PPI: Documents for Bundle
Useful Documents for PPI Bundles
If anyone has any useful documents to incude with budles please can you send them to: alan@consumeractiongroup. co.uk
Codes of Practice
Tthe following documents are the historical Codes of Practices for the ABI and the FLA. These will be of particular use for claims relating to PPI prior to FSA regulation of PPI in 2005, although the latest FLA Guide is also included.
There may be some basis for citing fraud, however it does have to be remembered that the burden of proof is on the Claimant - unlike with the Misrepresentation Act which switches the burden of proof.
The following caselaw allows for fraudulent misrepresentation where the person making the representation gave it without caring if it was correct or not. The finer detail is discussed elsewhere on the forum - and of course, you are reminded that you should seek proper legal advice before proceeding with any claim.
Including PPI in the total loan and adding interest.
Personally I am not 100% certain of this issue myself - but again this caselaw is discussed elsewhere on the forum, and the full text is always useful.
Burden of Proof in Relation to Misrepresentation Act Claims:
This is extremely useful in that it establishes that a customer should be able to rely on the information given, and that even without an intent to misrepresent, if the consequences of a misrepresentation are such that a customer is disadvantaged then that is enough.
It also establishes that a clause in a contract which states that a signature indicates full acceptance is not valid where it would be unlikely that the customer would have the skill and inclination to go through the fine detail.
In many ways this is a killer piece of caselaw - read and enjoy:
Broker's Commission and Resposibility
This case may be of use to those who have taken out loans through a broker. It sets a precedent regarding brokers commission and responsibility, and it would be useful for a court bundle in this situation. (link to full judgement below):
Decision in Hurstanger v Wilson  EWCA Civ 299
This is may be of relevance to all members who pay fees to brokers.
The borrowers (Mr Wilson and Ms Burton) obtained a loan through a broker. The broker had a fiduciary relationship with the borrowers and received commission from the lender.
At issue was whether the broker had received secret commission from the lender and whether informed consent had been given by the borrowers.
The borrowers signed a form which indicated that commission might be paid but they argued that informed consent had not been given because they did not know the amount of the commission.
It was held that the broker may only receive commission if the borrower consented to this with full knowledge of all material circumstances. The Court of Appeal held that the commission, in this case, was not “secret” but informed consent had not been given as the amount of commission had not been disclosed. (Accordingly they awarded the amount of the commission plus 1.29% simple interest from the date of the agreement’s inception).
The Court also held that in cases where the broker does not disclose that she is in receipt of commission from the lender, the commission will be “secret”, the broker potentially guilty of fraud, and the entire loan liable to be rescinded.
The legal teams of all members who pay commission to brokers should consider the impact of the decision on their business.
Full Text: Wilson v Hurstanger
Conflict of Interest and Commission/Bonuses
This is not for the faint-hearted, and be aware that you may have to argue this in court. However, if you are looking to back up an argument of fraudulent misrepresentation, then this is a useful starting point, and well worth including in your bundle.
It is a 36 minute discussion that was broadcast on the Radio 4 Money Box programme in 2005. I have included the original BBC News page from the website, an mp3 of the full interview, and a copy of the transcript.
Could be well worth thirty-six minutes of your time - but again, please do not consider this route unless you feel able to argue your case:
Full Discussion 33.8MB - You have been warned!!!
Another useful document regarding conflicts of interest comes from the Chartered Insurance Institute. It is guidance for members on dealing with potential conflicts of interest, and whilst it is not binding on loan companies, the document must be seen as a very authorititive view of potential conflicts of interest and the risk to customers where those conflicts are not properly managed.
Of particular note is this paragraph on mitigating potential conflicts:
Some examples of methods which can be used to manage potential conflicts include:
- a hospitality and/or gift register;
- restrictions on gifts and hospitality individuals may accept;
- information barriers or ‘chinese walls’ between different business units to prevent free flow of confidential information;
- changes to remuneration arrangements for the firm and individual staff to avoid *incentives and targets which may encourage misuse of information or giving poor advice;
- increasing disclosure to clients and obtaining informed consents from them;
- information systems designed to provide timely and accurate information;
- reporting structures to build in checks and balances to promote objective judgement;
- recording of and justification for decisions when selecting products or suppliers;
- documenting why and how recommendations are being made to customers;
- complaints handling and claims settlement procedures.'
I would particularly highlight the advice regarding remuneration.
This is the link to the full document.