£12k Bill!

CharlieWannaWin

Thanks everyone, I really appreciate your comments. I've asked her to send me a copy of all the paperwork so I can get company names etc and see the small print.

dunstonh

As it stands, it is either a breach of FCA guidelines or the CMC has created such a mess that the firm has resorted to that action.

Please do keep us updated. Knowing the wording of the letter will be helpful.

magpiecottage

dunstonh wrote: »

As it stands, it is either a breach of FCA guidelines

Which means an instant referral to FOS is appropriate.

or the CMC has created such a mess that the firm has resorted to that action.

Which would have the potential to go to the Legal Ombudsman

Please do keep us updated. Knowing the wording of the letter will be helpful.

Absolutely. The more we know, the more we can help.

Stevech1963

Hi I am Charlotte's brother-in law, for which this case concerns and this matter seems to be escalating and is looking serious and we don't know which way to turn now, I will state the facts briefly, so that you are aware of them and would appreciate any help or advice you can now give on this matter.
I received one of these ppi calls around 2 years ago now and usually I ignore them, as having a secure job, I do not usually take out ppi, but this call asked if I had a mortgage and if I had secured my mortgage from a mortgage broker, which I had and I was told that the broker was likely to have sold me the wrong product and also likely to have charged me a fee, which I would have been unaware of and then this company ( mortgage audits) stated the usual no win no fee waffle, that they use, I asked " What if I proceed and lose the case" to which I was told that an insurance covered such an outcome and so I pursued the matter.
I received some legal documentation from this company, which I filled in and returned and then I received a letter from a Lorrells solicitors, stating that they were taking over the case from mortgage audits and I received paperwork from Lorrells, so I telephoned them and they stated that they had taken over mortgage audits and as there were so many claims to be dealt with, they were proceeding with just 25% of the claims most likely to succeed including mine. Again I telephoned Lorrells and enquired as to what conditions this consisted of and again they told me that they took 25% of any fee won, I again enquired as to what happens if the case fails and I was informed that an insurance was taken out which would pay costs if it did fail, I stated to them during the telephone call that I was willing to proceed just as long as there was insurance and there was no comeback, financially or in any other way on my part and they assured me this was the case. The case continued and I had to fill in quite a bit of paperwork and when I had a question, I would telephone Lorrells and when I did call, I raised the question of any costs and I was reassured that the insurance taken out by Lorrells covered any costs, Lorrells then issued court proceedings against the mortgage broker with whom I had taken the mortgage deal out with and then just a couple of days before the case was due to be heard in court, Lorrells sent me a letter stating that they no longer considered the case would succeed and they were dropping the matter, this concerned me and I again telephoned Lorrells, who reassured me that all costs were covered by the insurance and that they were now closing the case, this was in September 2014. A couple of weeks later, I received a letter from the mortgage broker, threatening to sue me for all the time and extra work that he had to do regarding this case, I again telephoned Lorrells and they told me that yes in fact he was in the right to do so and once again I brought up the subject of the insurance and I was told that it did not cover this and so I had to settle this matter with the broker myself, which I did and I received a letter from the broker stating that the matter was now closed.
I heard nothing more and assumed that the whole matter had been finalised and completed, but then on December 16th 2014, I received a letter from Lorrells, stating that the insurance had been declined and that I could be liable for costs, I was mortified and immediately telephoned Lorrells who stated that this letter was simply a matter of protocol and I then sent a letter dated 19th Dec 2014 to Lorrells asking what the hell was happening, but I have never received a reply, I then this week receive a "notice of commencement of assessment of bill of costs" from the defendants solicitor for the sum of £12,583 to be heard in the high court of justice and I have until the 20th March to respond to this.
Today, I have received a letter from Lorrells, who stated that they sent me a letter dated 18th December 2014, requesting that I sign and return a " notice of change of legal representative", and as I failed to return it,they have obtained a court order stating that they no longer act for me!, I never received any letter dated 18th December and this is the first contact Lorrells have made with me, since December 2014.
As you can imagine we are now sick with worry and we would be grateful for any kind of help or advice on this matter
Steve

dunstonh

but this call asked if I had a mortgage and if I had secured my mortgage from a mortgage broker, which I had and I was told that the broker was likely to have sold me the wrong product and also likely to have charged me a fee, which I would have been unaware of and then this company ( mortgage audits) stated the usual no win no fee waffle, that they use, I asked " What if I proceed and lose the case" to which I was told that an insurance covered such an outcome and so I pursued the matter.

Thats a scam. These are known bogus calls. The reasons are fake. Plus, they led with an allegation that the broker was likely to have sold the wrong product despite having no info. Plus, brokers are allowed to charge a fee. Indeed, a broker working on independent basis has no choice but to charge a fee. So, the reasons are completely rubbish.

Lorrells then issued court proceedings against the mortgage broker with whom I had taken the mortgage deal out with and then just a couple of days before the case was due to be heard in court

This would explain the mortgage broker introducing a solicitor.

A couple of weeks later, I received a letter from the mortgage broker, threatening to sue me for all the time and extra work that he had to do regarding this case, I again telephoned Lorrells and they told me that yes in fact he was in the right to do so and once again I brought up the subject of the insurance and I was told that it did not cover this and so I had to settle this matter with the broker myself, which I did and I received a letter from the broker stating that the matter was now closed.

You cannot blame the mortgage adviser. The CMC bypassed the free of charge complaints process and attempted legal action. The reasons appear to be bogus based on what you have said. Remember that the complaint they make is in the name of the individual and any allegations made by them are effectively being made by the individual. The CMC were probably hoping the mortgage broker would offer something to make it go away.

I then this week receive a "notice of commencement of assessment of bill of costs" from the defendants solicitor for the sum of £12,583 to be heard in the high court of justice and I have until the 20th March to respond to this.

It sounds as if the broker is going for a counter claim for costs for frivolous action.

As you can imagine we are now sick with worry and we would be grateful for any kind of help or advice on this matter

I would suggest you seek legal representation from a local solicitor. Explain everything that has happened and have documents to hand. You may also wish to put a complain into the legal ombudsman against the CMC for the advice and service they have provided and the position it has put you in without providing good warning of the risks.

There are risks if you start legal action and this is one of them. So, having a local solicitor look at what has happened may help deflect some of the responsibility from you to the firm. You need more than people on the internet with bits of info giving advice. However, you do need to be prepared for a bill as, based on what you have said, the broker is within their rights to do this.

You may also wish to read the allegations made against the mortgage broker as there is a strong possibility that a number of them are bogus (letters of this type tend to be template style and make allegations which a broker with good records can show as lies). It helps to know if you have been party to a bogus action.

Poppy9

Stevech1963 wrote: »

A couple of weeks later, I received a letter from the mortgage broker, threatening to sue me for all the time and extra work that he had to do regarding this case, I again telephoned Lorrells and they told me that yes in fact he was in the right to do so and once again I brought up the subject of the insurance and I was told that it did not cover this and so I had to settle this matter with the broker myself, which I did and I received a letter from the broker stating that the matter was now closed.

So you settled with the broker and have a letter saying matter closed and they then later issue you a bill? Agree you need legal advice.

safestored4

If the broker has indeed incurred considerable legal costs from resisting what now appears to be a vexatious claim, then good on them for seeking recompence. You might now be sick with worry. I am sure that the broker was not sleeping easy when first faced with your solicitors demands.

magpiecottage

Can you please give both the name and address of the Solicitors AND the CMC.

We need to know exactly who we are talking about here.

We also need to know if you live in England or Wales.

It makes a difference.

We need, too, to know the name of the broker.

The solicitor should have known that if the free service was used then this would not have happened but should have warned you of that risk.

They are, though, at fault for taking on business that resulted from a cold call if they are in England or Wales - as is the CMC for obtaining business for a solicitor in that way.

I think the matter can probably be sorted out via the Legal Ombudsman but we need to know more.

magpiecottage

I presume, by Mortgage Audits, you mean this business.

The website says "Our team of audit specialists". From what I can make out, this is a "team" consisting of Ernest Edward Alexander Marshall who describes himself as a Director and "Mortgage Consultant" and Patricia Jane Marshall described as a Director and "Personal Assistant".

Its net assets as at 31 March last year were minus £6,900 (i.e. its liabilities were £6,900 more than its assets) and it had about £7,300 in cash. So it may have had other team members but it seems to be a very small one - or about to face some unhappy employees at the end of the month!

Mr Marshall has posted his three certificates for the Certificate in Mortgage Advice and Practice. However, two of these are simply stage certificates. They do not qualify you to advise on mortgages. The third shows him to be at the minimum level to do that. It is equivalent to A-level.

There are higher level mortgage qualifications. I hold one from another awarding body and used it as an exemption from the qualification Mr Marshall holds to obtain the Advanced Certificate in Mortgage Advice and Planning. I had to take three further qualifications to achieve this and gained distinctions in all three.

I say all this not to show off but to demonstrate that I know what I am talking about.

I am also qualified in complaint handling, general insurance (which includes PPI) and equity release.

I do come across the odd missold mortgage, but they are few and far between.

The first difficulty is that, to win, you need to demonstrare not only that there was a fault but that you have lost out as a result. This all needs to be done on the balance of probabilities - i.e. it needs to show that your assertion (or Mr Marshall's assertion) is more likely than not to be true.

If you say "I was not given the 'Key Facts' document" and the broker can produce it then you are sunk. If they cannot, they can say it was provided because that was their procedure (as dictated by the regulator) but no copy survives. That might on its own be sufficient to persuade an ombudsman or judge that the assertion is simply equally likely.

If not, though, you face a second hurdle - causality. It needs to be shown that this affected what subsequently happened. At this point, the broker can obtain a copy of the mortgage offer from the lender. That will show exactly the same information (bar any minor changes between applicaion and offer). You will clearly have received and accepted that because unless you sign to say you have the loan would not have been made.

Mr Marshall suggests on his website that if you paid for mortgage advice but the broker received a "secret" commission from the lender this is cause for a claim. This is true - but the "Key Facts" document and the mortgage offer both specify what the lender will pay the broker - so it is hardly a secret.

Mr Marshall suggests on his website that taking a non-status mortgage is cause for complaint because a full financial status one would have been cheaper. This might be true but in the period leading up to the credit crunch, lenders were often happy to allow borrowers with sufficient equity to have standard terms without bothering to check income.

Mr Marshall suggests on his website that brokers should have obtained proof of income. However, this was not Who Wants To Be A Millionaire. It was not the broker's job to ask "Is that your final answer?".

Mr Marshall also says selling an interest-only mortgage without a repayment vehicle is a valid complaint.

In theory, he is correct but for the last six years or so, it has been very difficult to get an interest-only mortgage without persuading the lender that you have a realistic repayment plan.

Prior to that it may have happened but you have a problem. A complaint must be brought within six years of the original event giving cause for complaint (which will have expired) or, if later, within three years of when the complainant became aware, or ought reasonably to have become aware, that they had grounds for complaint.

Since 2004 regulator has forced all lenders to send a clear statement, in a prescribed format, to all mortgage borrowers stating, amongst other things, that your mortgage (or part of it) is on an interest-only basis and you need to have a repayent vehicle in place. So you will already have had several of those.

Consequently, a broker will almost always be able to timebar a complaint of this nature.

I will not continue on this vein. However, I will point out that Mr Marshall's business seems to be using court action, rather than simply going to the Financial Ombudsman Service. That is an extremely dangerous course to take because at that point the broker is no longer bound by the FCA's "DISP" rules, which make it difficult (though not impossible) for him to recover his costs.

That seems to be why the broker in this case was able to make the threat he did.

Stevech1963

Hi guys and thankyou for all your comments and advice.
I believe that the original CMC were called Mortgage Audits, but this was in the very early days of the claim and as stated I then received notification after just a couple of months that Mortgage Audits had either ceased trading or were handing over their cases, including mine to Lorrells of London and as stated they contacted me and I had to sign documentation to state they wee now acting for me. When this happened, as previously stated I clarified on the telephone that there was no risk to me and I was told that the insurance was in place should the case fail and I was also informed that they were only taking on the top 25% of cases likely to succeed, as there were so many to deal with.
Lorrells address is as follows
Lorrells LLP, 16-20 Ely Place, London EC1N 6SN


I had large amounts of legal documentation to fill in with Lorrells and not once was I told that there was the slightest risk to me by these solicitors, they simply told me to sign the paperwork and send back. Court proceedings were issued against the mortgage broker and then just a couple of days prior to the court case being heard, Lorrells sent me a letter stating that the case was unlikely to succeed and were therefore dropping the case and even then I spoke to them and they assured me that the insurance was in place to cover any costs incurred. Back in September 2014, I then received notification that the case was now closed and I presumed that was the end of the matter.
Then on 16th December 2014, I received a letter from Lorrells stating that the insurance had refused to pay out and that I could now be liable for costs, again I contacted Lorrells, firstly by post and then when I received no reply, by telephone call and they assured me that the letter sent was purely a matter of protocol and that is the last contact I had from Lorrells, until this week, when I received a letter and court order from them, along with a court order, stating that I had not returned a " notice of change of legal representative" form, which I never received in the first place!

The Mortgage broker that I used was as follows :-
Cozens&Dean Ltd, Mortgageforce,
13a High Street, Chatteris, Cambridgeshire PE16 6BE


I totally understand why the mortgage broker had to instruct a solicitor once legal proceedings began and I do not blame the Mortgage broker at all and I settled matters with this company, in the sum of £500, which they accepted and in a letter dated 6th October 2014, they wrote " I accept your claim was driven by what your claims firm led you to believe and understand that you went ahead with what you thought was a legitimate claim even though , with hindsight, you should have contacted us with any concerns first. Your apology is fully accepted and with the nominal amount of £500 towards our expenses accepted, I confirm the matter is now closed"


I now have this " Notice of commencement of Assesment of Bill of costs" which totals £12,583 from the broker's solicitor, who is as follows
DAC Beachcroft LLP, 3, Minster Court, Mincing Lane, London
EC3R 7DD.


Whilst I understand that the broker's solicitor has costs, all I ever did in this case was to be advised that this case and claim was being brought against the broker, due to the fact that I had been sold the wrong mortgage etc and I was advised on a number of occasions, by Lorrells, whom not once informed me of any risk to me financially, in fact they assured me on many occasions, that the insurance taken out by Lorrells would cover any costs involved in the matter and it seems to me that once the case was dropped by Lorrells, back in September and then in December 2014, when I was informed that the insurance would not pay out that Lorrells distanced themselves and have cease to act for me, which is something I did not know, until I received the court order this week and so it seems they are getting out and now leaving me to face the consequences!


Once again everybody, I appreciate all your help, advice etc, I will be seeking legal advice tomorrow as well as contacting the financial ombudsman service, but please continue with any other comments or advice that may be helpful in this case.


Steve