ERUDIO student loans help

anna2007

I received the ICO's decision notice earlier today, on the FOI request for sale and purchase agreement between BIS and Erudio - much sooner than expected, as they had mentioned end of March, possibly later. The info that's been released so far can be found at the bottom of this page
A copy of the decision notice is here, with a pretty lame attempt at redacting my personal information (took fcucking ages too!)
I have 28 days to make an appeal to the tribunal, any ideas to counter the IC's arguments would be really appreciated and helpful, as there's not a lot of time. I think it might help to refer to previous tribunal decisions http://www.informationtribunal.gov.uk/Public/search.aspx, as the tribunal relies on and refers to these in deciding on a case.

On first read, I was surprised at the IC's comment that because of the "very technical and legalistic nature of the withheld information", he didn't think it would "significantly further the public understanding of the general issues relating to student finance". I thought that was a wee bit insulting and presumptious - how do they know we the public (or more specifically, the 250,000 graduates directly affected by Erudio's actions) don't have the capacity to understand?! I read in the ICO's own guidance that info can't be withheld because it's perceived that the public might have trouble grasping the technical or legal aspect of the information, and I'm sure I've seen this approach rebuked before by the tribunal.
BIS claim that Erudio have invested a great deal of time, effort and cost in explaining the remediation situation to borrowers... I'd rather have something based on fact (however technical) and law in the S&P agreement than the ridiculous, confusing, waffling shambles of an explanation that Erudio posted on their website. If anyone's willing to PM me with details of being messed about with 'CCA remediation', I can pass this on to the tribunal - any personal info will go to the tribunal as evidence, nobody else.

This on CRA reporting:
The Commissioner recognises that for borrowers who wish to defer their loan repayments, the passing on of information to credit reference agencies is bound to be of understandable concern and (depending on the individual circumstances) could be of questionable fairness.

I'll ask the ICO what circumstances could make the fairness questionable, but I'm guessing they mean a borrower abiding by the terms of deferment for 15-20 years with the Government lender, then being forced to agree to additional terms imposed by a new private sector lender (motivated by profit), which aren't acceptable and will likely have a negative impact on the borrower's credit rating.

Another impression I got from the IC's comments is that he believes Erudio started off crap but have improved - based on BIS's submissions, not fact. We should have had the FOS data to rely on, but from what they've said, any new info from date of complaint (March last year) can't be considered. I have a little bit of evidence from personal experience, my own take on it - it would be great if some of you would be willing to make a statement as evidence to the tribunal, give them a good idea of what it's really like to be dealing with these cretins? It should be easy to prove Erudio are on the take, but it takes more than one person's account and a few media reports to prove it.

I'm not even sure if pushing for this info will give the answers we need, but the fact it remains hidden suggests to me that we probably should give it a go. If it gets nowhere, at least we tried

erudioed

Brilliant Anna, well done in getting this far. Its an amazingly detailed discussion if nothing else, and probably the most in depth of anything I've read so far. Your arguments, as he listed, were, i think, stronger than the replies/concerns he gave for refuting you (maybe thats because im on your side but i thought they were wrongly refuted when weighting his answer/your argument). You have made some incredible headway. I think many of us should be able to help see how far we can get on this one.
He certainly thinks Erudio have improved and it was just teething trouble...but again, just based on my own standard experience, for the 2nd year in a row, and the first since C(r)apquest have taken over, i am awaiting my deferral form and already within the 8 week period.

rizla_king

I would say there is a fair bit to hide in that agreement, which is why the resistance.

anna2007

erudioed wrote: »

i am awaiting my deferral form and already within the 8 week period.

How far into the 8 week period erudioed? Anyone waiting should fire off a complaint and take it to FOS, if only to highlight to Erudio that anything less than the 8 weeks won't be tolerated... after they went to the bother of correcting their email to me... here it is again, from their 'Senior Operations Manager', Mr Gary Burns:

In accordance with the regulations governing the Mortgage Style Student Loans (as prescribed by the department of Business, Innovation and Skills), we automatically issue all deferment renewal application forms eight weeks prior to the end of the current deferment period, not six as stated in the email. This was unfortunately a human error by an administrative colleague dealing with your email. I apologise for any confusion this may have caused.

On the ICO complaint, my problem with it, and I said as much to the ICO, is that we're arguing for the release of information we haven't seen - how can you possibly make a well reasoned argument? I think the only approach is to throw everything at it, and hope some of it is relevant and sticks!

Both BIS and ICO are relying on the clause in the S&P agreement which says Erudio must abide by all relevant legislation etc, as well as the credit agreements. The borrowers know Erudio aren't doing that. BIS admit here

BIS is not responsible for the actions of the purchaser following sale. As you will be aware from information already released, the terms of sale require the purchaser to act within the law, and in line with loan terms and industry codes of practice. BIS had no ongoing duty in this respect, which is a matter for the Financial Conduct Authority.

Shocking, but not surprising, BIS won't enforce that clause, it's left to the borrowers to deal with Erudio's !!!!!!. BIS aren't the creditor for these loans anymore, but they're still our elected Government, so have a duty of care that extends beyond the credit agreement, to ensure that the citizens they represent haven't been f'd over, as a result of their policies and decisions. For BIS to claim they no longer answer to us, or are no longer responsible for the mess they created, simply isn't good enough. If there's evidence of Erudio breaching that clause in the S&P agreement, why is BIS not taking action to protect us?

Another thing is the fact that the S&P agreement clearly states the process Erudio must follow on receipt of a deferment application (DAF isn't defined anywhere in the agreement, so the application could be made on the bog roll you use for number 2's, if you wanted to do that ).

9.3.5 In determining whether a Borrower is entitled to defer, the Deferment Administrator will:

(A) ascertain the Deferment Level each year for the period between 1 September and the following 31 August in accordance with Clause 9.3.6;

(B) assess the Borrower's gross Income by aggregating all amounts which Borrowers are required to disclose in the deferment application form and which are included in the calculation of gross income; and

(C) check that the evidence specified in the deferment application form as required to support the application is provided.

That's ALL Erudio are required to do per the S&P agreement. Nothing about borrowers having to agree to Erudio's extra terms on data processing in order to get deferred. We don't know if any of this is even relevant to the withheld information, but telling the tribunal about it at least helps them understand why we need the information.

Mr_McGuffin

Thank you Anna for your efforts with the ICO and the purchase agreement redactions.

Interesting if the ICO's own guidance contradicts its reasoning in agreeing that the requested information should be withheld.

Anthony Odgers states: 'BIS is not responsible for the actions of the purchaser following sale.'

But as clause 15.1 of the sale and purchase agreement makes clear, BIS agreed to 'co-operate' with Erudio to 'determine a plan' for 'communications' relating to 'the Remediation Programme' (definition redacted) and 'any other proposed remediation actions'. BIS of course also agreed to approve, in writing, other key documents central and necessary to the future actions of Erudio. BIS may want to defend the efforts of Erudio in 'explaining' the remediation process, as this is also the work of BIS.

'CCA Remediation' was clearly a central aspect of the Erudio sale in 2013, with its provisions for whatever the secret 'Special CCA Claim' and 'Remediation Information Claim' are. It is also an issue in the (delayed) Honours plc annual report, for the second securitised tranche of loans:

https://beta.companieshouse.gov.uk/company/03702189/filing-history

See Full Accounts, 23 Feb 2016. I can't copy text from it but 'CCA remediation' elements are bottom page 2, p 5, auditors report p 7, and note 17 on page 25. The gist of it is that Honours plc has estimated a 'provision of liabilities and charges' of £10.9m for 'potential borrower redress liability', though this could change as 'a formal remediation plan is yet to be finalised and discussed with the FCA'.

These accounts were audited by PricewaterhouseCoopers. Back in 2013 PwC worked for BIS to run the sale that resulted in the purchase of loans by Erudio. It also produced the 'PwC Remediation Report', defined in the sale and purchase agreement as 'the report addressed to the Purchaser which sets out the result of PwC's work in relation to the Remediation Programme'. BIS apparently agreed to provide a 'hold harmless' agreement to PwC 'in such form as PwC may require' in relation to this 'Remediation Report' (11.2.6).

erudioed

Nice find Mr McGuffin!

I also note in the Honours Plc annual statement for the 2nd loan sale (the one before ours) that you link to this very interesting quote on P 17, directly below the 2nd Total line :

"The student loans themselves are written on favourable terms to the borrowers who may defer repayments if they earn less than the current deferment threshold (which was £26,727 per annum at the year end). Providing that all borrowers keep their account up to date, they may also be entitled to have their loan cancelled. In such circumstances HTL will receive an indemnity payment from the Authority."

Makes one wonder whether what Anna is very close to having re-redacted (if thats a word) might contain a similar bombshell. And that would be another bombshell that all parties would like to be kept a secret. It would be hard to argue that was not in the public interest if it was also a part of the Erudio loan sale!

Another comment on this gem: "Anthony Odgers states: 'BIS is not responsible for the actions of the purchaser following sale.'".
I know for a fact BIS was in frequent communication with Zach Lewy during the early months after the 1st deferment period rolled around, especially during the 'Direct Debit Thefts Scandal', or taking DD payments from the deferred. In fact, i was told they were in daily communication as Arrow had daily data coming in on who's accounts had been raided. Between them, they hatched the plan of talking to the press to fight the fire, culminating in Zach Lewy being grilled by Martin Lewis on BBC radio if memory serves me right. It was through BIS getting involved that Erudio/Arrow admitted that around 500 accounts had had this happen, which we all know was way into the thousands.
'BIS may not be responsible' for the actions of the purchaser but they had (and maybe still have) a mutual interest at that time to make sure things didnt break down, as well as having a very strong influence over Arrow Global when something did happen.

anna2007

Thanks Mr McGuffin, I forgot about BIS rubber-stamping the DAF etc, and missed the bit in the S&P agreement about their input on 'communicating' (if you can call it that) the Remediation programme to us. Mr Odger's claim that BIS isn't responsible for Erudio's actions, or that they have no ongoing duty following sale, looks pretty lame now

What is it with these 'remediation programmes'? I was reading that the remediation nonsense also went on with the bail-out of Northen Rock, now NRAM plc (backfired somewhat when borrowers owing over £25k claimed interest rebate, as their agreements incorrectly stated they were covered by CCA). Deloitte reported on remediation for NRAM too (brought under the control of UKAR in 2010) - here's a copy of Deloitte's summary report.

This annual report by NRAM could give some insight into 'remediation', and why it's being applied to our accounts - an alternative to the stated reasons of Erudio wanting to fully abide by the law and ensure the proper administration of our loans...

The Board continue to believe it is appropriate to assess performance based on the underlying profits of the business, which excludes non-recurring costs, particularly those associated with the integration of B&B and NRAM and the remediation of inherited regulatory defects and certain gains such as the repurchase of our own liabilties at a discount. Also excluded are movements in fair value and hedge ineffectivenes relating to financial instruments which are expected to be held to maturity as opposed to being traded.

Repurchasing your own 'liabilities' at a discount is probably related to stakeholder equity (and as Mr McGuffin's link to Honours' accounts shows, they've made a provision for liabilities relating to CCA remediation costs, I'm guessing Erudio's accounts have the same provision). If they can then 'repurchase this liability at a discount' (because they've later received compensatory payments from BIS, so the provision's no longer required?), wouldn't this push up the share price, as it would for a shares buyback, increasing dividends to the shareholders? With so many fat fingers in the student loans pie, and loans being transferred from Carval to Arrow Global to who knows where else, the share buyback thing is no doubt going on too.

It's possible that the remediation programme is nothing more than a convenient accounting mechanism, which allows dividends to shareholders to be increased. It makes far more sense that the remediation saga with our own loans is about extracting profit for shareholders, rather than a principled stance by Erudio on correcting an historical non-compliance with CCA.

It's also entirely possible that compensating payments to offset the cost of remediation are being (or will be) made to Erudio, and this is detailed in the redacted information on remediation - why would a private sector purchaser, only interested in maximising profit, be willing to waive interest on borrowers' loans, when it's down to SLC's 'error'?). Given how little Erudio paid for the loans, it would be scandalous if they were to receive further payments for remediation (or, as erudioed points out for the Honours loans, an indemnity payment for cancelled loans).

This "hold harmless" agreement between pwc and BIS is interesting - if the remediation programme was truly only about rectifying past errors and non-compliance with CCA, why do pwc need an indemnity, freeing them of any responsibility for liability or damages arising out of their programme?

plong979

Once again the adjudicator sides with the scum. Again my compliant is escalated to no doubt to dismissed again as they are on the side with the scum.

Seriously going to not update my address next time I move as I am !!!!ing done with this !!!!. !!!! my credit rating I don't care any more. I'll soon be to old to get a mortgage so !!!! it.

gardenia101

GinOClock wrote: »

...I have been given another 'remedy of account' and waiver of interest etc as the notice of sums of arrears they sent me in December 2015 (while my case was with FOS) is incorrect. It would seem CCA remediation is still ongoing, although I cannot understand why.

anna2007 wrote: »

...There's also the fact that Erudio seems so unwilling to give anyone an accurate annual statement - I don't know anyone that has had one. I'm still waiting on a correct account, months after a FOS decision telling Erudio to put it right. Why are Erudio so reluctant to get that part of the agreement right, it's surely not so difficult, SLC managed it for many years? Usually for someone in deferment, you add a year's RPI interest to the opening balance, get a closing balance, job done. It does look like Erudio are deliberately getting balances wrong via 'CCA Remediation' ... but how does that legally benefit Erudio and/or BIS? Probably more to do with damage limitation...

Edit: I'd encourage anyone (that could be everyone?), if your annual statement's wrong, make a formal complaint to FOS. That would be a mighty amount of complaints. I can post up my own complaint if it helps - just don't expect FOS to be consistent in its decision

I've certainly not had either a correct statement (in any format) or any notification/explanation about why my account is in remediation.. Sadly neither of these seem to bother FOS in the slightest - I've asked the question about what happens when I still don't get either following my second FOS complaint. Yet another question they've decided to ignore.

Anna - have PM'd you.

BorderReiver14

plong979 wrote: »

Once again the adjudicator sides with the scum. Again my compliant is escalated to no doubt to dismissed again as they are on the side with the scum.

Seriously going to not update my address next time I move as I am !!!!ing done with this !!!!. !!!! my credit rating I don't care any more. I'll soon be to old to get a mortgage so !!!! it.

Totally understand your frustration and its your call on how to proceed in dealing with Erudio. I take it you will refuse the ombudsman decision? What was actually said?
I used a modified DAF last year and Erudio accepted it but this year they have not and am currently waiting on the FOS to pull its finger out. I have told them I will not be signing any DAF and will not agree to any FOS resolution that says I must. Afterall, what was good enough last year must be good enough this year and beyond...
I know I have met all my obligations so if the FOS does not work out I'll be sticking to my side of the bargain and just let Erudio jog on because they cannot even hope to win a case.They just want to push your buttons and hope you fail to keep to the agreement so they can screw you.