thephoenix v welcome finance

[thephoenix]

Re: thephoenix v welcome finance

I've just found reference to the Consumer Credit (Agreements) Regulations 1983 as amended by the 2004 Amendment Regulations, by way of the OFT.

http://www.oft.gov.uk/shared_oft/rep...it/oft786a.pdf

Now as I read s.3, it shows what can and cant be included in the 'total charge for credit'

s.3.17 includes the following are allowed:
a premium under a contract of insurance, payable under the transaction by the debtor or a relative, where the making or maintenance of the contract is required by the creditor:
as a condition of making the agreement, and
for the sole purpose of ensuring complete or partial repayment of the credit and charges in the event of the debtor’s death, invalidity, illness or unemployment.
To me, a insurance policy thats a 'condition' of the loan can be included

Now s.3.18 Shows what is excluded from the 'total charge for credit' :
including:

a premium under a contract of insurance other than as referred to in Reg 4 (see Q3.17).

To me, this would be an 'optional' insurance policy (see our agreement)

INTERESTING...WHAT ARE YOUR THOUGHTS?

[thephoenix]

Re: thephoenix v welcome finance

I've just found reference to the Consumer Credit (Agreements) Regulations 1983 as amended by the 2004 Amendment Regulations, by way of the OFT.

http://www.oft.gov.uk/shared_oft/rep...it/oft786a.pdf

Now as I read s.3, it shows what can and cant be included in the 'total charge for credit'

s.3.17 includes the following are allowed:
a premium under a contract of insurance, payable under the transaction by the debtor or a relative, where the making or maintenance of the contract is required by the creditor:
as a condition of making the agreement, and
for the sole purpose of ensuring complete or partial repayment of the credit and charges in the event of the debtor’s death, invalidity, illness or unemployment.
To me, a insurance policy thats a 'condition' of the loan can be included

Now s.3.18 Shows what is excluded from the 'total charge for credit' :
including:

a premium under a contract of insurance other than as referred to in Reg 4 (see Q3.17).

To me, this would be an 'optional' insurance policy (see our agreement)

INTERESTING...WHAT ARE YOUR THOUGHTS? I COULD BE WRONG.

Well, I've given the above OFT link a read and it make interesting reading. According to the prescribed terms of a regulated agreements, headings, order of information, what info you HAVE to have......I would say that the Welcome Agreement would be SOOOooo unenforceable, it's not even good enough for bog paper.

I was going to list some of the important points but to be honest, there were that many, I gave up, read section 1,2,3,4, 5.10 & 9. Think your gonna like this

I've learnt a lot whilst reading it. It's a must read, Ame please pass it round.
I still can't find a direct link to the regulations in question, if you find them, give me a nudge.....I'm going bed ZZZZzzzzz

[pam1]

Re: thephoenix v welcome finance

Hi Phoenix,

Just a bit of extra info
I would Definitely follow up those broker fees, having employee's working on the outside as independent mortgage advisor's is something welcome is well aware of that happens in their business.

Welcome do take serious action against anyone caught, regarding these issues it is not something they agree with at all.
As employee's offer better offers to their mortgages customers.

The broker fee added could well of been paid to the salesman's own company or his mates.

Pam

[thephoenix]

Re: thephoenix v welcome finance

Cheers Pam1, got a lot of angles to look at

Right gonna list wot regulations Ive found here:

The Consumer Credit (Agreements) (Amendment) Regulations 2004
http://www.opsi.gov.uk/si/si2004/uksi_20041482_en.pdf

Consumer Credit (Agreements) Regulations 1983 as amended by the 2004 Amendment Regulations ( OFT report on the above regs )
http://www.oft.gov.uk/shared_oft/rep...it/oft786a.pdf

[Amethyst]

Re: thephoenix v welcome finance

Your agreement has the insurances in the right places.

The PPI is optional therefore is not a charge for credit, therefore it should be included in the total credit.

Whereas the mortgage indemnity fee is a CHARGE FOR CREDIT- ie you HAVE to pay it as a condition of the loan....thus its not included in the TOTAL CREDIT figure.

Same with the ACCEPTANCE FEE.


There is nothing non compliant about the agreement as far as I can see,and stephensons would have picked up on it if there was.

The part they are going for is the indemnity clause ? which can be an illegal term of contract holding a part of the charge for credit to the end of the loan without it being repaid, so it becomes due after the loan is repaid, plus interest stacked up over the whole period. The purpose being you think u finished paying and they say now you have to pay the Acceptance Fee (just for example) of £235, which with interest is now £5k (exaggerating probably) and you say oh **** and take out another loan to pay it...and so on and so on.

I think - confirm if thats what stephensons have told you about it.


Also...tell me exactly what you are trying to do with this agreement, what the current situation is with regards repayment etc. I have the redemption statements they sent you - did anything happen with this or was it just for info. What outcome do you want to acheive.

Then I'll be a bit clearer as to the objectives.

[thephoenix]

Re: thephoenix v welcome finance

The agreement was a secured loan on a property that was repossessed. The sale of the property went for less than than the amount owed on the mortgage (Platform), hence shortfall. Now the welcome secured loan was secured on that property but there were no monies left to pay them. The indemnity Insurance on the loan was supposed to cover for this but in their T&C's, it states that the insurance will only cover us if THEY foreclose on the security. :devil:

Seems an unfair term if you ask me. We are not paying them at mo and haven't since Oct 2006, so interest is piling on.
PPI for 5 years cover, we didn't know this, didn't actually wont this to be fair, the term of loan is 15 years. So you see PPI gonna be very expensive if you have to take out 3 concurrent policies to cover the loan term.

Know regarding the prescribed terms of the agreement, from what I have read under the regulations I have listed, it does not adhere to them at all. One simple point, it's a secured loan and should have on the agreement "REPOSSESSION.......YOUR HOME MAY BE AT RISK IF YOU DON'T KEEP UP WITH PAYMENTS BLAH BLAH....", thats not on our agreement.
To Many example's to list.


CCA 1974
60 Form and content of agreements
(1) The Secretary of State shall make regulations as to the form and content of documents
embodying regulated agreements, and the regulations shall contain such provisions as
appear to him appropriate with a view to ensuring that the debtor or hirer is made aware
of—


THE REGULATIONS IN QUESTION BEING THE ONES BELOW


.....and this is what Stephens have mentioned:

Issue's that stephensons have stated to the appeals section of LSC:

"......who have good prospects of establishing that the agreements are unenforceable on appeal due to the misclassification of a so-called 'mortgage indemnity fee' as a charge for credit rather than as credit. As you will recall the opinion of Anthony Scrivenor QC in the analogous case of Griffiths v welcome financial services, leading council considered that such an action would probably be unsuccessful at first instamce but that there would be good prospects of an appeal succeeding."

Regarding the total amount of loan, what does this seem to amount to?
Your last monthly payment will be the amount required to repay the balance of the Total Amount of Loan and interest then remaining unpaid.

[thephoenix]

Re: thephoenix v welcome finance

..............although this makes an interesting read:
http://www.opsi.gov.uk/si/si1989/Uksi_19890869_en_1.htm :rolleyes:

[Amethyst]

Re: thephoenix v welcome finance

Exemption of certain consumer credit agreements by reference to the number of payments to be made by the debtor
3.—(1) The Act shall not regulate a consumer credit agreement which is an agreement of one of the following descriptions, that is to say—

(c) a debtor-creditor-supplier agreement for fixed-sum credit to finance a premium under a contract of insurance relating to any land or to anything thereon where—

• (i) the creditor is the creditor under an agreement secured by a land mortgage on that land which either is an exempt agreement by virtue of section 16(1) of the Act or of article 2 above, or is a personal credit agreement which would be an exempt agreement by virtue of either of those provisions if the credit provided were not to exceed £15,000;

• (ii) the amount of the credit is to be repaid within the period to which the premium relates, not being a period exceeding 12 months; and

• (iii) there is no charge forming part of the total charge for credit under the agreement other than interest at a rate not exceeding the rate of interest from time to time payable under the agreement mentioned in head (i) above,

and the number of payments to be made by the debtor does not exceed twelve; and in this sub-paragraph "payment" has the same meaning as it has in paragraph (1)(b) above;


(5) The rate mentioned in sub-paragraphs (a) and (b) of paragraph (1) above is the higher of the following, that is to say—

• (a) the sum of one per cent and the highest of any base rates published by the banks named in paragraph (6) below, being the latest rates in operation on the date 28 days before the date on which the agreement is made; and

• (b) 13 per cent.

(6) The banks referred to in paragraphs (1)(c) and (5)(a) above are—

• Bank of England

• Bank of Scotland

• Barclays Bank PLC

• Clydesdale Bank PLC

• Co-operative Bank Public Limited Company

• Coutts & Co.

• Lloyds Bank PLC

• Midland Bank Public Limited Company

• National Westminster Bank Public Limited Company

• The Royal Bank of Scotland p.l.c.

• TSB England & Wales public limited company.

That bit ? Anyone fancy putting in English ?

I think its saying insurance can be included in the total charge for credit figure if the agreement for those banks is for under 12 months repayment ? and the total credit given will be paid back within those 12 months ? blluuurghhhh what lol

Ummm your insurances are for a shorter period than the total repayment period of the claim and Welcome isnt in the exemptions.

I think Wheres me coffee?

[thephoenix]

Re: thephoenix v welcome finance

That bit ? Anyone fancy putting in English ?

yeah that bit and errrr NO.

I'm not legally qualified or that good at understanding ALL the legal jargon but reading the various acts regarding regulated credit agreements, they seem to contradict each other half the time..... or is that just me....I'll have 1 sugar if your making :carrot:


Spoke to stephensons and i mention the consumer credit (agreements) regulations 1983 and they agreed that the agreement should conform to the prescribed terms. If that's the case, surely they would have a better chance in court using that angle.
I don't know, these bloody solicitors like making thing difficult. ££££££££££££

[Amethyst]

Re: thephoenix v welcome finance

As far as I, and Tools, can tell it does conform to the prescribed terms. I'm not sure about your home is at risk bit - you got the part where thats specified handy ?

Oh that reminds me have you a copy of your contract with stephensons ? Andrew was going to send me one but hasnt yet.


oops forgot your coffee....two tics

[thephoenix]

Re: thephoenix v welcome finance

The Agreements Regulations are made pursuant to section 60(1) CCA. This requires the Secretary of State to make regulations as to the form and content of documents embodying regulated consumer credit or consumer hire agreements, with a view to ensuring that the debtor or hirer is made aware of:
• the rights and duties conferred or imposed on him by the agreement;
• the amount and rate of the total charge for credit (in the case of a consumer credit agreement);
• the protection and remedies available to him under the Act; and
• any other matters which, in the opinion of the Secretary of State, it is desirable for him to know about in connection with the agreement.
Section 60(2) provides that such regulations may in particular require specified information to be included in a prescribed manner in agreements.
By virtue of section 61(1), a regulated consumer credit or consumer hire agreement is not properly executed unless:
• a document in the prescribed form, containing all the prescribed terms of the agreement and conforming to regulations under section 60(1), is signed in the prescribed manner by the debtor or hirer and by or on behalf of the creditor or owner;
• the document embodies all the terms of the agreement, other than implied terms; and
• the document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible.
Section 61(2) makes additional provision in relation to agreements secured on land, to which section 58(1) applies – see below. Such agreements are not properly executed unless these requirements are observed.


The Consumer Credit (Agreements) (Amendment) Regulations 2004
http://www.opsi.gov.uk/si/si2004/uksi_20041482_en.pdf

Consumer Credit (Agreements) Regulations 1983 as amended by the 2004 Amendment Regulations ( OFT report on the above regs )
http://www.oft.gov.uk/shared_oft/rep...it/oft786a.pdf


5.10 What about agreements secured on land?

The 2004 Regulations introduce a new requirement at Sch 2 para 3, applying to all credit agreements which are secured on land. This requires the following statement under the heading ‘YOUR HOME MAY BE REPOSSESSED’ – ‘Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it’.
The statement must appear in all regulated consumer credit agreements secured on land. This includes equity release mortgages and s58(2) agreements – see Q14.5. Where s58(1) applies, the statement specified in Sch 2 para 1 is also required – see Q5.14.

[thephoenix]

Re: thephoenix v welcome finance

Had a letter from the LSC regarding the appeal for legal aid, they state that they have sent them to the Public Advisory Panel for a decision on significant wider public interest and in the event of a favourable decision, cases can be funded even where they do not satisfy the strict costs benefit matrix.

Sooooooo with a bit of luck we may see light at the end of a potentially long long tunnel.

:guyfawkes::fireworks:

[thephoenix]

Re: thephoenix v welcome finance

Got a lovely letter out of the blue from welcome finance the other day. They say due to our financial circumstances, they are willing to accept a token payment on the account. Nice people....

Are they feeling uneasy????? or just complying with the Consumer Credit Act?????
mmmmmmm I wonder.

It's been quite a while now since I had any kind of account statement from them.

Although the letter they send only had the account number on it, no reference to the amount owing or payments made.

[thephoenix]

Re: thephoenix v welcome finance

UPDATE:

Had a reply this morning from the (PIAP) Public Interest Advisory Panel.

The panel noted the applicants argument that the mortgage indemnity fee (classed as a charge and contained within the credit agreement) had been misclassified and was in fact part of the credit.

The panel considers that if that argument were to succeed, it would render like agreements unenforceable. Not only would it benefit other individuals who are affected, but more importantly to potential borrowers that would enable them to understand the true cost of the credit being offered.
The panel is therefore satisfied that this case has a significant wider public interest.



So thats the responce from the advisory panel, it will now be returned to the LSC for a decision on whether funding will be granted.

[thephoenix]

Re: thephoenix v welcome finance

Well.......had our reply from the LSC (Legal Services Commission) this morning.

They have granted us legal aid to fight Welcome Finance....yeyyyyyyyyyy

yeyyyyyyy indeed, until I read the next line, we will have to pay £56.11 from our income every month until the certificate is discharged.

So with Stephensons Solicitors estimating this case could take as long as 3 years, which will included going to court of appeal etc, this so called legal aid could cost us £2019.96 .

Yes it will be less than actually continue to pay welcome but thats not the point, legal aid is legal aid.

**** ******s *******s didn't think I could feel worse but hey ho!!!!!!!!