ERUDIO student loans help

Mr_McGuffin

The SLC form includes the wording 'in terms of its statutory powers'. As I understand it the SLC does not have statutory powers to obtain this information, therefore it is essentially a bluff.

I do not believe that a borrower can reasonably be required to agree to something that the lender does not have the power to do and then hope that they won't, or can't, do it.

And if agreement to this isn't in the original terms, authorisation of this is a new term.

fermi

That statutory powers part is something that has puzzled me (as that seems an idle threat), but the latter "and" parts are independent of that and mirrored somewhat what Erudio are demanding.

I posted just for comparison, but not to say that I necessarily agree that what Erudio is demanding is right.

erudioed

the part where the SLC form says 'and i authorise the organisations or persons from whom my income is derived to give the Comapny such confirmation or information about that income as the Company may request', followed by our signature. Does the signature give them that power or are they still bound by their original powers?

Mr_McGuffin

The original agreement and the regulations that governed them did not authorise contact with anyone other than the borrower himself. The 1990 Act and Regulations did not give any right to contact any employer, bank, HMRC, anyone at all. The possibility of doing so was considered and rejected.

This is from the 1990 DES note that told MPs how the loan scheme would work and how the proposed SLC would seek the ’verification’ of income of only a sample of those applying for deferment:

'Retrospective spot-checking against graduate's actual income by SLC:
(i) for those in PAYE, by requiring production of P60
(ii) for self-employed, by requiring production of accounts agreed with Inland Revenue'
- Top-up loans: rules & procedures, Copyright 1990 Department of Education and Science, House of Commons Library Dep 5749

And it was only to be applied to a sample for spot-checking, the majority would self-certify and produce some evidence, (’eg pay-slips’) when applying for deferment. It was proposed as being that simple. The legislation was passed on that basis. In time, the goalposts moved and part of this verification process proposed for a sample of applicants was incorporated into the SLCs regular requirement for deferment applications.

These loans are some hybrid of commercial loans covered by the CCA and a unique state scheme with its own Act and Statutory Instrument. Which modifies the other, when and how? Lawyers would have an opinion on this. I guess they have not agreed either, because of the changing way these loans have been handled and adapted over the years, presumably as a result of differing legal guidance.

As I understand it, the clause to apparently ’authorise’ contact in the SLC Certificate and Warranty was added by the SLC and is not supported by the applicable Regulations. If not, or if there was some later change to the Regulations to incorporate it, I'm happy if someone can correct me, or if someone can explain some other modifying legislation, such as the CCA, which allowed it to be demanded. But if so, why would it be necessary to state this clause again and again? The Deferment Application Form did not re-state the terms of the original agreements every year, why this clause only, which wasn't in the original agreement? I believe it was not in the original agreement, no one had ever agreed to it in taking out the loans, and it was unacceptable for inclusion in retrospective legislation.

Was it just a bluff? Did the SLC ever actually do this? Did anyone refuse to agree to it? Was the inclusion of 'in terms of its statutory powers' the acknowledgement that it did not have the power to do this at all? When was it added?

The deferment application form prescribed in the Labour Government's first sale of student loans in 1998 contained a very similar clause. Was it added then, at the same time the Regulations changed from satisfies to show? Was it the idea to apparently stiffen up the deferment process by adding this clause prior to the sale to the private sector, whether or not it would actually be done or the SLC had the power to do it? Perhaps someone else knows when this wording first appeared, or if there is some legal reason why we must consent to it.

Whether or not anyone signed the SLC form when their loans were owned by the state seems to me beside the point. Erudio is apparently demanding new and unacceptable powers outside the original agreement. It is demanding that I make a new agreement with a new debt owner, and is making deferment conditional on acceptance of this.

The alternative is that it is nonsense, and that consenting to this demand cannot authorise them to approach some other third party, much less can this form 'authorise' anyone else to give them information. This is then absurd, because Erudio are changing the terms of the loans solely for the purpose of making a meaningless threat that it cannot and will not carry out. This would make deferment conditional on accepting that I ‘understand’ I have received a nonsensical threat, but have not accepted it as true. It is then a demand to certify that I 'understand' Erudio reserve the right to do nothing.

And who would want to risk it not being an empty threat? Either way, it is still a change to the terms and conditions. Because to demand agreement to understanding anything as a condition for deferment is a change to the terms.

As far as I understand it, the terms of the loans do not contain this authorisation, and never have done. The terms of the loans allow for deferment. Erudio demands that I consent to these new terms as a condition of granting deferment. They refuse deferment unless I agree. That is a change to the terms and conditions, and the Government promised that would not happen.

Mr_McGuffin

Early information and publicity material about the loans:

‘Top-up loans for students – the Government’s proposals’ February 1990, DES

‘The Student Top-Up Loans Scheme – An Outline’ May 1990, DES

‘The Student Top-Up Loans Scheme – An Outline’ July 1990, Department of Education for Northern Ireland (DENI)

‘Loans for Students – a brief guide’ Sept 1990, DENI

‘Student Loans – Are You in the Picture?’ September 1990, SLC

The National Archives in Kew hold Department of Education and Science and SLC records.

ericctheking

Mr McGuffin, great investigating.

Do you know about how these loans were sold "without a view to a financial gain" so they could be marketed to sixth form students and even sold to under 18s in some cases?

Makes a mockery of that to sell them to a profit making organisation!

anna2007

erudioed wrote: »

the part where the SLC form says 'and i authorise the organisations or persons from whom my income is derived to give the Comapny such confirmation or information about that income as the Company may request', followed by our signature. Does the signature give them that power or are they still bound by their original powers?

I don't think the borrower's signature can be deemed to give SLC/Erudio that power, if the statement re their "statutory powers" is factually inaccurate and completely misleading.

I'm a bit gobsmacked at this news (thanks again to Mr McGuffin for this latest finding), as it could be game-changing and shift the balance of power to the borrower. Without any statutory powers conferred by the legislation, all that Erudio are legally entitled to rely on is our declaration and supporting evidence.

Because of the "statutory powers" referred to in the declaration, I always assumed the SLC had the right to verify my declared income with HMRC. I therefore didn't think it was worth complaining about the amount of evidence Erudio are demanding to support our deferment applications.

However, if Erudio have no statutory powers to verify income with HMRC or employers or any other organisation, I think we all have to make fresh complaints to Erudio, the FOS and FCA, regarding the level of evidence they are asking for. The regulations are clear that we only have to show that our gross income in the "relevant month", i.e. the month before applying for deferment, is below the threshold, along with a warranty (if requested by the lender) that our income in the following 3 months won't be, or is unlikely to be, above the threshold.

This means Erudio have no legal right to see P60's, 3 months' worth of payslips/bank statements, or anything else that falls outside of that "relevant month". I remember the SLC used to ask for payslips for the previous 3 months, and I had no problem providing it to them, but why should we give Erudio anything more than what's legally required?

If we use Mr McGuffin's evidence in our complaints, along with the provisions of the regs on showing income for the relevant month, Erudio will surely be forced to back down on their demands for extra evidence?

anna2007

anna2007 wrote: »

I think we have to keep blitzing the media, the regulator, the ombudsman, and everyone else, or the whole thing will eventually just fizzle out and our Government and their DCA consortium pals will walk away relatively unscathed.

The likes of Watchdog will take notice if they receive a large number of complaints about dodgy practice, so it has to be a concerted effort from EVERYONE who's affected. There are hundreds of thousands included in the sell off and near to 100,000 views of this thread, and plenty of p'd off people, so it shouldn't be difficult to generate some interest - IF enough people take the time to send off an email.

I covered many of the Erudio issues in my complaint to the FCA, I can post them up along with the previous mailing list as a template for the media - but it's important people adapt it to their own situation, give examples of what's happened to them. I think that would have more impact than a template email?

Here's the mailing list for the media, with a list of the main issues I reported to the FCA:

[EMAIL="biscom@parliament.uk"]biscom@parliament.uk[/EMAIL], [EMAIL="news@moneysavingexpert.com"]news@moneysavingexpert.com[/EMAIL], [EMAIL="s.read@independent.co.uk"]s.read@independent.co.uk[/EMAIL], [EMAIL="paul@paullewis.co.uk"]paul@paullewis.co.uk[/EMAIL], [EMAIL="moneybox@bbc.co.uk"]moneybox@bbc.co.uk[/EMAIL], [EMAIL="emmalunn2002@hotmail.com"]emmalunn2002@hotmail.com[/EMAIL], [EMAIL="news.london@ukmetro.co.uk"]news.london@ukmetro.co.uk[/EMAIL], [EMAIL="money@theguardian.com"]money@theguardian.com[/EMAIL], [EMAIL="which@which.co.uk"]which@which.co.uk[/EMAIL], [EMAIL="editor@thisismoney.co.uk"]editor@thisismoney.co.uk[/EMAIL], [EMAIL="weekend.money@thetimes.co.uk"]weekend.money@thetimes.co.uk[/EMAIL], [EMAIL="newsdesk@sunday-times.co.uk"]newsdesk@sunday-times.co.uk[/EMAIL], [EMAIL="watchdog@bbc.co.uk"]watchdog@bbc.co.uk[/EMAIL], [EMAIL="uknewsplan@bbc.co.uk"]uknewsplan@bbc.co.uk[/EMAIL], [EMAIL="news@sky.com"]news@sky.com[/EMAIL], [EMAIL="james.smith@pressassociation.com"]james.smith@pressassociation.com[/EMAIL], [EMAIL="ean@ft.com"]ean@ft.com[/EMAIL], [EMAIL="News.desk@express.co.uk"]News.desk@express.co.uk[/EMAIL], [EMAIL="news@the-sun.co.uk"]news@the-sun.co.uk[/EMAIL], [EMAIL="steve.hawkes@the-sun.co.uk"]steve.hawkes@the-sun.co.uk[/EMAIL], [EMAIL="paul.dacre@dailymail.co.uk"]paul.dacre@dailymail.co.uk[/EMAIL], [EMAIL="itvplanning@itn.co.uk"]itvplanning@itn.co.uk[/EMAIL], [EMAIL="news@channel4.com"]news@channel4.com[/EMAIL], [EMAIL="dtnews@telegraph.co.uk"]dtnews@telegraph.co.uk[/EMAIL], [EMAIL="stnews@telegraph.co.uk"]stnews@telegraph.co.uk[/EMAIL], [EMAIL="news@dailymail.co.uk"]news@dailymail.co.uk[/EMAIL], [EMAIL="mirrornews@mirror.co.uk"]mirrornews@mirror.co.uk[/EMAIL], [EMAIL="money@citywire.co.uk"]money@citywire.co.uk[/EMAIL], [EMAIL="news@eveningtimes.co.uk"]news@eveningtimes.co.uk[/EMAIL], [EMAIL="newseditor@independent.co.uk"]newseditor@independent.co.uk[/EMAIL], [EMAIL="rachel.williams@moneywise.co.uk"]rachel.williams@moneywise.co.uk[/EMAIL], [EMAIL="info@ifaonline.net"]info@ifaonline.net[/EMAIL], [EMAIL="ian.dunt@politics.co.uk"]ian.dunt@politics.co.uk[/EMAIL],

I would like to make you aware of the problems I have experienced with Erudio Student Loans, since it took over the administration of my student loans in November 2013, when the remainder of the mortgage style student loans book was sold by the Government to the debt management consortium CarVal Investors/Arrow Global.

I am currently entitled to defer repayments of my student loans, due to my income being below the deferment threshold. I have attached my formal complaint to Erudio, which mainly relates to I]Outline your own problems with Erudio here and delete from the list below if covered in your complaint[/I

There are many issues reported on public forums by customers of Erudio, which I think should be drawn to your attention:

Introducing new contract terms through Erudio's deferment application form (DAF), for example by making a Direct Debit a condition of deferment, when there is no legal requirement for this.

Erudio claiming that their acceptance of a deferment application constitutes the borrower's consent to their personal data being shared with Credit Reference Agencies.

Excessive delays of 8 weeks or more in the processing of deferment applications (in comparison to around 3 weeks for the Student Loans Company).

Claims by Erudio that DAF’s have not been received (despite proof of delivery), or that DAF’s and evidence have been misplaced or are illegible, requiring customers to resubmit their applications.

Erudio requesting evidence of income in excess of what is required in the Student Loans legislation.

Refusing customers’ applications for deferment, where Erudio’s DAF has not been used. Many customers have refused to complete the DAF because of the new terms included on the form, and for fear of the legal implications of signing such a document. Signed letters requesting deferment, which include the wording of the certificate and warranty per the DAF and have included the required evidence of income, have been refused deferment and borrowers’ accounts have been put into arrears as a result. There is no requirement in the Student Loans legislation or regulations for a specific form to be used, only that the borrower must show the lender that income is below the deferment threshold.

Taking direct debits from customers' bank accounts, when no payments are due (there are reports on the forums that this is a continuing problem) http://www.moneysavingexpert.com/news/loans/2014/05/erudio-student-loans-500-people-had-mistakenly-taken-from-accounts.

Including means-tested benefits, child maintenance payments, etc in their assessment of customers’ income, and refusing deferment when such income takes the borrower over the deferment threshold.

There are literally thousands of posts on online forums, with details of the many issues customers have experienced since their student loans were transferred to Erudio:

https://forums.moneysavingexpert.com/discussion/4923210

http://www.mumsnet.com/Talk/legal_money_matters/a2028211-erudio-student-loans

http://www.mumsnet.com/Talk/legal_money_matters/a2057131-Erudio-Student-Loans-Continued

http://www.mumsnet.com/Talk/legal_money_matters/a2093805-Erudio-Student-Loans-Continued-part-3

I hope you can give these matters your urgent attention, to help protect customers from Erudio's unfair treatment, and to ensure that Erudio act in accordance with the terms of the original loan agreement and relevant law.

Ryansson

Finally got a response to my complaint a couple of days before the 8 week deadline (still not received a copy of my original agreement first requested on 24/4/14).
They are insisting I sign the DAF even though in their letter they state

"Please note, by signing the DAF you are not automatically concenting to the Fair Processing Notice (FPN) which relates to information being passed onto credit reference agencies. The FPN was attached to the notice of Assignment sent to you in March 2014"

They then say:

"Erudio considersthat the reporting of accounts to credit reference agencies is in accordance with the terms and conditions as specified in section 16 (disclosure of information) of borrowers' credit agreements that were issued before 1998"

My loans straddled 1998 so they are saying am subject to both sets of conditions. They follow with the little threat of you are already 3 months in arrears but if you get the form back and i am succesful in defering they will correct this but only 3 months btw. How does this give me chance to go through FOS without going beyond the 3 months and having to pay?

So the saga continues !!!!!!

Voyager2002

JeLaw wrote: »

On the subject of blitzing the media, MPs, etc.... I've still not had any reply whatsoever from my MP (I emailed them a few months ago).

Maybe I'm just being paranoid but would my MP have any way of knowing that I used to support a different political party? I was a member of a political party for a year (not anymore) and it's not the same one as my MP. Can't help wondering that my MP knows and is therefore not going to bother to help me with my concerns.

I think they wouldn't know and their lack of response is simply coincidence. Maybe they've been very busy dealing with other constituents or perhaps even the email never reached them for some reason.

I'll try contacting them again and hope for a response this time. I want to go in person if I can make one of the surgeries.

MPs serve all their constituents equally: they are unlikely to know about your membership of another part (unless you are a well-known local activist) and this should not make the slightest bit of difference when/if you approach them asking for help.

Their offices tend to be badly organised, and email is not an effective way to make contact.

One experience: I needed help from an MP whose party was opposed to my own beliefs. I wrote explaining the problem and asking for an appointment, but got no reply. I then telephoned his office to make an appointment, and when I saw him it was obvious that he had never seen the letter. However, once I had explained the issue to him face-to-face he essentially everything that he could do.

So I suggest that you use the 'phone, make an appointment, and explain the issue once you have got her/his attention.