Barclays FirstPlus Super Complaint

[Halifax71]

The Consumer Action Group FirstPlus Complaints have last week submitted a Super Complaint to the Office of Fair Trading in relation to breaches of the Unfair Terms in Consumer Contract Regulations due to their failure to pass on any of the base rate / FHBR reductions to their secured loan customers.

The OFT have agreed to consider it even though we haven't been given designated body status.

I tried to upload here for interested parties to view but the file is too big.

Edit - Download link removed - it can be viewed via the FirstPlus Complaints forum.

Anyone wanting to know more can join us at www.firstpluscomplaints.co.uk

[natweststaffmember]

Re: Barclays FirstPlus Super Complaint

Can I ask how you are able to submit a Super Complaint? Are you a designated consumer group as they are the only ones(AFAIK) who can submit what is know as a Super Complaint?

[Halifax71]

Re: Barclays FirstPlus Super Complaint

They have agreed to consider it as they would any complaint submitted by a designated body.

We've been banging on at them for over 12 months now about whether they have a duty to consider individual complaints as they have regulatory responsibility for the UTCCR, and to be honest the merry go round with the regulators has been disgraceful.

Anyhow, rightly or wrongly, they have agreed to consider

[natweststaffmember]

Re: Barclays FirstPlus Super Complaint

They have agreed to consider it as they would any complaint submitted by a designated body.

We've been banging on at them for over 12 months now about whether they have a duty to consider individual complaints as they have regulatory responsibility for the UTCCR, and to be honest the merry go round with the regulators has been disgraceful.

Anyhow, rightly or wrongly, they have agreed to consider

Can you quote the precise bit of UTCCR 1999 or the original EC Directive from 1993 that the complaint is based on?

[Halifax71]

Re: Barclays FirstPlus Super Complaint

Basically this but there's more to it. I know it's 123 pages but it's a good read. In fact the complaint itself is only 11 pages, the rest are appendices.

With regards to the UTCCR Regulations and guidance, the first point that stands out, underlines all of the above completely,
"A standard term is unfair 'if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer'

Regulation 5

(1) Unfair terms are not enforceable against the consumer. The requirement of 'good' faith embodies a general 'principle of fair and open dealing'. It means that terms should be expressed fully, clearly and legibly and that terms that might disadvantage the consumer should be given appropriate prominence - see below.
However transparency is not enough on its own, as good faith relates to the substance of terms as well as the way they are expressed and used. It requires a supplier not to take advantage of consumers' weaker bargaining position, or lack of experience, in deciding what their rights and obligations shall be.
Contracts should be drawn up in a way that respects consumers' legitimate interests. In assessing fairness, we take note of how a term could be used. A term is open to challenge if it is drafted so widely that it could cause consumer detriment."
It also states
Regulation 7
(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.
(2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under regulation 12.
Regulation 10.4
“A term which merely says that variations will only be 'reasonable' or will only be made 'reasonably', is unlikely to be any fairer than one which contains no such qualification, unless there can be little doubt in a reasonable consumer's mind as to what sort of variation, broadly speaking, such wording allows, and in what circumstances. Where the criteria of reasonableness are vague, or clearly meant to include the best commercial interests of the business, there will be scope for the supplier to change the bargain unfairly to the detriment of consumers, simply on the

basis that he needs to protect his profit margins."

[ed.]

Re: Barclays FirstPlus Super Complaint

Only skimmed it but being interest how is this not caught by 6.2 or affected by the exemptions?

[dontknow]

Re: Barclays FirstPlus Super Complaint

6) 2) a)

may apply to the section five but don't think that it applies to the section 7, also if the rejection of this is on the basis of it being the main subject of eg interest rates and it is stated as that then surly the next step is to re submit under "unfair credit Relationships"

[ed.]

Re: Barclays FirstPlus Super Complaint

It would apply to 7 unless the PIL could be brought into question properly, but the exemptions cover interest anyway.

Just didn't see any argument or suggestions around this so unclear how these elements are expected to be side stepped especially when alternate causes of action weren't also referenced so it wasn't a solitary UTCCR complaint.

That said, on my skim I'm not sure if the main point is the group want access to the info held for their own litigation in the part they attacked the acronyms for not doing anything, or whether they wanted the regulator to take on a full investigation as opposed to them in the section of what they require.

Was just surprised in such a lengthy piece to not see explanations around the first two means of rejection that instantly occurred to me.

[Halifax71]

Re: Barclays FirstPlus Super Complaint

We're basically a group of customers seeking a fair hearing. This cannot go on as they will bankrupt many people in the near future when base rates recoover.

I personally think this will end up in court and i'm in the process of preparing an individual action.

If this gets thrown out due to some exclusion clause then that will just add to my contempt for the regulatory process that has failed me big time.

How it can be fair to be able to increase rates by over 100% with no corresponding increase in FHBR, and for that to be deemed OK by the FOS is disgraceful. We're talking about an increase in repayments from £350 per month to over £700 per month in my case. But then again, it would be prudent & efficient of them to do that.

As I say, I think this will fail and the only route left wil be court.

[dontknow]

Re: Barclays FirstPlus Super Complaint

ed:- does not the refferal to section 7 raise PIL.
going through it that is you are right the obvious objection but it does seem that the term reffered to and analyses of it points to the ambiguity, should this have been expanded on more fully and directly. if the clause falls foul on PIL then 6)2)a) would mean that the other elements come in anyway wouldn't it

also with the exemption that you talk about am a bit unsure about this. (can you please explain)

the analyses of how the clause works is I think spot on

I am a member of FPC and have put in a seperate complaint as an individual.

[Halifax71]

Re: Barclays FirstPlus Super Complaint

PIL?

[dontknow]

Re: Barclays FirstPlus Super Complaint

PIL?

6. - (1) Without prejudice to regulation 12, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.

(2) In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate-

• (a) to the definition of the main subject matter of the contract, or
  
  (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange.

[ed.]

Re: Barclays FirstPlus Super Complaint

Halifax, are you pining your hopes so to speak on this consultation/request for action or do you have your own more personalised complaint aswell? If you have your own due to go to the FOS I would say boost it with unfair rels, and search caselaw for backup on the issues aswell as providing argument around what could see this rejected on the first instance purely owing to 6.2 and the exemptions.

If it is thrown out because of an exclusion clause, then the error is in the formulation of the complaint because the exclusions are clear and the complaint has left itself open to rejection instead of being channelled with appropriate 'alternative' ways of looking at the UTCCR and using the caselaw that is there appropriately.

All I could see in terms of argument on fairness was the repetitive 'we aren't trying to have loans written off' where in effect the thrust of the complaint would be to rectify the ambiguous nature of the term which allows FP a severely unfair discretion on how the term operates in real life.

Yes it's a PIL issue, and yes it's a discretionary contractual imbalance but as it relates to the 'price' of borrowing, and a contractual power to vary interest rates it's the 'discretionary use' of the term that needs the focus more than anything else. In some ways because I don't think I'm explaining this as clear as it feels in my head, the problem isn't with the term itself, the term 'could' operate perfectly fairly and lawfully BUT what stops that is FP's own discretionary decision to ONLY operate it in a manner than suits them.....and not a manner that would suit good faith or contractual parity.

Don'tknow -

There's a difference between saying 'this isn't in PIL because I said so' and then saying 'this isn't in PIL because of x, y, z. The ambiguity could mean you read that term in 3 different ways. As a consumer, the weaker party, you take it on face value which means the term says this...but because it's not legally PIL it means FP can operate the term in their favour with this outcome' etc etc

Just because the burden of proof is on the party claiming terms are fair, doesn't mean you can't and shouldn't give the unfairness body, and explain it clearly. It does hinge on the PIL element here.

To put it into context 99% of the terms in the Test Case were found to be in PIL so the banks basically ticked both boxes of 6.2 in real terms. But you look round the historical terms and charge notifications on this forum...clearly if 5 years ago these terms were used as liquidated damages clauses to cover costs for breach, for exceeding limits etc and NOW they are the part price paid to subsidise free banking the early terms in reality cannot have been in PIL because they purported to be one thing when in fact the banks now say they are another. Very few will try that argument going forward lol because in real terms you'd have still exceeded etc and PIL doesn't necessarily mean a term has to do what 'you think' it's there to do. It allows for you as an individual to 'get it wrong' so to speak, it can't be clearly misleading but if you don't understand it then you ahve the right to question it. However if you think you understand it and have got it wrong, that's not always the fault of the other party.

So if the aim is to get the full weight of the UTCCR against FP then there needs to be clear argument around why the Term isn't in PIL so it's not caught by 6.2. Which would then make life somewhat more easy, because of the discretionary use to their favour and clear detriment of the consumer to side step the exemptions NOT to get it declared unenforceable BUT to get it balanced so it operates appropriately for both.

http://www.opsi.gov.uk/si/si1999/19992083.htm scan down to scope of paragraphs below Sched 2 for the interest exemption.

[dontknow]

Re: Barclays FirstPlus Super Complaint

"it can't be clearly misleading"

in my opinion the term is clearly and Delebratly misleading.

have expanded on this in my personal complaint which was re credit relationships.

re the exemption I take it that it is:-

2)(b) Paragraph 1(j) is without hindrance to terms under which a supplier of financial services reserves the right to alter the rate of interest payable by the consumer or due to the latter, or the amount of other charges for financial services without notice where there is a valid reason, provided that the supplier is required to inform the other contracting party or parties thereof at the earliest opportunity and that the latter are free to dissolve the contract immediately.

meaning that

1(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

doesnt apply, meaning that the assumption is that they have a valid reason unless shown otherwise. which returns to the "clearly misleading " part in that if the reason was to dupe peeps this is not a valid reason sort of thing, so the dots have to be joined and the reasoning explained in explicit terms as to the invalidity of the application of the clause.

[Halifax71]

Re: Barclays FirstPlus Super Complaint

I've got an ongoing complaint with the FOS (initial rejection awaiting ombudsman). That said the FOS will not consider the fairness of a term, just whether it's being complied with.

One member of FPC has had a FOS adjudication recently which said that this was fair under the UTCCR quoting: -

b) Paragraph 1(j) is without hindrance to terms under which a supplier of financial services reserves the right to alter the rate of interest payable by the consumer or due to the latter, or the amount of other charges for financial services without notice where there is a valid reason, provided that the supplier is required to inform the other contracting party or parties thereof at the earliest opportunity and that the latter are free to dissolve the contract immediately.

The problem here is that there was a complete disregard for being "free" to exit. We're captive, rule of 78, price of product now increased, LTV not available etc.

The OFT have been dogmatically saying they don't deal with individual complaints etc.

So, my plan is to get as much info together and go for civil action based on: -

Breaches of the UTCCR
Breaches of the OFT Guidance on Second Charge Lending
Breach of promise under the doctrine of promissory estoppel
Breach of the Unfair Relationship Test under the CCA.