Reclaim CPP article discussion

Bill-K

Hi all - MSE newbie here, but I have been active elsewhere helping peeps with PPI & CPP etc. I need to put my story across here in the MSE Forum, because I believe it should be seen by as many CPP/AI claimants as possible - as well as by MSE Admin.

The Financial Conduct Authority (FCA) directed that the firm 'CPP Limited' negotiate a 'Scheme of Arrangement' with them, after declaring that all Card Protection Policy insurance had been mis-sold - due to its very nature. This 'Scheme' was the predecessor of the currently proposed 'Scheme' involving AI/Sentinel, and I suspect that they will be very similar.

On the surface, the scheme appeared to be quite straightforward, and it involved CPP Ltd. 'pro-actively' contacting all customers who had been sold CPP policies - and offering them a refund of their premiums, along with interest at 8% (simple) on these premiums. All that claimants had to do was to return their claim forms on time, to receive their redress. The Scheme would have a 'cut-off' date, after which any further claims would be disqualified unless good reason could be shown - and the 'small print' also stipulated that any claims settled under the Scheme would be 'Full & Final,' meaning that no additional claims under it could be made. This all seemed fair enough, and the proposed Scheme was put to the vote - which went in its favour - so it was passed by the High Court and went ahead.

Now, for those who have been involved in reclaiming bank charges & Payment Protection Insurance (PPI), there is something missing here. Lenders charge interest (usually known as 'account interest' or even 'contractual interest') on what they lend. CPP premiums were usually charged annually as a fixed-sum on credit card accounts (and they often went 'under the radar' for this reason !!!) Over the years, the portion of a borrower's included increasing amounts of this CPP, and this attracted account interest at whatever rate the lender charged (typically at 29.9% APR compound interest)

This account interest was totally ignored by the FCA (who are supposed to be protecting us as the financial industry regulators) - and I did not find a single reference to it within the CPP Scheme. I alerted the FCA, FOS, and the Scheme administrators to this glaring omission before the shareholders' meeting at Wembley - but was ignored. The Scheme was eventually voted in and ratified - and the 'cut-off' date for any further claims has now passed. I don't know how many CPP claimants were involved, but I believe it must be millions - and I believe they were all deprived of their just redress by the Scheme itself.

To many, the account interest charged on these premiums might not seem like an amount worth pursuing - but to those who have delved into the aspect of Compound Interest, this is clearly a huge deprivation of due and lawful redress - and it has been wrought jointly by the FCA and the lenders. Ignorance is no defence, as they have access to financial industry resources that us mere peasants can only dream of - they know what they are doing, I believe - but they rely upon our own ignorance 'out here in the fields.'

Estimates I have recently completed in this respect show a shortfall in offered redress ranging from 30% to 70% - and this means that I am calculating that someone who should be entitled to £1000 is only being offered £300, or £700 if they are lucky. Somebody prove me wrong - or stand with me on this, as I may perhaps be a tad 'up myself,' by posting this as my first post here - but I do so having spent many hours researching this, and I do so with all respect to those who similarly devote their precious spare time to help others here.

Boohoo

Just a quick success story. Hsbc declined to refund my pre 2005 cardguard premiums so I escalated it to the financial ombudsman using the template letter on this site. Heard today that I will be awarded all my premiums plus interest. Service was really simple and efficient. Completed the short complaint form with my details and brief explanation, enclosed the letter from hsbc refusing to refund the premiums and sat back and let them fight my corner. Cannot recommend them highly enough.

backtowork2015 can you give us a timescale of how long you have waited for this outcome from when you sent the letter to FOS/FCA and to being told you have won the case.
My Dad had hsbc cashguard since 1992 and HSBC turned down his claim last December and then he sent it off to FOS in January and has not heard anymore.

tux900

Bill-K wrote: »

Somebody prove me wrong - or stand with me on this, as I may perhaps be a tad 'up myself,' by posting this as my first post here - but I do so having spent many hours researching this, and I do so with all respect to those who similarly devote their precious spare time to help others here.

Stand with you on what? You haven't actually explained what it is you want/intend to do.

The agreed scheme is over and all settlements are full and final as you point out so no retrospective action is possible.

If it is the influence of future redress schemes (card protection or otherwise) that you have mind then note that the FCA/FOS are, and always have been, able to award interest at whatever rate they believe to be most appropriate to ensure redress is as fair as possible. In this case they chose the 8% simple rate as per the de facto standard rate used by many courts and not any other figure, simple or compound. This decision was agreed by all affected parties hence the high court approval for the scheme.

tux900

Boohoo wrote: »

backtowork2015 can you give us a timescale of how long you have waited for this outcome from when you sent the letter to FOS/FCA and to being told you have won the case.
My Dad had hsbc cashguard since 1992 and HSBC turned down his claim last December and then he sent it off to FOS in January and has not heard anymore.

Complaint resolution can typically vary between a 'few months' and 'upto 2 years'.

In my case with HSBC it took around five months start to finish but there were a couple of points of contact (letter and phone) from the case handler in the meantime but I seem to recall that even the initial acknowledgement letter took a couple of months or so. This was one of the earlier cases and so little, if any, precedent had been set with HSBC and so things might well be quicker now. That said, the workload and priorities of the FOS is ever-changing and so it is really not possible to say. Assume the worst and you can only be pleasantly surprised!

Bill-K

tux900 wrote: »

Stand with you on what? You haven't actually explained what it is you want/intend to do.
Thank you for your response, Tux900, and I reply to each point in blue here. Do please be aware that I am not a CPP claimant, and I want nothing from you guys here - so I guess that has clashed somewhat with your expectations of me, and I apologise if I did not make myself clear enough.
The agreed scheme is over and all settlements are full and final as you point out so no retrospective action is possible.
Indeed - the agreed CPP Ltd Scheme has now passed its deadline for claims under that Scheme - but action may still be possible under the general FCA/FOS rules - and also under the Law itself, so that door is not firmly closed, I feel sure you will agree.
If it is the influence of future redress schemes (card protection or otherwise) that you have mind then note that the FCA/FOS are, and always have been, able to award interest at whatever rate they believe to be most appropriate to ensure redress is as fair as possible.
Duly noted - but 8% Simple Interest is prescribed by Statute, and not by the FCA/FOS - hence the term 'Statutory Interest.' What appears to have been missed here is the FCA/FOS mantra that 'fair redress' must "put the consumer back in the position they would have been if the insurance had not been sold originally" - and you will know this, I am sure. The return of the account (or 'Contractual') interest that was charged upon mis-sold insurance (along with the olde bank penalty charges) has long been established as a central part of all fair redress - and if you disagree with that, then I must challenge you here and now to say so clearly for all MSE members to see.
In this case they chose the 8% simple rate as per the de facto standard rate used by many courts and not any other figure, simple or compound. This decision was agreed by all affected parties hence the high court approval for the scheme.
Your complete avoidance of the issue of 'Associated Account Interest,' alarms me, Tux900. This has been a central part of all redress claims over the years.
Please forgive my forwardness - but whose side are you on ?

..........

tux900

Bill-K wrote: »

Stand with you on what? You haven't actually explained what it is you want/intend to do.
Thank you for your response, Tux900, and I reply to each point in blue here. Do please be aware that I am not a CPP claimant, and I want nothing from you guys here - so I guess that has clashed somewhat with your expectations of me, and I apologise if I did not make myself clear enough.

With respect, you still haven't answered my main question - what is it you want/intend to do?

[...] action may still be possible under the general FCA/FOS rules - and also under the Law itself, so that door is not firmly closed, I feel sure you will agree.

Not at all. I am not a lawyer however, as a layperson, my understanding of the term 'full and final statement' was that this very much closes the door on any further action.

What appears to have been missed here is the FCA/FOS mantra that 'fair redress' must "put the consumer back in the position they would have been if the insurance had not been sold originally" - and you will know this, I am sure.

I do. I also know that not all claimants' situations and circumstances were the same but given the numbers involved it was put forward (and democratically agreed) that a common redress scheme would be the best approach and whilst it may not be a perfect 'one size fits all' solution it nevertheless does allow what most considered to be a practical and fair resolution.

In my own case I was very much put back in the position had I not taken the insurance out - in fact I positively benefited given that the 8% interest was way above what I would have earned otherwise (I didn't pay for the insurance on credit).

Your complete avoidance of the issue of 'Associated Account Interest,' alarms me, Tux900. This has been a central part of all redress claims over the years. Please forgive my forwardness - but whose side are you on ?

Don't be alarmed; I am a mere consumer who was missold by the cover and has now received full redress both by the scheme and an FOS-induced voluntary settlement. In my case there was no 'associated account interest' as mentioned but that does not in any way undermine my ability to form a fair and balanced view. On that basis, I am not on any 'side'. More to the point I didn't think we needed to take sides - I thought we were having a discussion not a battle. Allow me to turn it round - whose side are you on? And who exactly is on the other side? CPP? FCA? FOS? Anyone that doesn't agree with you?

Bill-K

Thank you for taking the trouble to respond so fully, tux900, and I am sorry if my posts have not answered your original question. I said "I am not a CPP claimant, and I want nothing from you guys here" - so I'm not sure that I can be any clearer than that.

I am currently helping a number of others who are reclaiming CPP premiums, and what I intend to do is offer the knowledge I have acquired to as many people as possible. The MSE forum seems a good place to do this - not least because the MSE forum admin/senior staff recommended that the original CPP/FCA 'Scheme of Administration' should be given a 'Yes' vote by all those who had been sent invitations to vote upon it. I am of the belief that the proposed 'AI' Scheme will be similarly constructed, and that it will again seek to defraud claimants of their full and just redress.

That 'Scheme' completely disregarded the fact that the lenders had charged associated account interest every month on the accruing amount of mis-sold CPP premiums contained within the card account balance. It also attempted to absolve the lenders of any responsibility to repay this interest by ignoring the existence thereof. Consequently, many (perhaps most) CPP victims have been offered paltry amounts under that 'Scheme,' and have accepted them, when in fact their entitlement was to more.

So - at the very least - I would like the experts at MSE to investigate this issue, and to consider its effect upon the many claimants that I consider to have been effectively 'scammed' by the CPP/FCA scheme, and which I believe are likely to be similarly scammed by the proposed CPP/AI scheme.

As regards 'Full & Final Settlement,' many people assume that this is an iron-clad statement - and the banks know this. Just like the old 'Without Prejudice' letter header, it is subject to question and scrutiny by any court of law. Fraudulent misrepresentation can, I believe, re-open what may have appeared to be a slammed door - and I daresay there are other ways to do this. Like your good self, I am no lawyer - but I do believe that the archives of caselaw are riddled with such examples.

Turning to 'Associated Account Interest,' I feel I should retract my question "...whose side are you on ?" - as your fulsome response is far more than I would expect from a FCA/FOS 'plant.' If you paid off your card balance in full each month, then you will not have been charged any account interest - and the reclaim of 'Associated Account interest' would indeed be unnecessary. But many, many cardholders had balances which continued month-by-month - and each month they were charged interest on the balance owing. Over time, this balance included the accruing CPP premiums, along with the assoc. account interest charged on them. In the history of penalty charge reclaiming (of which MSE has been a flagship) this Associated Interest has been an accepted and enforced part of redress by both HMCS and the FOS - and should not have to be re-argued, IMHO. Yet it seems to have been 'swept under the carpet' with regard to CPP.

I agree with your final paragraph in that we should be having a discussion and not a battle. There are 'sides,' however, and from the outset back around 2005, Martin Lewis drew up the battle lines. Turning it around, as you have suggested - I answer your question directly. I am on the side of the consumer. Now, if that is not clear from my posts thus far, then again I must apologise for not being as forthright as perhaps I should. I really cannot see how my stance on this matter could be seen as anything other than a defence of the consumers' rights to fair and proper redress.

In direct answer to your final question, sir/ma'am - I am on the side of the consumer, and I am surprised that you felt the need to ask that question. As regards the second half of your question - those who seek to undermine the rights of the consumer to their own advantage are on the 'other side.' Your brief list includes a few of these - but those who disagree with me are not amongst them. Indeed - those who choose to disagree with me as eloquently as you have done, I consider to be as neutral as you proclaim to be.

I am on the side of the consumer, but I have played 'Devil's Advocate' in many a discussion, and the rights of the lenders must be respected, also. We ignore those at our peril , I agree. We ignore our own rights similarly, though.

Bill-K

MSE's Amy, Helen & Guy have put together an excellent guide to reclaiming mis-sold AI CPP here:-

[LOL - in-house link disallowed - sorry...]

Even Martin Lewis has expressed his reservations about the nature of the earlier CPP Ltd. 'Scheme of Arrangement,' and I agree with him that there clearly was room for improvement, and that such improvements should be made with the new AI 'Scheme.'

But the 'elephant in the room' must surely be the complete absence of any mention whatsoever of the associated account interest charged by the lenders on these mis-sold insurance products. This aspect is conspicuous by its absence from the CPP 'Scheme' documentation, and from the MSE discussions I have read. The regulators (FCA/FOS et al) and the lenders cannot pretend ignorance of 'Associated Account Interest,' as this has been a major element of just about every reclaim of bank charges and insurance premiums that has been made over the past ten years or more - so the complete avoidance of this is undeniably intentional.

What concerns me is that nobody at MSE appears to have mentioned this, either. The CPP Ltd. 'Scheme' was voted in last year with MSE's blessing, and those who actually understood the copious amounts of paperwork sent out by CPP and who then managed to register their claims were offered a measly few hundred quid by the 'fall-guys' CPP Ltd. Then the 'Scheme' closed after the deadline exipred on 30/08/14, and the lenders then silently walked away with millions in CPP-associated account interest that they had charged their customers.

The FCA were involved in this, and they cannot pretend ignorance of what is an accepted element of fair and proper redress - yet they 'waved it through' - as did the High Court - as also did the MSE Experts. The CPP 'Scheme' was nothing short of a fraud in my humble opinion, and I can only appeal to the Money Saving Experts here to do something to prevent the FCA & Affinion from being allowed to defraud the British public yet again.

As an example, my (now departed) Mum-in-Law was offered just under £100 by CPP under the 'Scheme.' What she didn't know was that the FOS have recommended that claimants pursue the lenders for any further redress they consider to be due. She did this, and her estate received a further £80 (approx.) from the lender to cover premiums paid prior to 14/01/05. I believe MSE claimants need to be aware that they can do this, and I hope my post here has made that clear.

But that is not even half the story - the lender still completely ignored the fact that they had been charging account interest each month on a balance which included a steadily increasing amount of CPP premiums - plus accrued interest on them - and that this interest should be refunded. Sure - this may seem like peanuts at first - but account interest is compound interest, and it has a 'snowball effect' over time.

The interest charged on these CPP premiums by the lenders can amount to several hundred percent of the actual premiums being refunded by the insurers - and this money is being studiously ignored by both the FCA and the lenders. I know that MSE is "Fighting the consumers' corner" - but I believe that they have missed this, and I need to point it out before the AI 'Scheme' gets waved through.

For MSE to make a mistake once is forgiveable, but to make the same mistake again is not - and I believe that the apparent avoidance or ignorance of the issue of 'CPP-Associated Interest' by the lenders, FCA & MSE should be brought to the fore here.

beckshwarz

[FONT=Arial, sans-serif]I claimed for compensation under the redress scheme and was unknowingly successful. When the letter arrived my dad 'filed' it in a draw and it emerged unopened seven months later. I tried to cash the cheque but it bounced. I then contacted the scheme administrator and this was in his reply[/FONT]


“[FONT=Arial, sans-serif]I am afraid we are not able to issue you a new cheque. This is because our records show six months have passed since the date we issued the cheque. In accordance with the terms of the scheme, your scheme claim has expired and no compensation is due under the scheme”[/FONT]


[FONT=Arial, sans-serif]I have looked at the terms and conditions of the scheme. It is very clearly documented as to what action you should take if you do not agree with the compensation amount but there is no section for ' your dad failed to tell you a letter had arrived seven month ago”.[/FONT]


[FONT=Arial, sans-serif]I am therefore unsure of my next course of action. Should I be commencing 'Dispute Resolution Procedure' or just taking my query to the Financial Ombudsman Service?[/FONT]

tux900

From the C&CCC (the industry body that represents UK clearing banks):

Is it true that cheques are only valid for six months?
No. A cheque is valid for as long as the debt between the two parties (i.e. issuer and payee) exists. In other words, cheques don’t have an expiration date. However, it is common banking practice to reject cheques that are over six months old to protect the payer, in case the payment has been made another way or the cheque may have been lost or stolen.
This timeframe is at the discretion of individual banks. It should not be assumed that cheques older than six months old would automatically be rejected – the only certain way to cancel a cheque is to request that a stop be placed on it. It is recommended that, if possible, customers in possession of cheques that are more than six months old obtain a replacement.
Where there is a dispute, a cheque remains legally valid in order to prove a debt for a period of six years, which is the Statute of Limitations.

So, whilst legally there is no time limit (other than the six year statute of limitations) on the validity of a cheque it is common for cheques not to be honoured by banks after six months. However, this does not remove CPP's obligation to settle the debt that they owe you and so if they are not willing to pay by another means (or of course a replacement cheque) then you should raise a dispute. If this fails take it to the FOS.

You *will* win. CPP have agreed they are indebited to you (the fact you have a cheque is evidence of that) and so you have six years within which to persue the resolution of that debt.

Be aware that you are not legally obliged to accept a cheque to resolve a debt because cheques are not legal tender. The cheque you have is simply an instruction from CPP to their bank to pay you on their behalf. Whilst that instruction may have expired the debt hasn't.