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Independent Banking Advisory Service |
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Mortgage Shortfall Debt Claims - OFT Official Complaint by IBAS What did the IBAS complaint to the
Office of Fair Trading (OFT) against Bradford & Bingley really mean? The OFT welcome feedback from individuals but it "has no legal powers to become involved in individual disputes" and cannot help individuals "directly" with a complaint. For that reason we made a complaint ‘collectively’ on behalf of our members who had been or were customers of Bradford and Bingley or their subsidiaries.
You will find our 2012 national newspaper comments (plus many more over many years in the News and archives sections of our site) - these show that IBAS can be relied upon and has been in existence helping business bank customers with their mortgage shortfall debt claims and demands and personal guarantees and Director's personal guarantees 'calls' and demands since 1992. IBAS has also featured in BBC TV and ITV News items and programmes on UK banking and business banking issues We provided the OFT with a portfolio of cases reflecting core issues in the complaint which alleged:
The OFT invited IBAS to submit further cases with additional information and have
issued case forms to IBAS for those included in the original portfolio of cases and
for those cases in the supplementary portfolio that is now being drawn together so that
these complaints can be considered and properly investigated by the OFT. It should be noted that when referring to B & B, Mortgage Express who as a "wholly owned subsidiary of Bradford and Bingley Group" were included within that general terminology. What can the OFT do - what powers do they have? Under the Consumer Credit Act, any business wishing to be involved in activities relating to credit must have a consumer credit licence. This means both lenders and collection agencies. "The OFT have a duty to enforce the Act and monitor the fitness of all licence
holders". This monitoring includes considering whether unfair business practices have
been employed by a licensee. The OFT state that when they receive "complaint information alleging that a
licensee has engaged in practices of the type detailed in our guidance or alleging other
concerns about fitness, we investigate such matters to establish the facts and to
determine what action, if any, might be appropriate". IBAS made the formal complaint against Bradford & Bingley to the Office of Fair Trading (OFT) under the OFT's Unfair Business Practices section of their Debt Collection Guidance document OFT 611 which was incorporated within OFT664 issued in July 2003. The press articles in the Financial Times of 17th June 2004 and the Sunday Express - Your Money section of 20th June 2004 outlined the bare fact of the IBAS complaint to the OFT. Many have enquired about the background to this complaint and where OFT documents to which our complaint refers can be found. The Debt Collection Guidance document OFT664 was the final guidance and response to the consultation papers and guidance previously issued in OFT611 to clarify unfair business practices within the debt collection sector. Over a period of time from February 2001 until July 2003 the debt collection industry has been involved in considerable consultations with the OFT on various issues of concern to the OFT to enable deliberation and final guidance to be issued which would be binding on the industry. OFT664 2.42 states "Now that the guidance has been issued in final form we expect debt collectors to abide by it." and the OFT believes that the final guidance "strikes a proportionate balance between the need for consumer protection and industry's ability to collect its debts in a fair manner." The OFT also state that within the scope of the guidance "licence holders should abide by the spirit as well as the letter of the guidance." The IBAS Mortgage Shortfall Claims unit are constantly in contact with lenders, solicitors or debt collection companies acting as lender's agents. The lenders and their agents are all encompassed by the OFT Guidance and the scope of the OFT guidance provides for sanctions on Consumer Credit Licence holders if their debt collection practices cause the OFT to question their fitness to hold a consumer credit licence. The OFT debt collection guidance applies to collection of debt once an account is in default. Collection of debts following default is an important area. IBAS has found this area to be sadly lacking common sense and normal human compassion. Also, where many lender's recovery staff still consider those in a default position to be 'outside' any regulation or conduct relating to fair and reasonable treatment and who may therefore become 'fair game' for any number of different schemes to compromise them, legally or otherwise. IBAS consider the OFT's guidance is necessary to protect those in debt from financial or 'legalized bullying' and the further threat to fragile family circumstances, due to debt problems. Please note: Lenders will always recommend CCCS and PayPlan for free DMP's (Debt Management Plans) to their customer because they will always attempt to produce payments on the debt claimed - However, DMP's are merely 'management of the debt' which has or is being claimed by the lender it is not negotiating or questioning the legality of the debt or whether it should be paid - these are companies 'managing' your payments for a full debt collection on all debt claimed as being owed. If a DMP is entered into and accepted by the borrower all debts claimed will then continue to be 'chased' for payment - until they are fully repaid.
Independent
Banking Advisory Service (IBAS)
is a national, independent, non-profit, unique specialist banking customer
membership organization which resolves banking complaints and disputes and which
has campaigned on UK Banking customer issues since 1992. We provide bank and
banking assessment, analysis, bank comment and content for BBC TV News, ITV,
Radio and national newspapers. |