First Plus Update
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Reddh_Legend
Posts: 17 Forumite
in Loans
For many years we (individuals and members of firstpluscomplaints) have been banging the drum within forums, with the BBC (radio and TV) and with the written press. During this time, many compliance experts have said that they see the FP interest variation clause as too vague, unfair and imbalanced in favour of the lender. For those with similar loans, this is the basis of the interest variation clause:
"We may from time to time vary our interest rate. We may increase or decrease our interest rate to reflect a change which has occurred, or which we reasonably expect to occur in interest rates generally or to ensure that our business is carried on prudently, efficiently and competitively"
Those with loans prior to 2007 will have seen their APR vary in line with movements in base rate both up and down. We have never asked for the loan to be considered as a tracker and understand this, we simply observed that the loan APR followed trends in base rate movements.
There have been various defences mooted by First Plus:
We are doing nothing wrong
We have to cover increased impairment costs
We do not just look at bank base rate, we use other interest rates like LIBOR (can you believe them!)
House prices have fallen
We can do as we please in order to conduct our business in a competitive, efficient and prudent manner - terms they have failed to define
When they were increasing APR they simply said, "due to the recent increase in Bank Base rate, our costs have increased and we need to increase your APR.Your payment will rise" - no mention of house prices, LIBOR etc etc. This showed that not only were the terms within the variation clause incredibly vague, they were incredibly subjective and able to be used by the lender to their advantage - an advantage they needed when their business model fell apart.
The reality is, and their accounts show this, they have had a reduction of over £500m in their own interest bill since interest rates fell - a facility provided by their parent Barclays. Not one single penny has been passed on to customers as they have needed that money to cover the £100m pa of PPI commission they were no longer receiving and to fund the PPI compensations payable to customers - YES YOU HAVE IT, THEY HAVE BEEN REFUNDING CUSTOMERS BY USING THE CUSTOMERS OWN MONEY TO PAY THEMSELVES BACK WITH. NOT ONLY WERE THEY RIPPED OFF ONCE IN THE SALE OF PPI BUT THEY ARE PAYING THEIR OWN COMPENSATIONS AND THUS BEING RIPPED OFF AGAIN.
The regulators have been pretty powerless to do anything as secured loans are cleverly placed in the regulation system. Whilst they involve a charge on property they are not a mortgage, as they are second charge. The FLA and FSA have no jurisdiction, the OFT will not deal with individuals and the FOS will not rule on fairness and will simply state that while the FP term is "widely read, they have behaved within the meaning of the term" - of course they have, the term has no definitive control or meaning.
3 years ago, First Plus was served with a S33 Notice by the OFT regarding its conduct and future rate changes would require OFT approval - with base rates at the bottom of the cycle, increases in BBR will lead to justifiable increases in BBR so it is an empty penalty in truth. The reality is £500m in potential reductions have sailed away, the increases in APR that happened when base rate went to 5.75% were never followed by any decreases when base rates fell from 5.75% to 0.5%. The OFT Guide to Secured Loans only covers the conduct of the lender regarding base rate increases and makes no reference to their conduct when base rates fall.
SO we have customers paying over the odds, with an interest rate variation clause that we believe to be unfair, little regulatory interest, the cost of litigation prohibitive and a lender intent on milking its customers to remain solvent when in truth, its shareholder (Barclays) should have been footing the bill. As they have now milked customers for £500m and cannot milk anymore, Barclays have now put in £342m for further PPI reparations.
Whilst we firmly believe we are right in our argument, the prospect of footing a true legal campaign to gain justice for customers was looking a forlorn hope, even against the backdrop of bank charges, LIBOR fixing, interest hedge product miselling, let alone the PPI scandal (which directly has lead to this problem).
THAT WAS UNTIL RECENTLY WHEN A JUDGE FOUND IN FAVOUR OF A FIRST PLUS CUSTOMER STATING THAT:
THE INTEREST RATE VARIATION CLAUSE WAS TOO WIDELY READ AND UNFAIR IN TERMS OF UTCCR 5(1)
IT SHOULD BE REMOVED FROM THE CONTRACT
THE ABILITY TO VARY THE APR REMOVED AND THE LOAN RESET TO THE APR AT INCEPTION (to be honest this is not a bad result for FP whilst base rate remains low)
They did not appeal the decision.
We are asking all FP customers to write to FP and demand their interest rate variation clause be removed due to the recent court verdict and their loan restated back to its initial APR. Ensure refunds are sent to you as you will have overpaid and your APR should reduce.
Write also to the OFT, the FCA and to your MP. The scandal we have said for 6 years is going on, has now finally had legal judgement in the favour of a customer and ALL customers need to benefit from this.
For the cynics and trolls out there, this has never been about debt avoidance, it is about realising something unfair is happening and wanting justice for that. When a product is advertised and sold in a certain way, you simply expect it to behave that way in practise, nothing more. This is a lender where its MD was warned in 2006 that his business plan was at risk if things changed and whose response was "I am not concerned we are making millions".
"We may from time to time vary our interest rate. We may increase or decrease our interest rate to reflect a change which has occurred, or which we reasonably expect to occur in interest rates generally or to ensure that our business is carried on prudently, efficiently and competitively"
Those with loans prior to 2007 will have seen their APR vary in line with movements in base rate both up and down. We have never asked for the loan to be considered as a tracker and understand this, we simply observed that the loan APR followed trends in base rate movements.
There have been various defences mooted by First Plus:
We are doing nothing wrong
We have to cover increased impairment costs
We do not just look at bank base rate, we use other interest rates like LIBOR (can you believe them!)
House prices have fallen
We can do as we please in order to conduct our business in a competitive, efficient and prudent manner - terms they have failed to define
When they were increasing APR they simply said, "due to the recent increase in Bank Base rate, our costs have increased and we need to increase your APR.Your payment will rise" - no mention of house prices, LIBOR etc etc. This showed that not only were the terms within the variation clause incredibly vague, they were incredibly subjective and able to be used by the lender to their advantage - an advantage they needed when their business model fell apart.
The reality is, and their accounts show this, they have had a reduction of over £500m in their own interest bill since interest rates fell - a facility provided by their parent Barclays. Not one single penny has been passed on to customers as they have needed that money to cover the £100m pa of PPI commission they were no longer receiving and to fund the PPI compensations payable to customers - YES YOU HAVE IT, THEY HAVE BEEN REFUNDING CUSTOMERS BY USING THE CUSTOMERS OWN MONEY TO PAY THEMSELVES BACK WITH. NOT ONLY WERE THEY RIPPED OFF ONCE IN THE SALE OF PPI BUT THEY ARE PAYING THEIR OWN COMPENSATIONS AND THUS BEING RIPPED OFF AGAIN.
The regulators have been pretty powerless to do anything as secured loans are cleverly placed in the regulation system. Whilst they involve a charge on property they are not a mortgage, as they are second charge. The FLA and FSA have no jurisdiction, the OFT will not deal with individuals and the FOS will not rule on fairness and will simply state that while the FP term is "widely read, they have behaved within the meaning of the term" - of course they have, the term has no definitive control or meaning.
3 years ago, First Plus was served with a S33 Notice by the OFT regarding its conduct and future rate changes would require OFT approval - with base rates at the bottom of the cycle, increases in BBR will lead to justifiable increases in BBR so it is an empty penalty in truth. The reality is £500m in potential reductions have sailed away, the increases in APR that happened when base rate went to 5.75% were never followed by any decreases when base rates fell from 5.75% to 0.5%. The OFT Guide to Secured Loans only covers the conduct of the lender regarding base rate increases and makes no reference to their conduct when base rates fall.
SO we have customers paying over the odds, with an interest rate variation clause that we believe to be unfair, little regulatory interest, the cost of litigation prohibitive and a lender intent on milking its customers to remain solvent when in truth, its shareholder (Barclays) should have been footing the bill. As they have now milked customers for £500m and cannot milk anymore, Barclays have now put in £342m for further PPI reparations.
Whilst we firmly believe we are right in our argument, the prospect of footing a true legal campaign to gain justice for customers was looking a forlorn hope, even against the backdrop of bank charges, LIBOR fixing, interest hedge product miselling, let alone the PPI scandal (which directly has lead to this problem).
THAT WAS UNTIL RECENTLY WHEN A JUDGE FOUND IN FAVOUR OF A FIRST PLUS CUSTOMER STATING THAT:
THE INTEREST RATE VARIATION CLAUSE WAS TOO WIDELY READ AND UNFAIR IN TERMS OF UTCCR 5(1)
IT SHOULD BE REMOVED FROM THE CONTRACT
THE ABILITY TO VARY THE APR REMOVED AND THE LOAN RESET TO THE APR AT INCEPTION (to be honest this is not a bad result for FP whilst base rate remains low)
They did not appeal the decision.
We are asking all FP customers to write to FP and demand their interest rate variation clause be removed due to the recent court verdict and their loan restated back to its initial APR. Ensure refunds are sent to you as you will have overpaid and your APR should reduce.
Write also to the OFT, the FCA and to your MP. The scandal we have said for 6 years is going on, has now finally had legal judgement in the favour of a customer and ALL customers need to benefit from this.
For the cynics and trolls out there, this has never been about debt avoidance, it is about realising something unfair is happening and wanting justice for that. When a product is advertised and sold in a certain way, you simply expect it to behave that way in practise, nothing more. This is a lender where its MD was warned in 2006 that his business plan was at risk if things changed and whose response was "I am not concerned we are making millions".
0
Comments
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First Plus stopped new lending over 5 years ago. So why haven't you remortgaged elsewhere?
Of course compensation is paid by customers to themselves. Where do think it would come from? There's no magic money trees as some seem to imagine.0 -
Thrugelmir wrote: »So why haven't you remortgaged elsewhere?
.
Where???????
That aside, I can't see the relevance. The current clause is unfair, existing, and old customers have been treated unfairly, paying more than should have been.
That is the point of the post, lets keep it on topic.
0 -
Reddh_Legend wrote: »For many years we (individuals and members of firstpluscomplaints) have been banging the drum within forums, with the BBC (radio and TV) and with the written press. During this time, many compliance experts have said that they see the FP interest variation clause as too vague, unfair and imbalanced in favour of the lender. For those with similar loans, this is the basis of the interest variation clause:
"We may from time to time vary our interest rate. We may increase or decrease our interest rate to reflect a change which has occurred, or which we reasonably expect to occur in interest rates generally or to ensure that our business is carried on prudently, efficiently and competitively"
Those with loans prior to 2007 will have seen their APR vary in line with movements in base rate both up and down. We have never asked for the loan to be considered as a tracker and understand this, we simply observed that the loan APR followed trends in base rate movements.
There have been various defences mooted by First Plus:
We are doing nothing wrong
We have to cover increased impairment costs
We do not just look at bank base rate, we use other interest rates like LIBOR (can you believe them!)
House prices have fallen
We can do as we please in order to conduct our business in a competitive, efficient and prudent manner - terms they have failed to define
When they were increasing APR they simply said, "due to the recent increase in Bank Base rate, our costs have increased and we need to increase your APR.Your payment will rise" - no mention of house prices, LIBOR etc etc. This showed that not only were the terms within the variation clause incredibly vague, they were incredibly subjective and able to be used by the lender to their advantage - an advantage they needed when their business model fell apart.
The reality is, and their accounts show this, they have had a reduction of over £500m in their own interest bill since interest rates fell - a facility provided by their parent Barclays. Not one single penny has been passed on to customers as they have needed that money to cover the £100m pa of PPI commission they were no longer receiving and to fund the PPI compensations payable to customers - YES YOU HAVE IT, THEY HAVE BEEN REFUNDING CUSTOMERS BY USING THE CUSTOMERS OWN MONEY TO PAY THEMSELVES BACK WITH. NOT ONLY WERE THEY RIPPED OFF ONCE IN THE SALE OF PPI BUT THEY ARE PAYING THEIR OWN COMPENSATIONS AND THUS BEING RIPPED OFF AGAIN.
The regulators have been pretty powerless to do anything as secured loans are cleverly placed in the regulation system. Whilst they involve a charge on property they are not a mortgage, as they are second charge. The FLA and FSA have no jurisdiction, the OFT will not deal with individuals and the FOS will not rule on fairness and will simply state that while the FP term is "widely read, they have behaved within the meaning of the term" - of course they have, the term has no definitive control or meaning.
3 years ago, First Plus was served with a S33 Notice by the OFT regarding its conduct and future rate changes would require OFT approval - with base rates at the bottom of the cycle, increases in BBR will lead to justifiable increases in BBR so it is an empty penalty in truth. The reality is £500m in potential reductions have sailed away, the increases in APR that happened when base rate went to 5.75% were never followed by any decreases when base rates fell from 5.75% to 0.5%. The OFT Guide to Secured Loans only covers the conduct of the lender regarding base rate increases and makes no reference to their conduct when base rates fall.
SO we have customers paying over the odds, with an interest rate variation clause that we believe to be unfair, little regulatory interest, the cost of litigation prohibitive and a lender intent on milking its customers to remain solvent when in truth, its shareholder (Barclays) should have been footing the bill. As they have now milked customers for £500m and cannot milk anymore, Barclays have now put in £342m for further PPI reparations.
Whilst we firmly believe we are right in our argument, the prospect of footing a true legal campaign to gain justice for customers was looking a forlorn hope, even against the backdrop of bank charges, LIBOR fixing, interest hedge product miselling, let alone the PPI scandal (which directly has lead to this problem).
THAT WAS UNTIL RECENTLY WHEN A JUDGE FOUND IN FAVOUR OF A FIRST PLUS CUSTOMER STATING THAT:
THE INTEREST RATE VARIATION CLAUSE WAS TOO WIDELY READ AND UNFAIR IN TERMS OF UTCCR 5(1)
IT SHOULD BE REMOVED FROM THE CONTRACT
THE ABILITY TO VARY THE APR REMOVED AND THE LOAN RESET TO THE APR AT INCEPTION (to be honest this is not a bad result for FP whilst base rate remains low)
They did not appeal the decision.
We are asking all FP customers to write to FP and demand their interest rate variation clause be removed due to the recent court verdict and their loan restated back to its initial APR. Ensure refunds are sent to you as you will have overpaid and your APR should reduce.
Write also to the OFT, the FCA and to your MP. The scandal we have said for 6 years is going on, has now finally had legal judgement in the favour of a customer and ALL customers need to benefit from this.
For the cynics and trolls out there, this has never been about debt avoidance, it is about realising something unfair is happening and wanting justice for that. When a product is advertised and sold in a certain way, you simply expect it to behave that way in practise, nothing more. This is a lender where its MD was warned in 2006 that his business plan was at risk if things changed and whose response was "I am not concerned we are making millions".
Do you have any template letters to ensure the wording is correct?
I'll pass this info to my friend.Try to be a rainbow in someone's cloud.0 -
Thrugelmir wrote: »First Plus stopped new lending over 5 years ago. So why haven't you remortgaged elsewhere?
Of course compensation is paid by customers to themselves. Where do think it would come from? There's no magic money trees as some seem to imagine.
Didn't take long for me to be reminded why I stopped coming to this site years ago. Not helpful not supportive but frequented by sanctimonious pompous elitists.0 -
This us great.
I would also like a template letter to send.
How far back does this apply?No. 83 in £365.00 in 365 days 17/365
Jan lunch to work days 10/200 -
Something like this should do.
Please send to:
Firstplus - [EMAIL="customercare@firstplus.co.uk"]customercare@firstplus.co.uk[/EMAIL]
THE FINANCIAL OMBUDSMAN SERVICE, [EMAIL="complaint.info@financial-ombudsman.org.uk"]complaint.info@financial-ombudsman.org.uk[/EMAIL]
THE OFFICE OF FAIR TRADING, [EMAIL="enquiries@oft.gsi.gov.uk"]enquiries@oft.gsi.gov.uk[/EMAIL]
THE FINANCIAL CONDUCT AUTHORITY. [EMAIL="consumer.queries@fca.org.uk"]consumer.queries@fca.org.uk[/EMAIL]
THIS NOTE IS SENT TO FIRSTPLUS, THE FINANCIAL OMBUDSMAN SERVICE, THE OFFICE OF FAIR TRADING, & THE FINANCIAL CONDUCT AUTHORITY
I am writing as a dissatisfied First Plus customer. For some years now, many customers have been complaining that the interest rate variation clause(s) in First Plus secured loan agreements is unfair. The result being that all customers, including myself, are being forced to repay significantly more than could reasonably be expected when the use of their widely drawn interest rate clause is applied in an imbalanced and unfair manner.
Last month, a fellow First Plus customer had a court rule that their interest rate variation clause is unfair under 5(1) of the Unfair Terms in Consumer Contract Regulations. The variation clause in question is the same clause as the one in the majority of First Plus customers agreements - namely clause 7. The key wording that is significant is as follows:
"We may from time to time vary our interest rate. We may increase or decrease our interest rate to reflect a change which has occurred, or which we reasonably expect to occur in interest rates generally or to ensure that our business is carried on prudently, efficiently and competitively"
[DELETE THIS NEXT BIT IF NOT RELEVANT TO YOU
There is a variation of this clause that includes a reference to FHBR:
"The interest rate on your account will not in any twelve month period, vary by more than twice the variation in the Finance House Base Rate published by the Finance and Leasing Association during the same period. If for any reason, the Finance and Leasing Association ceases to publish the Finance House Base Rate we may refer the variation in our interest rates to any other Base Rate which in our reasonable opinion best matches that rate." ]
The key elements of the clause are detailed as above and the declaration that the wording is unfair should apply to all customers, including me.
I understand a copy of the court judgement has already been sent to you. As you will have seen the judge has ruled that the contract can continue. The understanding is that the declaration of the clause being unfair would strike the clause from the contract thus disabling the ability of the lender to vary the rate with the loan reverting to the incepted APR and the loan being restructured and reset accordingly.
Can Firstplus please advise whether or not it is your intention to retrospectively revert my loan to the inception rate APR and apply it as a fixed rate going forward?
Can the OFT, FCA and FOS please advise me what action it intends to take against Firstplus, as I continue to suffer financially from the penal nature of the application by First Plus of their interest variation clause, which I now note to be legally unfair.
I would respectfully ask that you provide a response to myself within 10 working days.
Regards0 -
Didn't take long for me to be reminded why I stopped coming to this site years ago. Not helpful not supportive but frequented by sanctimonious pompous elitists.
With an attitude like that I'm not surprised you find debating on an open forum a problem. Sometimes helping oneself is as important as finding someone else to blame.0 -
Thrugelmir wrote: »First Plus stopped new lending over 5 years ago. So why haven't you remortgaged elsewhere?
Of course compensation is paid by customers to themselves. Where do think it would come from? There's no magic money trees as some seem to imagine.
Are you in touch with the mortgage market and my personal situation?
Lack of equity, loss of job and penal settlement terms are 3 of the reasons I could list.
This is a problem for shareholders not customers, as it would be in any other business. It is only because we are captive that they thought they could get away with it - unlike petrol and utilities where you are not contracted and can readily move, this is not the case and they know it.
The good customers they have will be able to or have been able to mortgage away, leaving a loan book of diminishing value and quality that by definition will have far greater risk.
In your own mind, you may make a valid comment but there is no bearing to the facts presented - "a judge has deemed the clause unfair" - I would welcome opinion on that.0 -
Happy for open AND relevant debate. The internet has given birth to a generation of faceless WUMs and Trolls who have so far in their lives been perfect in every decision they make and been able to be fully conversant with a wide range of topics within which they can give informed dialogue.
We have loan book of £2bn+ within which 50,000 people are being ripped off and that is just First Plus, let alone GE, Ocean etc. To ask for something to behave in the way it was sold is not a big thing to ask for is it? What if your colour TV only showed black and white pictures after 6 months, would you accept it or would you seek resolution...only to be then told you were stupid for buying it in the first place or just go buy another TV?0
This discussion has been closed.
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