If the whole amount was paid to your solicitor rather than divided up by the lender, that is very similar to the Heath case so you'll need to await the outcome of the appeal. If a broker fee was added to the loan and interest charged on it then that could fall foul of the decision in Walker v Southern Pacific, however that case went to the Court of Appeal last week so you'll need to await the outcome on that one too!!

That is more marginal. In the Heath case the full loan was dispersed as a single lump sum to the borrower's solicitors (albeit that the lender knew the loan would be used for different purposes). The solicitor then decided which parts of the monies received were used for each purpose. You could argue that, in your case, if the two parts were dispersed separately by the lender, then the Heath scenario does not apply as the lender had decided which parts of the loan would be used for what purpose and you had no control over this. In short we need some more test cases in this area to define where the dividing line is. The outcome of the Heath appeal may help when it is published.

Just read this thread and, as a close follower of this area of the law with some experience of it, I thought I'd throw in my comments. Firstly there was no PPI on the loan in the Heath case - this is a very important distinction. Whereas in the Heath case the credit agreement simply showed one amount of credit, most loans that include PPI clearly show the PPI as a separate and distinct amount. In addition, some credit agreements actually state that the credit consists of two loans - a loan of the cash advance and a loan to purchase the PPI. In such cases in my view the Heath decision positively helps an argument that there is a multiple agreement. My strong advice therefore is not to give up!!

Very interesting, Goldlady! What type of loan was it? Secured or unsecured? Was it your main mortgage or an additional loan? Re finding out about the commissions, they generally will not tell you in the first instance however the loan was arranged through a credit broker rather than directly with the lender then almost invariably a commission will have been paid (in addition to any fee the broker charged you directly). If you start legal proceedings, at that point they will disclose the amount of commission paid.

Worth checking if they sold you PPI when you took out the loan - if you've been made redundant you should be able to claim on the policy. Strangely, whilst they're very keen to sell you the policy in the first place, they aren't quite so keen to tell you when you can claim. Could this perhaps be because they get a proportion of the profits made on the insurance fund?? Surely not

In the case we are currently running against GE for undisclosed commissions, at the preliminary hearing the judge asked GE's solicitors (Wragge & Co) whether GE had received any other similar claims and they stated they had not. I'd be very interested to hear if anyone has made a similar claim as I'm sure the judge will not be too pleased if GE have misled him!

Hi Frustrated I'd be interested to know how you're getting on with your claim. I'm currently running a number of similar undisclosed commission claims against GE. Jonny.

Hi Michelle. Not sure form the above when you took out your loan but I guess it was quite recently. FIRSTPLUS use an automated decision engine to determine whether or not to sell PPI. They ask a series of scripted questions, type in the answers and then the computer tells them whether or not PPI should be recommended. Ask for the call recordings together with copies of the responses that were typed into the decision engine and the result from the engine. If they have not input the correct information, you may have a claim. If they have typed in the answers you gave correctly you'll find it more difficult to argue it was missold. Did you tell FIRSTPLUS that you intended to pay off the loan after a short period? If you did, you definitely have a claim as these loans are not designed for short-term borrowing and so it should not have been sold to you.

Hi Saranev. Glad to see you're making progress with your complaint. Can I be cheeky and, if you are contacted again by the BBC, put them in touch with me? I'm an industry insider (you'll see I have a number of posts on this site helping people with claims) and there's plenty I'd be happy to share with them that I'm sure they'll find interesting!

You've certainly got a case. This is typical of this type of PPI product. The cost of the insurance is added to the loan as a lump sum at outset and you pay interest on it throughout the term of the loan. Thus, whilst you might get back your original premium after 10 years, you do not get back the interest. If you then try to cancel the insurance early (including if you pay off the loan early), you only get a small fraction of your premium back. If this wasn't explained to you clearly by the salesman, you'd have a good case with the Ombudsman. These companies know that the vast majority of lenders will pay off their loans early and that is how they make their money - through early settlement charges and low refunds on PPI. Make a formal complaint and make it clear you will go to the Ombudsman if you don't get a fair result. Both the early settlement charges and the low rebate on the PPI are likely to be chalenged by the Ombudsman and Paragon will know this.

You'll get a copy of your credit agreement anyway if you make a subject access request. You could have a number of claims here. Did you take out the loan directly with FIRSTPLUS or through a credit broker? The sales call will have been recorded so, if you were told that PPI was a requirement of the loan and to falsify your income, they should have a recording of this. Make sure you ask for recordings of the calls as part of your subject access request. Also if you ask for an account statement this should show all the interest you have paid on the loan and PPI.

Hi Paul, FIRSTPLUS joined GISC, from memory, some time in 2001 so you may well be able to go to the Ombudsman. It's certainly worth a try - FOS will tell you if they think it's outside their jurisdiction.

Tagal - sounds like an admission of guilt to me by the insurers, though they'll probably try to argue it was the broker's responsibility to give you the information. The Ombudsman will sort it out for you. I'm surprised they're letting it go that far! Lilal - The Ombudsman is unlikely to be very sympathetic to the insurer or broker. This is such a material term, I suspect FOS would expect it to have been specifically drawn to your attention at point of sale, not left to documents that are generally issued after the sale has been made.

Undoubtedly this should have been made clear. I can't recall when you took out the plan but, if it was aftert January 2005 you should have been given a "Key Facts" document before you took out the insurance that made this clear. The Ombudsman would certainly consider this to have been a material restriction of the policy that should have been brought to your attention at point of sale. If it was not, you should have a pretty water-tight case. Even pre Jan 2005 you should have been issued with a policy document that would tell you this.

This is pretty standard for this type of loan. Generally the PPI will only cover you for between 5 - 7 years. The cost of PPI over a longer period would be even more prohibitive!

Hi Cokezero, Yes, the UTCCRs apply to loans of any size if the charges are unfair - and certainly the view of the Ombudsman seems to be that charges calculated using the Rule of 78 method are unfair.

Tagal, You should still be able to go to FO on a couple of fronts. If loans.co.uk was a member of the GISC at the time (which is likely as most firms joined around 2001) FO still has jurisdiction. Also FO now has jurisdiction over loans following an amendment to the Consumer Credit Act in 2006. Definitely worth a try!

Hi Wills7 If you were clearly told that the PPI was compulsory and have evidence to support this, you have an excellent case for arguing the whole loan is legally unenforceable. The reason for this is that, for regulated loans (ie loans up to £25k) taken out prior to April last year, if they are not documented in a prescribed format, they are legally unenforceable. If PPI was a condition of the loan then it should have been documented as part of the Total Charge for Credit rather than as part of the loan. Your post indicates it was documented as part of the loan. If you can prove you were told the PPI was compulsory, I'd go back to WF and say you will challenge the enforceability of the agreement under the CCA.

In a perverse way, it's good news that the loan was taken out pre 2005. Ask for a settlement quote and when they try to hit you with settlement charges using the Rule of 78 method, challenge them stating that this is an unfair penalty under the Unfair Terms in Consumer Contracts Regs. Say unless they remove the charges you will go to the Ombudsman. I doubt they would want the Ombudsman to look at the case so you may be able to repay the loan without incurring any penalty charges. At least you can then move somewhere else!

Hi Frode. Sorry to hear about your problems. FIRSTPLUS has been steadily putting up the interest rates on their existing loan book while still advertising low rates for new customers. This is an old trick (I think some of the building societies got a hammering for it a couple of years ago). The difference with this type of loan however is that, if you try to move elsewhere, you invariably get hit with early settlement penalties. When was the loan taken out? if it was taken out before June 2005 the penalties on early encashment would be based on the old method called the Rule of 78. If they tried levying these you could claim they were illegal under the Unfair Terms in Consumer Contracts Regulations - the Financial Ombudsman might well support this. Did you take out payment protection insurance with the loan? If so, you might be able to claim something here also if they offer you a low rebate for cashing it in. Surfer01 - You may have similar claims and again the Financial Ombudsman might help, particularly if you paid the £48k in good faith based on a representation made by a FIRSTPLUS employee. Was that the case?

You definitely need to check that out. Contact FIRSTPLUS and ask for copies of all papers related to all loans for your customers - if they have had a previous loan, I suspect there is more that they could claim because of the settlement charges effectively being added to the new loan and further interest then being charged on them! I very much doubt that this would have been made clear. Taking out the new loan would have meant cashing in any existing PPI (with the consequent low rebate) and the deferrment of the "cashback" entitlement under the PPI for another 5 years. Go get 'em. Happy to provide any help I can.

Happy to post it on the forum but couldn't see any details of Frode's problem in the thread!

I'm not sure it is as simple as that. It may depend on when you took out the loan. Before Loans.co.uk were fined by FSA they gave advice on PPI however after the fine they stopped giving advice and moved to giving "information only", ie they would give you details of the PPI but not tell you whether or not you should buy it (at least that is the theory!). If they simply gave you information without making a recommendation and you chose to buy it, you may struggle to make a claim. Can you recall whether or not they specifically recommended you take out PPI? It's always worth threatening to go tothe Financial Ombudsman as it costs you nothing to do so, however the firm you are claiming against has to pay (even if they win the argument), so it's an added incentive for them to settle the claim early.

Hi Frode Drop me a line wit the details. I have an in depth knowledge of FIRSTPLUS - I may be able to help

Hi Goldlady. I'm a former industry insider and have a detailed knowledge of secured lenders. There are a number of lines you could take on this. When were the loans taken out? When the first loan was paid off to take out the second loan, your customers would have incurred early settlement interest charges as well as a low rebate on the PPI. These costs would effectively have been added to the new loan, thus increasing the debt. I would suggest that you add that the implications of this were not made clear, nor were the effects of this on the customer's entitlement to the "cashback" element of the PPI arrangement ie this is deferred for another 5 years.