Northern rock loan over £25,000

ajm173

Thank you for all that you are doing lennonc1 with this.

I am sure that I won't make much of a difference but I have filled out some forms to try to take this to Watchdog.

Does the fact that the FOS is government run and that NRAM is also government run mean that our cases have in fact not been treated fairly?

ajm173

I have just found this on a website:

Mistakes of fact apply when the party concerned was operating under a mistaken understanding of the facts involved in the contract.
A mistake of fact is unilateral when only one party is mistaken. A bilateral mistake of fact occurs when both parties to the contract are operating under a mistaken reality. Bilateral mistakes are also known as mutual mistakes or common mistakes.

A mistake of fact that is unilateral in nature is not normally a reason to set aside a contract or a reason that will allow a plaintiff in a civil trial to seek damages. A unilateral mistake of fact will result in an enforceable voidable contract.

For example, a contract would be voidable at Luke's discretion if Ben took advantage of Luke's unilateral mistake regarding the purchase of a painting Luke thought was genuine. If Ben did not know that Luke thought he was buying the genuine painting, then Luke's unilateral mistake would not prevent the contract from being enforceable.

A bilateral mistake would result in a contract that could be voided by both individuals in the event that Luke and Ben both believed the forgery was a genuine work by Dali. If Ben believed Luke intended to buy an artificial Dali painting, and Luke believed Ben was selling a genuine work by Dali, a mutual mistake has again been made because there was no intention to defraud and both parties made a mistake of fact.

Is our situation a "bilateral" Mistake? Seeing as we the customer signed the agreement / contract believing the wording / overall document to be correct and covered by the act and also NRAM themselves must have believed the loan was covered by the act to have plastered it all over their paperwork in the first place!

Then went on to read this:

In order for an allegation of fraudulent misrepresentation to be sustained there must be an intent to deceive on behalf of the accused party. The element of intent also requires that the deceiver must know that the information they are spreading is false or that the withholding of the information would constitute a fraudulent action.
The technical term for this intent to do wrong is known as scienter. Scienter is related etymologically to the word science. Both words refer to the possession of knowledge.

Laws concerned with fraud in contracts may find that scienter exists if one of the parties to the contract knows that one of the material facts that affect the contract in question is not true as they are stated in the contract.

Scienter is also determined by laws governing contracts to exist if one of the parties to the contract makes statements without any regard to whether the statements they utter are true or false. Laws regard this willful ignorance of the validity of the individual’s statements to rise to the level of fraudulent representation.

I am no expert by any means, but this makes interesting reading if this is correct.

Any thoughts?

kidsteruk

This is a big disapointment.

While it might not have affected our decision in taking the loan, it would have made us better consider the amount requested and taken.

Even more fustraiting is the fact that I have agreed to so many contracts and agreements where if I had not got every bit of detail correct the other party would not pay out or the agreement be deemed invalid.

Now in this case they are compensating others for agreements not being correct and even though ours are extreamly incorrect we cannot hold them to account.

Bonkers.

downhiller

Disappointing. Its as though the FOS completely misunderstand our complaint. How someone can issue a completely incorrect contract, and that is deemed OK by the FOS, is mind boggling.

I assume we can also pick and choose what parts of the contract we choose to honour...

mancpickup

Although disappointing for some reason I am not surprised. I will be asking the FOS to review my response (same as already posted). My complaint was in 2 parts:
1. That the loan should be cca regulated as per the agreement.
2. If the loan was not cca regulated that it be unenforcable from day 1 as it clearly states in the agreement that if it it is not then the loan can only be enforced if NRAM obtain a court judgement .

As the FOS have now deemed it as not regulated they seem to have forgotten the second part of the complaint.

They have also decided that CCA regulation would not have changed my mind whether I took the loan or not, I cannot belive they can make such an assumption with no evidence.

It also seems strange how the FOS response is so simular to the NRAM response.

saveupthesmiles

I am disappointed to hear about your replies from FOS and to be honest quite flabbergasted that they're being dismissive of such blatant disregard of the agreement. I've just finished my letter to FOS but my concern is if NRAM are permitted to remove the CCA protection they said we had from these loans then could they change other terms/ conditions that we've already agreed to? I wouldn't have taken out my loan had i known as I would have been worried about my protection, and not because I anticipated any problems (we've never had any so far), but because you can't predict the future. I enlisted the help of an IFA to get me a mortgage because I felt I needed someone with that additional knowledge to explain the terms and he selected this one out of the whole market; I've since found out that this was the only mortgage he sold to his customers so I feel pretty angry about the whole thing now.
I just expect that if we've agreed to something we both stick to the terms of that agreement and if that means they now have to provide a substitute version of the CCA1974 then they should do that - is that too much to ask?

claret_mike

Below is taken from FOS website.

I have highlighted in bold the bits that are important to me - If you get the response, I would be making it clear that you do not accept this on the basis that if you are perceived to have accepted it then it becomes binding. Also it is not clear how the FOS have acted fairly with it's customers so would be asking this.

key facts

It’s our job to sort out individual complaints that consumers and financial businesses aren't able to resolve themselves.
We were set up by parliament to do this – as independent experts – and our service is free to consumers.
We handle complaints about all kinds of money matters – from insurance and mortgages to savings and credit. We answer over a million customer enquiries a year and deal with more than 250,000 disputes.
We’re completely independent and impartial. This means that when we decide a complaint, we look carefully at both sides of the story and weigh up all the facts.
If we decide the business has treated its customer fairly, we will explain why. But if we decide the business has acted wrongly – and the consumer has lost out as a result – we can order it to put things right.
Depending how complicated a case is, we can sort out some complaints within just a few months. But some cases – for example, complaints about mis-sold payment protection insurance (PPI) – can take over a year.
Consumers don’t have to accept any decision we make. But if they do accept an ombudsman's decision, it's binding both on them and on the business.
We don't write the rules for financial businesses – or fine them if rules are broken. That is the job of the regulator.



From their response


Looking at what happened, I think it is unlikely that it would have made any difference to your decision to take the loan if NRAM had set out the correct position – that is the loan
was unregulated but shared some of the features of a regulated loan.
You have had the benefit of the funds from the loan and the loan has continued to operate in line with the terms of the loan agreement that you agreed to.

I completely fail to understand this point - if our agreements state that should it breach CCA rules then we are entitled to redress etc then we it clearly has not???

Ultimately, I do not get their response at all? I have not put my complaint forwards to FOS yet due to not having got round to doing it. I am wondering whether my complaint regards this will be looked at differently even if I can put different points together which counter there reasons for upholding....

Will have to have a think about this one a little further but I fail to see in a world of examples where paperwork has been misleading/unclear has led to the FOS upholding claims in favour of the consumer then this just makes it all the more baffling.

I

Evenfields

What about NRAM 'mis-selling' these over 25k loans to their customers? If they were prevented by law from lending over 25k at the time, then ALL these customers have been mis-sold. NRAM have promised customers the protection of the CCA but by law were always prevented from delivering the regulation and protection of this law. That is grossly unfair and a breach of rights afforded to the customer which NRAM had no rights to give. Has anyone complained to the FOS and mentioned misselling or unfairness? Has anyone complained to the OFT? The FOS response is a nonsense, who passed this at the FOS to be sent out en masse? How can they simply ignore and state the loan has operated in line with the terms you agreed to? Really? Well FOS if that were true then the terms state it is CCA regulated and it's not, and NRAM have withdrawn the protection. Were these customers not entitled to have correct statements which state opening balances? These loans are not operating in the same way as others identikit paperwork and t&c s for identical loans which were under 25k! There is now a two tier system but the same paperwork. Does that mean NRAM can dispense with any other CCA regulations then? Do they not have to comply with any other parts of the CCA law? That is what the FOS seems to be suggesting if they have decided they are not regulated after all! This is simply nonsense! Do these customers now have a pick and mix agreement then? If the FOS have decided they are not regulated, then to me that voids the contract. The standard CCA statement of 'this is a credit agreement regulated by the Consumer Credit Act 1974, sign it only if you want to be legally bound by its terms' says it all!

In the alternative, NRAM has acted in every other way regarding these loans as though they were covered by the CCA until this mistake was highlighted and also continue to do so. They have had many years to write to the over 25k loan customers to tell them (clearly NRAM knew and if they didn't then I don't believe that for a second) but they did nothing. They have issued statements (albeit incorrect) in line with CCA and no doubt have issued Default Notices, Default Sums notices etc etc under the act to anyone who got into arrears etc, so that could be used as evidence to closh FOS's view.


Conspiracy theory anyone??

claret_mike

NR could in theory have lent whatever amount the wanted - it is just that when you get £25000.01+ it no longer becomes protected by the CCA.

Putting aside mis-selling etc, I am very confused by how there is logic in the thinking that you can say that because technically is not within the limits of the CCA then the paperwork can say whatever it wants and the words contained within the contract bear absolutely no meaning whatsoever and they think that this is both fair and not mis-leading.

What have we lost from not having the CCA protection, what difference does it make when/if people get into financial difficulty under a non regulated v regulated loan? What is stopping NRAM treating these loans differently in the future?

There will be people who have consolidated and have gone from regulated debt to unregulated debt. There will be people that may have borrowed less to keep it regulated etc. Again, the FOS seem to have tried to deal with it in one swoop and with the response given, its almost like they have tried to simplify the issue and the answer and missed the mark.

st99015207

Hmmm - I too have received this same reply.
Very annoying as it makes certain assertions about me that were not evident from the original complaint.

It seems to be the case that if a company makes a genuine mistake in a contract then this is not a reason to find the remainder of the contract questionable - really?! try this on your car or life insurance application....I wonder who the FOS would side with in this case...

Our company solicitor thinks this is a case of misrepresentation (not mis-selling) and he thinks it stands a chance in court, but also warned about the amount of firepower NRAM would use in a test case.