Sippdeal shocker (& link to template complaint letter)

malfesto

Sloppy process by the adjudicator on so many levels. Some line of arguments for the appeal:

• The undertaking by Sippdeal (2006) predates FSA finalised guidance (2012) and OFT detailed guidance (2008) on UTCCR. Also, the regulatory landscape has been altered by the Financial Services Act 2012 which established the FCA. Hence, it would be reasonable to argue that the regulator’s view would have changed since the undertaking by Sippdeal was given.

• The utter disregard of the OFT guidance even though there have been past Ombudsman determinations (on entirely different cases) which have relied on the same guidance. The regulators’ guidance (both FSA & OFT) provides analysis on UTCCR provisions regarding freedom to dissolve the contract. Given that the balance of the contract is changed to the consumer’s disadvantage through the significant price changes, it is clearly unfair that consumer should pay the transfer out charge (which is essentially a penalty/default/exit charge) when dissolving the contract. A price increase where the method of variation for the charges is not explicitly stated in the contract is unambiguously a disadvantageous contract change.

• The recent case in the Court of Justice of the European Union which you could use as a precedent. The opinion of the court in RWE Vertrieb AG v. Verbraucherzentrale Nordrhein-Westfalen e.V. (Case C-92/11; CURIA or EUR-Lex website will link to complete judgement text) indicates that consumers have the right to freely terminate the contract following unilateral variation in charges (UTCCR is the UK implementation of Council Directive 93/13/EEC). In particular (bold emphasis mine),

Paragraph 49: “... a term that allows the supplier to alter unilaterally the charges for the service to be supplied, the Court has previously stated that it follows from Articles 3 and 5 of and points 1(j) and (l) and 2(b) and (d) of the annex to Directive 93/13 that it is of fundamental importance for that purpose, first, whether the contract sets out in transparent fashion the reason for and method of the variation of the charges for the service to be provided, so that the consumer can foresee, on the basis of clear, intelligible criteria, the alterations that may be made to those charges and, secondly, whether consumers have the right to terminate the contract if the charges are in fact altered (see, to that effect, Invitel, paragraphs 24, 26 and 28).”

Paragraph 54: “... the consumer’s right to terminate the supply contract he has concluded in the event of a unilateral alteration of the tariffs applied by the supplier, it is of fundamental importance, as the Advocate General says in substance in point 85 of her Opinion, that the right of termination given to the consumer is not purely formal but can actually be exercised. That would not be the case if, for reasons connected with the method of exercise of the right of termination or the conditions of the market concerned, the consumer has no real possibility of changing supplier, or if he has not been informed suitably in good time of the forthcoming change, thus depriving him of the possibility of checking how it is calculated and, if appropriate, of changing supplier. Account must be taken in particular of whether the market concerned is competitive, the possible cost to the consumer of terminating the contract, the time between the notification and the coming into force of the new tariffs, the information provided at the time of that communication, and the cost to be borne and the time taken to change supplier.”

• There are a few platforms (Alliance Trust & Barclays Stockbrokers come to mind) that have waived transfer out charges when implementing RDR changes. These should be cited as examples of best practice in response to the same regulatory changes (include official press release or website link if available). The fair and reasonable remit of FOS allows it to consider good industry practice when assessing complaints.

Hope you are successful in the appeal.

FWIW, I think this reflects extremely badly on the firm given that most of its competitors have waived transfer out charges (even HL came round). Trust is extremely important especially in this particular business line.

Regards,

malfesto.

SnowMan

Thanks Malfesto for your post and earlier help.

Totally agree that it reflects very poorly on Youinvest. I call them Youcan'ttrust now although their name change should have beento SippNOdeal if this is the outrageous way they treat customers.

Last time round the FOS handled things well so it came as a shock when I saw the ridiculously superficial, inaccurate and non-sensical reply from the adjudicator. Every single point I made was ignored.

Good point about the 2006 undertaking predating the OFT and FSA guidance.

I have a horrid feeling I will have to take the case through the small claims track of teh county court. At least it ought to be properly assessed if I have to go that route.

SnowMan

grey_gym_sock wrote: »

if it wasn't asking too much (which it is), i'd suggest instead adding a measure to the spreadsheet, showing how many years' charges it would cost to transfer out.

I've had a further think about that and think that's a superb idea, I may well incorporate it into the next version. I may call it the 'SCAM Factor'(standing for Some Charging structures Are Meaningless. Sorry I was too angry yesterday to give it proper consideration.

For the meantime I've added a new chart showing the 'Total platform charge assuming re-registration exit after one year'.

The relative size of red bars (which are the exit charges through re-registration) to the yellow bars (which represent one years of platform charges including dealing costs) is your suggested SCAM factor, it's the 5th and last chart in if you scroll down to the charts.

https://drive.google.com/file/d/0BxA6Przq6KI1d0xvMDR0S1dLdXc/edit?usp=sharing

You can see for Youinvest that the red bar is massively bigger than the yellow bar. In fact it is 12.5 times bigger.

That represents an example scenario that if Youinvest introduce a custody charge on ETFs in a years' time and refuse customers a penalty free exit, then the exit penalty will be 12.5 years worth of platform charges.

As Youinvest's recent form suggests, this could easily happen. It shows how meaningless Youinvest's quoted annual platform charges are especially in ETF only scenarios, and why I am reluctant to include them in comparisons.

naedanger

SnowMan wrote: »

Thanks Malfesto for your post and earlier help.

Totally agree that it reflects very poorly on Youinvest. I call them Youcan'ttrust now although their name change should have beento SippNOdeal if this is the outrageous way they treat customers.

Last time round the FOS handled things well so it came as a shock when I saw the ridiculously superficial, inaccurate and non-sensical reply from the adjudicator. Every single point I made was ignored.

Good point about the 2006 undertaking predating the OFT and FSA guidance.

It must be extremely annoying to have all your arguments ignored.

You have so many very strong arguments supporting your position it may be difficult setting them all out in a clear way. Especially given it seems that those in FOS dealing with at least some of these cases are incapable of considering the effect of the terms on the contact as a whole.

I have a horrid feeling I will have to take the case through the small claims track of teh county court. At least it ought to be properly assessed if I have to go that route.

I mentioned this as an option on another thread before seeing here that you are already considering this option.

SnowMan

The Financial Conduct Authority rang me up today.

I don't want to divulge too much, but I am very encouraged by what they are telling me.

Firms that think they have exemptions from the Unfair Terms in Consumer Contracts Regulations need to think again

badger09

SnowMan wrote: »

The Financial Conduct Authority rang me up today.

I don't want to divulge too much, but I am very encouraged by what they are telling me.

Firms that think they have exemptions from the Unfair Terms in Consumer Contracts Regulations need to think again

Excellent news SnowMan :T

naedanger

SnowMan wrote: »

The Financial Conduct Authority rang me up today.

I don't want to divulge too much, but I am very encouraged by what they are telling me.

Firms that think they have exemptions from the Unfair Terms in Consumer Contracts Regulations need to think again

Sounds like good news.

Speaking of the FCA, I sent them an email earlier this week asking when I might receive a response to my previous letter asking them to investigate HL's charge variation term as I considered it did not comply with the UTCCR.

I received a reply today saying they expected to provide a response to the concerns I raised by the end of next week.

I must admit I am not confident their response will be that HL's terms are unfair in their view too. (Were it the person in the OFT that wrote the OFT's guidance that was investigating then I would be confident.)

SnowMan

To recap I complained to the Financial Ombudsman Service because Youinvest had quadrupled my platform charges within 8 months of me switching to them (despite me already being on an explicity charged structure that complied with the Retail Distribution Review) and Youinvest refused to waive exit charges that amounted to over 3 times the annual platform charge to leave. The initial adjudicator at the FOS had assessed my complaint very superficially (in my view) and recommended the complaint not be upheld.

Common sense has now prevailed at the FOS.

My case is now being passed by the original FOS adjudicator to the FOS Portfolio Management Team at the FOS. They will now make the initial adjudication in place of the original recommendation of the initial adjudicator (the Portfolio Management Team apparently have the technical skills to properly assess this one).

To be fair to the original FOS adjudicator, having spoken to an Ombudsman, he has now realised that he doesn't have the technical skills to deal with this. There now looks that there is a strong possibility of the issue being properly looked at, and regardlesss of the outcome, that has to be a good thing.

So there are still two steps to this, the original adjudicator decision and the final ombudsman decision if it goes to an Ombudsman for a final decision.

atypical

For those who missed it, Fidelity and Charles Stanley Direct are "actively lobbying the FCA" to ban exit fees.

http://www.investmentweek.co.uk/investment-week/news/2335944/fidelity-joins-calls-for-exit-fee-restrictions

Never knew Charles Stanley Direct are waiving their exit fees for at least a year. The fee still shows on their website.

naedanger

SnowMan wrote: »

Common sense has now prevailed at the FOS.

My case is now being passed by the original FOS adjudicator to the FOS Portfolio Management Team at the FOS. They will now make the initial adjudication in place of the original recommendation of the initial adjudicator (the Portfolio Management Team apparently have the technical skills to properly assess this one).

To be fair to the original FOS adjudicator, having spoken to an Ombudsman, he has now realised that he doesn't have the technical skills to deal with this. There now looks that there is a strong possibility of the issue being properly looked at ...

Much better news from FOS. And as you say it is good that the adjudicator recognised he does not have the technical skills. Better late than never.