were likely to be disclosed under section 241A’. We think that businesses cannot reasonably expect that specified information held by the OFT would not be disclosed if the provisions of section 241A (and the considerations in section 244) had been met and no other good reason to deny the release of particular specified information existed. We believe that businesses ought to know this. Businesses also ought to know that the Enterprise Act protects specified information the release of which might otherwise significantly harm their legitimate interests and that such information would only be released for a particular purpose and if there was an overriding public interest in doing so.

1. We are not persuaded that releasing specified information by the section 241A gateway would necessarily lead to businesses refusing to provide information. The OFT has powers to require the production of information and documents (for example, sections 36B and 174A of the Credit Act). We do not see why referring to those powers when requesting information would place an undue burden on it. Nor are we persuaded that the proper release of information by the section 241A gateway would lead to businesses resisting regulatory action. We believe that the risks to a business of resisting regulatory action could outweigh the risk of any harm being caused by the proper release of information by the gateway.

1. We believe that the OFT’s own guidance supports those conclusions. That guidance stated that its ability to carry out its work could be put at risk by the ‘unnecessary or disproportionate disclosure of confidential information’ (see Annex A, paragraph 31). We do not see that the proper release of information by the section 241A gateway, bearing in mind the considerations of section 244 and the discretionary nature of the gateway which gives rise to the further considerations of relevance and necessity, would be unnecessary or disproportionate.
   
2. In reply to our position on that point, the OFT drew our attention to its status and 40 years experience as the specialist regulator of businesses in this sector. It believed that this added weight to its views about the likely effect of disclosure of information by the section 241A gateway on its ability to undertake its functions efficiently and effectively. We have considered the OFT’s views and given them the weight that should be afforded to them. However, in this instance we do not agree with them.

1. Commenting on this point, the CMA said that it considered the implications of potentially ‘over-broad’ disclosure for information gathering on a voluntary or compulsory basis represented a real issue for the OFT, as it does for the CMA. We acknowledge this point.

1. During our discussions with the OFT on this case it was strongly asserted that it did not apply a blanket approach to the public interest consideration. However, it was acknowledged that some of the wording used by officials in correspondence with Mr Fielding could have better explained the approach being taken.

1. Having carefully considered all of the representations made by the OFT on this point we remain concerned that it had in fact adopted a blanket approach to the public interest. A significant factor in reaching this conclusion was the apparent absence of a particular argument as to why the release of the particular specified information in question would be prejudicial to the OFT’s functions. However, the most important factor was that the OFT’s stance suggests that the public interest in avoiding potential damage to it being able to carry out its work would, in effect, always trump the public interest considerations stemming from the section 241A gateway. That being, to help consumers obtain their legal rights (see Annex A, paragraph 21).

1. Finally, the public interest consideration in relation to Firstplus’ policies and procedures was considered separately by the reviewer in the General Counsel’s Office. As well as the previous argument about the potential damage to the regulatory regime, they said:

‘Also, clearly this issue was considered at the time the requirements were published and it was decided that disclosure of this document was contrary to the public interest.’

1. The reviewer’s opinion was in part based on, or at least they found support for it in, the assumption that at the end of the OFT’s investigation into Firstplus, it was considered that disclosure of the company’s interest rate setting policies and procedures would be contrary to the public interest. We find that it was wrong to accept the decision which it was assumed had been taken under a different set of powers, as part of the basis for the separate decision that had to be taken here. When determining Mr Fielding’s request, the OFT had to consider a different range of factors from those that may have been considered when it concluded the investigation into Firstplus.

The section 244 considerations – significant harm

1. This element is the need to exclude from disclosure (so far as practicable) commercial information whose disclosure the OFT thinks might significantly harm the legitimate business interests of Firstplus.

1. The OFT’s guidance noted that the views of the business should be taken into account as it will be better able to explain the risk of harm to them. This is a valid approach, however, it remains for the OFT to decide whether it thinks the disclosure might cause harm. (We also note that the OFT’s policy is to not seek the consent of the business where the information is to be disclosed via the section 241A gateway.) The OFT’s training materials add that this consideration also requires it to undertake a balancing exercise that weighs the level of harm that might be caused against the necessity of disclosure and the public interest in the purpose of the disclosure.

1. The OFT have told us that administrative fairness would require it to consult with Firstplus before disclosing the company’s confidential documents. We agree with this view. It has also said that Firstplus would have legitimate grounds for objecting to the disclosure if it was made ‘otherwise than in compliance with a court order’. This argument links to the explanation for refusal given to Mr Fielding on 18 February 2010 (paragraphs 28 to 30). It appears to us that the OFT’s view here is whether it can be satisfied that the information being sought is relevant and necessary for Mr Fielding’s purpose.

1. Our view on that is, provided the OFT is satisfied the information is relevant and necessary, it only needs to balance the risk of significant harm against the public interest in Mr Fielding being able to seek redress via the courts for his claim against Firstplus.

1. The reviewer’s analysis of this consideration in relation to disclosing Firstplus’ interest rate setting policies and procedures is reproduced in paragraphs 49 to 51. They noted that part of this contains information about detailed processes which, if disclosed, could harm Firstplus’ legitimate business interests. It is not clear from the reviewer’s analysis whether they thought this was a ‘significant harm’ but we accept that it would have been possible for them to reach this conclusion.

1. However, the reviewer may have failed to consider whether the other parts of that information (which they did not think might cause significant harm to Firstplus) could be released to Mr Fielding. It would have been better if the OFT’s record of its consideration of this element of the decision had been clearer.

The section 244 considerations – necessary for the purpose

1. The need to have regard to whether the information is necessary for the purpose only comes into play within section 244 if it is believed that the disclosure might significantly harm legitimate business (or an individual’s) interests. The necessity test is not a stand-alone requirement of section 244.

1. It appears that the reviewer may have misinterpreted this aspect of section 244 (paragraph 50). However, we do not think this potential mistake had any effect, given the OFT’s guidance on other considerations (which go toward a necessity test).

Other considerations – relevance and necessity

1. The OFT told Mr Fielding it was not in a position to conclude that disclosure of the information requested was necessary for his purpose of taking legal action against Firstplus (see paragraph 52). Its earlier explanations to him suggested that independent confirmation that the information was necessary, such as a court order, would help the OFT to be able to do so. The OFT have since said that it would accept other comparably persuasive evidence of the necessity of the information being requested. This overarching consideration of necessity (that is, it is not tied to the significant harm element of section 244) is covered by the OFT’s guidance on other likely considerations (see Annex A, paragraphs 32 and 33).

1. We note that section 244 says that the OFT must have regard to the considerations within that section before disclosing any specified information. It does not say that the OFT must only have regard to them. We cannot, therefore, say that the OFT were wrong to take other relevant considerations into account.

1. The OFT’s comments to us include that it would not be right to accept the mere assertion by a requestor that the information was relevant and necessary for their purpose. We agree that the OFT itself had to come to a view on the relevance and necessity of the information. This approach follows the guidance given by DBERR (see Annex A paragraph 23) and the OFT (see Annex A paragraphs 32 and 33).

1. On necessity, the OFT’s guidance suggests that it would need to consider whether the information sought directly established the infringement and, if it does, whether there were other means of establishing the infringement to the requisite standard.

1. We have seen that the OFT reviewer thought that it was arguable that Firstplus’ interest rate setting policies and procedures could be relevant to Mr Fielding’s stated purpose (see paragraph 48). The reviewer said it was difficult to reach a view on necessity because his claim was not properly formulated and the OFT did not know what issues in any proceedings would be (see paragraph 51).

1. Mr Fielding’s legal claim was not presented to the OFT ‘particularised in a legal format’. We do not believe it needed to be. However, he had clearly communicated to the OFT the nature of the alleged infringement. We think that this was sufficient to enable the OFT to consider whether the information being sought established the infringement. There is no evidence that the OFT followed its own guidance and properly considered this matter. For that reason, we find that there was maladministration in this aspect of the OFT’s decision.

Consequences of the OFT’s maladministration

1. We have found failings in a number of aspects of the OFT’s decision-making. This means that the OFT’s basis for refusing Mr Fielding’s request for the release of information is unsound. As a result, we cannot be satisfied that the OFT’s refusal was the correct decision.

Outcome to the complaint

1. The CMA has offered to consider a fresh request from Mr Fielding for information via the section 241A gateway. We welcome the CMA’s offer. We believe that the most appropriate outcome to Mr Fielding’s complaints and our investigation would be for him to consider his current position and submit an updated request to the CMA and/or the FCA. We understand that both it and the FCA should hold copies of the information he was seeking.

1. Additionally, Mr Fielding has encountered some botheration in pursing his justified complaints about this matter. Had the OFT still been in existence we would have been minded to recommend that it gives an apology to Mr Fielding. In the circumstances we do not believe that we should seek to obtain an apology from the CMA for the OFT’s past actions.

数

[Amethyst]

Re: Firstplus' OFT reprimand - Disclosure

Some info here http://legalbeagles.info/firstplus-r...t-foi-release/