Welcome Finance PPI and Mr Z ** SUCCESSFUL OUTCOME **

[MrZ]

Is your logic that s69 interest is, in effect, the court's equivalent of restitution? Therefore, if you asked for both, you'd be asking for the same thing twice - albeit at markedly different rates.

 

I think thats where I was getting confused. Restitution as opposed to damages.

[MrZ]

The decision in the case of Sempra Metals Ltd v Commissioners of the Inland Revenue [2008] 1 AC 561 has changed the law relating to interest on late payment in respect of claims for damages. To claim Interest it must be particularised and proved (subject to the rules of remoteness and mitigation). It is important to consider whether or not there has been a breach of contract and that there has been a specific interest loss. To claim that loss details do have to be provided in the particulars of loss and in most cases it is also advisable to claim statutory interest as an alternative.

 

The above found here: http://www.stephens-scown.co.uk/news-archive/185/interest-claims-in-contractual-disputes

[MrZ]

My claim has been filed with the local court today. They tell me it could take at least 2 weeks before it is issued. That means I have two weeks to review my POC. It also means that I can include the aspect of unfair charges and the MIF if I decide to as the time alotted in my LBA will have elapsed.

 

Not a word from Welcome regarding my CPR 31.16 for underwriting sheets.

[steven4064]

Is your logic that s69 interest is, in effect, the court's equivalent of restitution? Therefore, if you asked for both, you'd be asking for the same thing twice - albeit at markedly different rates.

Exactly

I think thats where I was getting confused. Restitution as opposed to damages.

There is not a great deal of difference in practice (nor really in principle). Restitution is a legal principle where a party acts wrongly. This wrongdoing may have two effects: the wrongdoer may profit from their wrongdoing or another party may suffer loss (damage), or both as in the case of unlawful charges. Restitution demands that, as far a possible, things should be put back as they were before the wrongdsoing occurred - unlawful profits must be given up, damages repaid.

 

In the case of a financial company (like welcome) both of these can be represented by compound interest: the financial company has taken money from another (you in this case) and has made an unlawful profit by lending that money to a third party at interest. The compound interest charged to that third party represents the unlaful profit. On the damages side, to replace the money unlawfully taken by the financial company, you would have had to borrow the money from someone else at interest. The compound interest you would have been charged represents your damages.

 

Making the company pay compound interest to you sets both of these right and things are put back as they would have been had the comapny not charged you unlawfully. Simples.

 

Both of these aspects are covered in Sempra

[MrZ]

Exactly

There is not a great deal of difference in practice (nor really in principle). Restitution is a legal principle where a party acts wrongly. This wrongdoing may have two effects: the wrongdoer may profit from their wrongdoing or another party may suffer loss (damage), or both as in the case of unlawful charges. Restitution demands that, as far a possible, things should be put back as they were before the wrongdsoing occurred - unlawful profits must be given up, damages repaid.

 

In the case of a financial company (like welcome) both of these can be represented by compound interest: the financial company has taken money from another (you in this case) and has made an unlawful profit by lending that money to a third party at interest. The compound interest charged to that third party represents the unlaful profit. On the damages side, to replace the money unlawfully taken by the financial company, you would have had to borrow the money from someone else at interest. The compound interest you would have been charged represents your damages.

 

Making the company pay compound interest to you sets both of these right and things are put back as they would have been had the comapny not charged you unlawfully. Simples.

 

Both of these aspects are covered in Sempra

 

Thank you for taking the time to break this down in such a terse way. I have read the very long case and admittedly much of it went over my head as I didnt have access to all the various cases and decisions referred to in it. I gathered the basic principles in it but much of it is still out of my depth.

 

I will say, I trust the excellent advice given so far, and my questions are more for my own understanding and clarity rather than to question or dispute what has been stated in the advice given.

 

Thanks again!

[crocodiles]

Best of luck Mr Z,

 

I'll be watching your case with a great deal of (self) interest, lol.

That is one very long and detailed thread you have, but a very good, if difficult, read.

It will take a few re-reads to get my head around it all but you have gathered a wealth of information.

More power to your elbow sir!

[MrZ]

Best of luck Mr Z,

 

I'll be watching your case with a great deal of (self) interest, lol.

That is one very long and detailed thread you have, but a very good, if difficult, read.

It will take a few re-reads to get my head around it all but you have gathered a wealth of information.

More power to your elbow sir!

 

Glad youre along for the ride. There is alo of info here, thanks to other caggers. You'll have to overlook some of my ramblings with regard to some of the concepts, I'm not the brightest bulb in the chandelier!

 

Hopefully the thread will help others such as yourself. I will certainly keep everything up to date, so others wont have to struggle as much as I have.

[MrZ]

Have had an interesting letter from Welcome today regarding my claim for charges. I will be scanning it up and posting it shortly. At first glance it looks as though they have copied and pasted a few bits. They "respond" to issues I never raised, and they completely ignored my request for information relating to the MIF. Curiously they address undisclosed commissions. I never once in my letters said anything about "undisclosed" commissions. I did ask for information relating to Welcome Elite Brokers and I also asked about the policy for which the MIF was allegedly supposed to be used to purchase.

 

There have been other letters like this from them where they mention issues I did raise, almost as if they are trying to cut off any potential claims. Scanning and posting in 2 tics.

Edited June 2, 2011 by MrZ

[MrZ]

For the sae of anonomity, I have decided to copy and paste the relevent sections of the letter. I have removed only parts that could be used to identify my case, and I have removed the exact amounts in question and replaced them with "xxxx".

I have reviewed the schedule of fees you wish to claim. Unfortunately, you included default interest and skip trace fees in this list. I confirm these are non-refundable.

 

Following my review I can confirm that your account has incurred fees totalling £XXXX to date. Of these fees I have found £XXXX have been applied to the account without being fully justified.

 

These fees were incurred as a result of the sporadic nature of contractual payments being received from you by WFS. Fees are incurred as a result of WFS having to undertake collection activity on our customer's accounts, said fees would have been detailed to the customer at the time of taking this loan out with WFS.

 

Since the fees are applied on a specified event as outlined in our terms and conditions and not, in fact, on a breach of contract, they are designed to represent and be proportionate to our expenses incurred and are a genuine pre-estimate of loss suffered by us, then we believe that, accordingly, the fees cannot be considered to be penalties and / or unenforceable.

 

Regarding your belief that the fees are allegedly disproportionate in relation to the actual loss suffered by us, we would refer to the case

Dunlop Pneumatic v New Garage [1915] AC 79

, which states that a penalty would only arise:

 

"If the sum stipulated is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach."

 

We would be entitled to recover the full balance of the agreement if our customer failed to make payment to the account. Consequently any fees applied to the account cannot be disproportionate when compared to what we would be entitled to recover as a result of our customer's breach of contract.

 

I am pleased to confirm I have refunded £XXXX worth of fees onto your account. The refund was made onto the account due to heavy arrears outstanding on your account and due to the fact that you have not paid the fees.

 

Finally, we note your comments regarding allegedly undisclosed commission payments, which you purport, were made during the course of applying for finance. We further note what we assume is a reliance on Wilson and another v Hurstanger Limited. We would respectfully suggest that the principles in Hurstanger should not be liberally applied simply because you believe that an instance of agency has arisen, as you have quite clearly done. Only relationships between brokers and lenders which are properly characterised as fiduciary agencies are affected by the decision in Hurstanger. You have, however, provided no evidence to support your assertion that a fiduciary relationship exists or existed between you and us. You must prove with evidence the existence of such a relationship before we could consider this point further, and at this time this is something you have failed to do.

 

We note that you appear to have given no consideration as to whether we are the agents of the borrower or the lender. We are sure you appreciate that there is a long line of authorities which make a clear distinction between the two, and suggest that you might wish to reconsider your position here, particularly given the judgement in

Branwhite -v- Worcester Works Finance Limited [1969] 1 AC 552

, which states that there is no "blanket rule" which can be applied in all circumstances, but rather that each case will depend on the facts specific to each case. We believe that this is of singular importance, since in cases where the broker is acting as an agent of the lender a fiduciary relationship will not arise, and as a consequence Hurstanger will not be applicable.

 

Notwithstanding the above, if you have any further authority you wish to rely on, please forward it to the above address msrked for the attention of the compliance department, which for the avoidance of doubt is also the address for the service of legal documentation, should you wish to go down this route.

Please accept this letter as our Final Response to the new issues you raised (fees and commission). If you are not happy with my decision you may send your complaint to the Financial Ombudsman Service (FOS). If you want to send your complaint to the FOS you must do so within six months from the date of this letter.

Thats the bulk of the letter. I will comment in the next post.

Edited June 2, 2011 by MrZ

[rebel11]

Thread moved.

[MrZ]

Aside from the rest of the nonsense they have spouted, the amount of fees they have been so pleased to refund, is only 1/3 of the amount I claimed. I claimed the total of the fees, plus the interest the fees have attracted. I didn't claim statutory interest or ask for any other form of restitution. It was very nice of them to apply the 1/3rd payment toward the disputed arrears. Especially considering I specified the money should be refunded to me. They didn't account for interest either. They haven't said which fees they have found to be unjustified. I wont go away so easily.

 

I think I will be reviewing in full the cases cited, and work on my counter. The fact that they are refunding anything is indicative that they know they are in the wrong. I will not be appeased by 1/3rd though. I will already be in fast track with my PPI claim, and I am beginning to think more and more that I should now add the charges and MIF aspects to the claim as well.

 

Opinions anyone?

 

EDIT: Also I never once mentioned any case law or provided any basis for my requests. The letters i initially sent were

 

1. A claim for unfair charges

2. CPR request for info regarding the MIF

3. LBA when 1 and 2 went unanswered

 

Its curious that they assume I am relying on a particular case. Makes me wonder how often "guests" visit the forums. I suppose it could be that some CAGers are taking snippets of certain posts and using those snippets to make a claim against creditors.

 

At any rate they are refunding something, and even though I don't accept their response, its obvious they are on a back foot.

Edited June 2, 2011 by MrZ

[MrZ]

Thread moved.

 

Thanks rebel!

[citizenB]

Sadly we know there are "stalkers" from the Credit industry on the forums, MrZ

[MrZ]

I guess Welcome didn't like my 1.00 payments HA! I have received a letter stating that I have arrears, and if I don't contact them within 7 days to make a payment arrangement, they will issue a default notice. Also they say this action is because I have not been in contact with them. Really?

 

Anywho, I have had confirmation from the court that the claim form has been processed, but there is no date or hearing info yet showing in the system. I am told that within the next 7 working days the notification of the claim and hearing date etc should be sent out to both parties.

 

I intend to respond to this recent letter reminding Welcome that the account is in dispute, and that it now the subject of legal proceedings. Does anyone have any suggestions on anything I might want to include in this letter? I aim to have it in the post NLT Friday the 17th.

[steven4064]

No, I would just keep it simple "with regard to your letter of [date], please take notice that this account is in dispute and is now the subject of legal proceedings. Any enforcement action taken by you whilst the account remains in dispute will be reported to the court." or words to that effect

[MrZ]

Thanks Steven,

 

Thats almost word for word what I had written already. I will keep it simple as you suggest and put it off in the post tomorrow.

[citizenB]

Yes, keep it simple, remember how they got confused with the last letter you sent them lol

[MrZ]

I finally have a claim number now.

 

I now have to finalise my POC and send them to Welcome and file a certificate of service with the court. At the moment I am leaning toward including the MIF as part of the claim. The reasons 1.) Its been so drawn out to get this far and since I am already beyond the 5k limit for small claims, it doesnt matter that it adds to the value of the claim. 2.) I view the MIF as aninsurance product and the claim is for mis sold insurance 3.) By including it as part of the claim I would be entitled to disclosure

 

Does anyone have any comments about this? The issues of concern are 1.) Including the MIF could distract or complicate the claim for PPI for which I have an admission of mis sale. 2.) If Welcome dont want to open up a can of worms they may be willing to fight the claim more agressively because of the MIF, and if I lose, I could be exposed to significant costs. 3.) The MIF is such a grey area in and of itself, I am not sure what case law or statute I would be best to try to stand.

 

Advice as always is appreciated!

[postggj]

ill dig out my files on this mif con from welcome

 

where wecome fall foul is

 

the mif is an insurance policy

 

SO WHERE IS THE POLICY DOCUMENT AND WHO UNDERWRITES THAT POLICY ???

 

ANSWERS ON A POSTCARD

 

(HUSH HUSH, ITS WELCOME ELITE BROKERS)

 

DO A PART 18 REQUEST FOR THE UNDERWRITING SHEET

[MrZ]

ill dig out my files on this mif con from welcome

 

where wecome fall foul is

 

the mif is an insurance policy

 

SO WHERE IS THE POLICY DOCUMENT AND WHO UNDERWRITES THAT POLICY ???

 

ANSWERS ON A POSTCARD

 

(HUSH HUSH, ITS WELCOME ELITE BROKERS)

 

DO A PART 18 REQUEST FOR THE UNDERWRITING SHEET

 

This is my thinking too. I did a part 16 request for it, received nothing. Not even an acknowledgement that they got the request. As I havent filed my POC, can I still do a Part 18? I intentionally didnt submit the POC with the claim form to allow myself more time to investigate. I have until the end of June to file my POC. I'm trying to figure out the best way to approach the MIF aspect without shooting myself in the foot.

 

If you can contribute anything with regard to the MIF that is useful I would be ever so grateful.

[postggj]

give me the weekend on this:wink:

[steven4064]

If you have not filed your POC, the correct way to go about this is to use CPR 31.16. You need to make an application on a N244 attaching a witness statement and pay a fee. The court will hear the case and then issue you with a court order for the underwriting sheet - this is what I did to get mine.

 

Part 18 is to get additional information once a case is started but the process is essentially the same. The problem is that, if you start the case (ie file the POC) without the information, you may not get the chance to issue a part 18 as the defendants might move to have the case struck out under CPR3.4(2)(a) as showing no reasonable grounds. Remember, it is for the claimant to demonstrate the case. Therefore, the "correct" way to do this is to get an order under CPR31.16 for the underwriting sheet and then use that to build your POC.

 

Believe me, the underwriting sheet is worth getting - it is really incriminating. The one I have shows that they made 660% profit on the personal accident plan (premium=£175, cost to Welcome £23), 288% profit on Lifecare 24 (premium £195, cost £50) and 82% on PPI (premium £585, cost £320). The average profit on the whole thing was 142%. Given that they told me none of this at the time, it clearly shows unlawful profit and secret commission (and case law says that is fraud).

[MrZ]

give me the weekend on this:wink:

 

Thanks for the help!

[MrZ]

If you have not filed your POC, the correct way to go about this is to use CPR 31.16. You need to make an application on a N244 attaching a witness statement and pay a fee. The court will hear the case and then issue you with a court order for the underwriting sheet - this is what I did to get mine.

 

Part 18 is to get additional information once a case is started but the process is essentially the same. The problem is that, if you start the case (ie file the POC) without the information, you may not get the chance to issue a part 18 as the defendants might move to have the case struck out under CPR3.4(2)(a) as showing no reasonable grounds. Remember, it is for the claimant to demonstrate the case. Therefore, the "correct" way to do this is to get an order under CPR31.16 for the underwriting sheet and then use that to build your POC.

 

Believe me, the underwriting sheet is worth getting - it is really incriminating. The one I have shows that they made 660% profit on the personal accident plan (premium=£175, cost to Welcome £23), 288% profit on Lifecare 24 (premium £195, cost £50) and 82% on PPI (premium £585, cost £320). The average profit on the whole thing was 142%. Given that they told me none of this at the time, it clearly shows unlawful profit and secret commission (and case law says that is fraud).

I will follow this advice. In the n244 will I simply say "request made under CPR 31.16 that the defendant provide the underwriting sheet relating to agreement number xxxx?"

Do I need to give any reasons why I am making the request? Will I need to make a draft order?

 

On another note, I read a case heard in the High Court regarding Welcome and the MIF. In the case Welcome openly admit that there is no insurance policy. Their contention was that the MIF is simply a fee that they charge as a result of lending to a sub-prime consumer. Now in my case, I was specifically told by the agent who came to my house that the fee was for "insurance against the property". It was never explained that it was atracting interest. It is not listed as part of the amount for credit, and on the face would be understood by me the consumer not to attract interest. I realise that I cant argue anything relating to it being a charge for credit as opposed to the amount of "credit", but it seems to me that their are grounds for misrepresentation or unfair terms. Not sure how to approach this though.

 

EDIT:

Based on the fact that I have 14 days to serve the POC, it is unlikely that I would receive any docs under a CPR request in time to include anything within the POC as result of the docs obtained. Assuming this is correct, What are my options for including something very general about the MIF, say for example concentrating on the misrepresentation or unfair terms? Then, if after the underwriting sheet is obtained ammend the POC if needed? Wont it also be to my benefit that I already made a request for this in writing,which was ignored by Welcome, prior to issuing my claim?

Edited June 23, 2011 by MrZ

[steven4064]

It is best to provide a draft order, I didn't but the court was obviously expecting one - the judge typed it himself there and then. You need to provide a witness statement to accompany the N244. This is the one I used (slightly modified for your circumstances and to reflect my better understanding following the hearing:

IN THE [TOWN] COUNTY COURT

IN A PROPOSED ACTION

 

BETWEEN

 

steven4064

Claimant

 

AND

 

WELCOME FINANCIAL SERVICES LIMITED

Defendant

 

 

 

-------------------------------------------------------------------------

 

WITNESS STATEMENT OF steven4064

 

-------------------------------------------------------------------------

 

 

 

1. I, steve4064 of [address] took out a loan with Welcome Finance Services Ltd of Mere Way, Rudgate Fields Business Park, Ruddington, Nottingham, NG11 6NZ with agreement number xxxxxxxxx (“the Agreement”) and signed on [date].

 

2. The loan consisted of a cash advance of £x plus £y for 3 insurance policies I was persuaded to take out at the same time.

 

3. The 3 insurance policies (Personal Accident Plan, Lifecare 24 Life Insurance and Optional Payment Protection Insurance) were all administered by Direct Group Limited of Direct House, White Rose Way, Doncaster, DN4 5NU, and underwritten by Norwich Union Insurance Limited (now Aviva) whose registered office is at St. Helens - 1 Undershaft, London, EC3P 3DQ. The defendant effectively acted as agent for the provision of these policies.

 

4. The loan agreement, which was an agreement regulated by the Consumer Credit Act 1974, shows the principal associated with the cash advance and of the 3 insurance policies separately, the total charge for credit (consisting of an acceptance fee and interest charges), the repayment terms and the APR. It does not show any commissions relating to the sale of the insurance policies.

 

5. I have asked the defendant to provide me with information regarding commissions paid or received but none have been provided.

 

6. Given the chain of companies involved in this sale, it is inconceivable that no commission was paid.

 

7. I therefore contend that the principals of the loans for the insurance contain hidden commissions contrary to the Common Law (Wilson & Another –v- Hurstanger Ltd, [2007] EWCA Civ 299 and Imageview Management Ltd –v- Kelvin Jack, [2009] ECA Civ 63) and which render the agreement void.

 

8. Further, since any commission should form part of the total cost of credit rather than the principal, the loan amount (principal), total cost of credit and APR, which are all terms prescribed in Schedule 1 of the Consumer Credit (Agreements) Regulations 1983, are all therefore incorrect. Without prejudice to paragraph 7, these terms being incorrectly stated makes the agreement improperly executed under s61 of the Consumer Credit Act 1974 and therefore unenforceable.

 

9. There is good reason to believe that Welcome Financial Services Ltd has acted unlawfully with respect to the Agreement.

 

10. I therefore respectfully request the court to grant an order pursuant to CPR Part 31.16 requiring Welcome Financial Services Ltd to provide a copy of the underwriting sheet or other such document that detail the commission paid and received in relation to the Agreement.

 

I believe that the contents of this Witness Statement are true.

 

 

Signed:

 

 

Dated this day of 2011.

 

a draft order may be something like:

IN THE [TOWN] COUNTY COURT

Claim No: xxxxxxx

 

BETWEEN

 

steven4064

Claimant

 

AND

 

WELCOME FINANCIAL SERVICES LIMITED

Defendant

 

 

 

-------------------------------------------------------------------------

 

ORDER

 

-------------------------------------------------------------------------

 

This order is made on this day of 2011

in the [Town] County Court at [Court address]

 

UPON the application made by the Claimant being heard on [date of hearing]

 

IT IS ORDERED that:

 

1. Within 14 days fo the date of this order, the defendant shall file and serve a copy of the underwriting sheet associated with agreement number xxxxxxxxx between the Claimant and the Defendant.

 

2. The defendant pay the Claimant's costs in the amount of £xxx.

 

You also need to prepare (and eventually file and serve) a schedule of costs. You can serve it by giving it to the Defendant's solicitor just before the hearing (if they turn up that is - otherwise you tell the judge you brought schedule to give to the defendant, but as they are not here....)

 

EDIT

 

Just looked at your edit. Why do you only have 14 days to submit a POC?

Edited June 23, 2011 by steven4064