Financial Claims – Our Work With The Financial Ombudsman Service
For a number of years, Athena Solicitors LLP has been working with tirelessly to present similar fact evidence complaints to the Financial Ombudsman Service (“FOS”). This work has evolved as we have been consulted by hundreds of clients making very similar complaints about timeshare products which have been funded by UK banks including, Shawbrook Bank Limited, Barclays Partner Finance, Hitachi and GE Money.
In respect of these products the complaints are broadly the same, including complaints surrounding timeshares being sold as an investment or at least an asset, timeshares being mis-described as giving access to cheaper holidays and/or exclusive benefits. All of our clients complain that the maintenance fees have been escalating, they have difficulty booking the holidays contracted for and their timeshare is not capable of being given away, let alone sold. Whilst in many cases it is possible to terminate the timeshare agreement, clients are left with a substantial liability being either loss of capital invested in these products or continuing liability in respect of outstanding loans.
Whilst there is a great deal of publicity about litigation in Spain, our experience of litigation in Spain is that it can be time consuming, not without its difficulties and, whilst Judgments are being obtained against timeshare developers, many clients that contact us are complaining that the Spanish lawyers are having difficulty enforcing these Judgments. It is with this in mind that we have focused claims against UK banks as in the event of a successful outcome there is a high probability that the banks will be in a position to compensate their clients should their complaints be upheld.
A natural problem of these types of complaints is that very often the banks will, when confronted with allegations of pre-contractual misrepresentations, adopt the position that it is the client’s word against the timeshare developer and that therefore there is no evidence of misrepresentation. We have overcome this problem, we believe, by ensuring similar fact evidence has been presented to FOS. Every case is supported by a bespoke detailed witness statement with the result that FOS, after a number of years undertaking similar fact evidence review, has confirmed that it now appreciates the extent of the problem, and the similarity of the complaints. To enable us to progress our claims efficiently FOS accepts receipt of all of our complaints electronically and we have regular communications and telephone conferences with senior management at FOS. We have received confirmation that this long process is now drawing to a close and FOS anticipates issuing decisions shortly. FOS has apologised to our clients as to the length of time it has taken to resolve our complaints, said delay being caused by the sheer number of complaints being received, the issues it has to look at, the complexity of the underlying contractual documents and the surrounding law.
We have presented alternative complaints so that our clients’ claims have the best chance of success including:
- Allegations of misrepresentation whereby the banks are jointly liable pursuant to Section 75 of the Consumer Credit Act 1974.
- Allegations of irresponsible lending.
- Allegations that the complex contractual documentation signed by consumers gives rise to an unfair relationship contrary to Section 140A of the Consumer Credit Act 1974.
- In certain cases, the timeshare developer acting as the bank’s broker was not duly authorised by the Financial Conduct Authority and the loans are therefore void as a breach of Section 19 of the Financial Services and Markets Act 2000.
We are pleased to confirm that we have now seen at least one detailed decision from FOS which has upheld our client’s complaint in full with the client being awarded a full return of all money paid for their timeshare, 8% interest and a direction that the bank assumes responsibility for the client’s timeshare. It is hoped that similar decisions will be applied to all of our complaints although it is accepted that each case will, to some extent, turn on its own facts.
As we have chosen to proceed via the FOS route, our clients’ complaints are being investigated without risk to them. This is in contrast to undertaking Court proceedings where clients would be liable for adverse costs should a claim not be upheld. The additional advantage of the FOS is that it has an ability to look at complaints and make decisions that are “fair and reasonable” rather than limiting any decision to the black text of the contractual documents.
A typical case that we encounter is dealt with on the following basis:
- The client’s instructions are received.
- The client’s documents are reviewed.
- The client is provided with a detailed written opinion regarding legal arguments for terminating their timeshare and any claims available to them against a UK lender.
- A letter of termination is served on the timeshare resort, setting out all relevant legal arguments. Typically, the letter of termination runs to several pages, setting out relevant case law and statutes.
- A detailed witness statement is then taken from the client.
- A letter of complaint is then sent to the bank. Again, the letter of complaint runs to several pages of legal argument and attaches all of the client’s evidence and supporting similar fact evidence (e.g. redacted statements from other clients).
- In the event that the bank denies the complaint, which is often the case, the claim is then submitted to FOS. Again, the complaint to FOS involves preparing detailed particulars of complaint setting out all relevant facts and law to maximise a client’s prospects of success and again the complaint is supported by the client’s key documents, the client’s bespoke witness statement and similar fact evidence.
We feel, after undertaking the work that has consumed this firm for a number of years, that we are finally moving towards reaching a resolution and a favourable outcome for our clients. Due to the complexities we cannot of course given guarantees, but our clients’ cases are being robustly presented and we believe that the same have good prospects.