"letter before action" - What is involved?

[218bhp]

Despite searching the forums for some time, I cant seem to find anything other than a link to a book/law pack that relates to a "letter before action".

 

I believe this may be the next step in my PPI claim against a bank who were un-governed by the FOS at the time the PPI was taken out.

 

Please can someone tell me exactly what a "letter before action" entails and what I stand to lose if I take a bank to court and it goes in their favour? Could they claim all of their costs from me etc ??

[pompeyfaith]

Hiya 218bhp,

 

A letter before action is basicly a letter headed in bold writing LETTER BEFORE ACTION it details that you are not happy with the responce so far and thus court action will follow.

 

You should give them 7 days to respond to an LBA.

 

If you lose then yes any costs would be payable by you this is why you must do your research first and get all ducks in a row before issuing proceedings

 

To give you some idea of what an LBA looks like I have posted mine below you are welcome to use any of it that may suit your needs or edit to suit you.

 

Date

RE: ACCOUNT NO:

LETTER BEFORE ACTION

 

Dear

 

 

I am in receipt of your letter dated ------ in which you respond to my assertion that the Cooperative Bank has Mis-Sold Payment Protection Insurance (PPI) to me when I took out the above loans.

 

I am shocked and disappointed in your continued assertions that you have conducted yourselves in a manner that is appropriate for an extremely large and well respected financial institution. I continue to assert that this has not been my experience. You have failed in your duty by selling me a product that did not suit my individual circumstances, you have failed in your duty to provide me with sufficient and appropriate information to allow me to make an informed choice when purchasing the compulsory PPI, and you have sold me a product that I assert is useless to me as pre-existing medical conditions were not ascertained by your salesperson which therefore rendered the policy useless to me as I would have been unable to make a claim on it.

 

PPI is not a compulsory product when taking out a loan, and adding PPI to my loan account in this way is a clear breach of both FSA regulations and guidelines and the Banking Code of Practice provided to the financial services industry. As a respected financial organisation, you will have been quite aware of these regulations and this makes your organisation's action even more serious. It is extremely poor business practice to say the least.

 

In taking out a loan with the Cooperative Bank, I reserved the right as your customer to receive appropriate information to enable me to take out a compulsory insurance product that suited my demands and needs. The Cooperative Bank had an obligation to me the borrower, to provide sufficient and appropriate information to enable me to make an informed decision as to the suitability of both the loan and the PPI to meet my needs and financial circumstances. I should also have been made aware of alternative options available or comparative costs of similar PPI products from other suppliers, which information as a well known financial institution, you would most certainly have had access to.

 

The Financial Services Authority (FSA) provides guidelines which your organisation should adhere to while making both Advised and Non-Advised sales. Where a Non-Advised sale takes place, as in my own case "The customer must, however, still receive sufficient information on the product to enable them to make an informed decision as to whether it meets their own demands and needs." (FSA) These regulations apply to the lender whether the sale is made face-to-face, over the telephone as in my case, or via a lender's website.

 

At no point did I receive any such information, either by letter, document or telephone call which followed the above guideline. The documents that you have provided copies of do not contain any of the information that I have outlined above and cannot, therefore, be deemed as meeting the standard of care which you should have provided.

 

I assert that I have been deprived of the right to choose PPI when taking out the loans, and that you have taken advantage of my lack of knowledge.

 

I reposed absolute trust in your ability as a respected financial institution to provide a reasonable level of care and skill in ensuring that my best interests were met when taking out a financial product with your organisation. This has not been the case and I am extremely shocked and disappointed.

 

I would further suggest that the Principles of Business which are legally binding on the Cooperative Bank under the Financial Services and Markets Act 2000 and which are contained in the FSA Handbook have not been followed. Therefore you are in breach of regulations.

 

I would remind you that the FSA takes the Mis-Selling of PPI extremely seriously and you will be aware that recent investigations by both the FSA and the Competition Commission have found that lenders continue to engage in "poor sales practices" and that "customers were not informed orally of both the monthly and total cost of their PPI". (FSA report, 30 September 2008.)

I would also draw you attention to the FSA’s latest report on the 29th September 2009 titled FSA unveils tough measures to protect PPI consumers

I request the return of all moneys paid to you for the above policies including contractual interest within 14 days of receipt of this letter by you. If you do not comply with my request, I will have no option but to escalate my claim to the FOS and/or the civil courts. I should remind you that the FOS take the issue of Mis-Selling of PPI extremely seriously and in many cases, have imposed large fines on financial institutions who are in breach of regulations.

 

Yours sincerely

 

 

 

 

Regards

 

 

PF

 

[218bhp]

Thanks.

 

I was expecting it to be a bit more "serious" than that but from the looks of it I can send a "letter before action" and still back out if required.

[pompeyfaith]

Yes you can back out of legal action but that does not look good on you as it will be just a threat.

 

If you are going to send an LBA you should really stand by the words written and carry those actions though.

 

You could always head the letter: notice of intended action.

 

That way it does not state that you will be taking legal action but puts the message across that you are not happy with their responses.

 

Regards

 

PF

 

PF

[Bosund]

Subbing as I'm trying to make my mind up wether to go down this route or complain to the FOS as although MBNA paid me back for missold PPI they not add the 8%, (contractual or simple) interest as requested, (still trying to get my head around which is which).