sd2
Member of DD Central
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Post by sd2 on Feb 1, 2020 11:23:23 GMT
Spoke to financial conduct authority once, I was unhappy with Yorkshire Building society. I pointed out they had liesd about something, reply "banks and building societies don't tell lies" Seriously! It appears they are incompetent when dealing with individual complaints, according to a dispatches programme. I hope financial ombodsman is better.
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Post by shootingstar on Jul 11, 2020 10:06:17 GMT
has anyone else heard back in recent weeks from the financial ombudsman regarding their complaint?
Despite presenting what I thought was a very strong case supported by evidence of value destruction due to the fees, the preliminary response from my investigator is unfortunately that they are not looking to take my case any further at this stage. However I am able to go back to them, so i am curious if other people are in a similar situation and if we can coordinate a good response as most of our complaints will ultimately be similar
the investigator has spoken to me on the phone and sent a detailed response. in short, the main points being made are below
1. there was some dispute as to whether the new PP fees impacted secondary market prices (or whether other factors like reduced dividends were also at play). It sounds like PP have now effectively admitted to the ombudsman that the fees were a primary driver of reduced secondary market prices
2. as to whether they were allowed to change the Terms and conditions, there was apparently a variation clauses in the original T&C allowing them to change things (though ombudsman cant comment on fairness, legality of this). I don't actually have at this point the original T&C, not sure if anyone else does?
3. even though PP seem to admit what they did impacted the secondary market their justification on fees is around effectively making the business viable. The ombudsman refers to FCA guidance: “a variation term may indirectly serve the consumer’s interests in circumstances where other restrictions on the firm mean that the ability to flex rates fairly on existing products enables the firm to continue to exist and the customer to continue to receive the product/service in question”. given heavy capital losses, i'm not sure i fully accept that we would have been worse off if PP had gone bust and the assets simply sold off. Also, why couldn't they have raised money from equity/debt investors rather than destroying client value
4. On being able to exit at zero cost if not happy with the new T&C, my perspective had been that this is surely in principle taking into account everything you had invested pre the fees and what your exit value actually is. Ombudsman however seems to be taking the view that the firm did not impose barriers to exit and differentiating between financial loss experienced (in their view basically "ok") and hard exit barriers like extra fees (which were not introduced).
the specific FCA guidance referred to is: "Firms should consider the consumer’s freedom to exit the contract if they do not accept the variation, and how they can actually do so. This should include the financial and practical barriers in the contractual terms which may prevent them from doing so. Examples of barriers could be exit charges or requiring the consumer to give a long period of notice”.
Ombudsman effectively saying "you did not have to accept the fees". However i was not able to sell in secondary due to lack of buyers vs what i had invested. On all of the above the one i disagree most strongly on in principle is number 4, as i thought the principle was that you should be able to exit at no financial loss.
Maybe there is another part of FCA guidance we can find to support this concept?
does anyone know of other historical precedents where firms have introduced unexpected fees like this?
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p2ploser
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Post by p2ploser on Jul 11, 2020 13:23:04 GMT
has anyone else heard back in recent weeks from the financial ombudsman regarding their complaint? Despite presenting what I thought was a very strong case supported by evidence of value destruction due to the fees, the preliminary response from my investigator is unfortunately that they are not looking to take my case any further at this stage. However I am able to go back to them, so i am curious if other people are in a similar situation and if we can coordinate a good response as most of our complaints will ultimately be similar the investigator has spoken to me on the phone and sent a detailed response. in short, the main points being made are below 1. there was some dispute as to whether the new PP fees impacted secondary market prices (or whether other factors like reduced dividends were also at play). It sounds like PP have now effectively admitted to the ombudsman that the fees were a primary driver of reduced secondary market prices 2. as to whether they were allowed to change the Terms and conditions, there was apparently a variation clauses in the original T&C allowing them to change things (though ombudsman cant comment on fairness, legality of this). I don't actually have at this point the original T&C, not sure if anyone else does? 3. even though PP seem to admit what they did impacted the secondary market their justification on fees is around effectively making the business viable. The ombudsman refers to FCA guidance: “ a variation term may indirectly serve the consumer’s interests in circumstances where other restrictions on the firm mean that the ability to flex rates fairly on existing products enables the firm to continue to exist and the customer to continue to receive the product/service in question”. given heavy capital losses, i'm not sure i fully accept that we would have been worse off if PP had gone bust and the assets simply sold off. Also, why couldn't they have raised money from equity/debt investors rather than destroying client value 4. On being able to exit at zero cost if not happy with the new T&C, my perspective had been that this is surely in principle taking into account everything you had invested pre the fees and what your exit value actually is. Ombudsman however seems to be taking the view that the firm did not impose barriers to exit and differentiating between financial loss experienced (in their view basically "ok") and hard exit barriers like extra fees (which were not introduced). the specific FCA guidance referred to is: " Firms should consider the consumer’s freedom to exit the contract if they do not accept the variation, and how they can actually do so. This should include the financial and practical barriers in the contractual terms which may prevent them from doing so. Examples of barriers could be exit charges or requiring the consumer to give a long period of notice”. Ombudsman effectively saying "you did not have to accept the fees". However i was not able to sell in secondary due to lack of buyers vs what i had invested. On all of the above the one i disagree most strongly on in principle is number 4, as i thought the principle was that you should be able to exit at no financial loss. Maybe there is another part of FCA guidance we can find to support this concept? does anyone know of other historical precedents where firms have introduced unexpected fees like this? Thanks for posting your response. I’m still waiting for my response although my expectations were already low given other instances of the fca / financial Ombudsman looking at other p2p cases, mini bonds etc. They seem to be almost completely useless for the little person and appear far more in favour of business than anyone else. The only time they take action is when publicity makes them look so bad that they have no choice, or some government committee starts looking in to what they have (or more likely haven’t) done. I think we all should be thinking if any sort of p2p investment as being effectively un-regulated and make our decisions based on that as effectively that’s where we are. The fca regulation for this stuff is in name only. As far a pp goes I got out while I could at a small loss as I didn’t think the platform had much of a future for small investors. Based on their latest emails I think that was probably the right decision for me as it does appear that the continual dividend erosion leading to falling prices On the secondary market continues. Their recent advertising that their secondary market had such large discounts says everything as things are often cheap for a reason. Yet another platform where poor management has taken a good idea and offering down the pan.
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Post by scepticalinvestor on Jul 20, 2020 15:48:27 GMT
has anyone else heard back in recent weeks from the financial ombudsman regarding their complaint? Despite presenting what I thought was a very strong case supported by evidence of value destruction due to the fees, the preliminary response from my investigator is unfortunately that they are not looking to take my case any further at this stage. However I am able to go back to them, so i am curious if other people are in a similar situation and if we can coordinate a good response as most of our complaints will ultimately be similar the investigator has spoken to me on the phone and sent a detailed response. in short, the main points being made are below 1. there was some dispute as to whether the new PP fees impacted secondary market prices (or whether other factors like reduced dividends were also at play). It sounds like PP have now effectively admitted to the ombudsman that the fees were a primary driver of reduced secondary market prices 2. as to whether they were allowed to change the Terms and conditions, there was apparently a variation clauses in the original T&C allowing them to change things (though ombudsman cant comment on fairness, legality of this). I don't actually have at this point the original T&C, not sure if anyone else does? 3. even though PP seem to admit what they did impacted the secondary market their justification on fees is around effectively making the business viable. The ombudsman refers to FCA guidance: “ a variation term may indirectly serve the consumer’s interests in circumstances where other restrictions on the firm mean that the ability to flex rates fairly on existing products enables the firm to continue to exist and the customer to continue to receive the product/service in question”. given heavy capital losses, i'm not sure i fully accept that we would have been worse off if PP had gone bust and the assets simply sold off. Also, why couldn't they have raised money from equity/debt investors rather than destroying client value 4. On being able to exit at zero cost if not happy with the new T&C, my perspective had been that this is surely in principle taking into account everything you had invested pre the fees and what your exit value actually is. Ombudsman however seems to be taking the view that the firm did not impose barriers to exit and differentiating between financial loss experienced (in their view basically "ok") and hard exit barriers like extra fees (which were not introduced). the specific FCA guidance referred to is: " Firms should consider the consumer’s freedom to exit the contract if they do not accept the variation, and how they can actually do so. This should include the financial and practical barriers in the contractual terms which may prevent them from doing so. Examples of barriers could be exit charges or requiring the consumer to give a long period of notice”. Ombudsman effectively saying "you did not have to accept the fees". However i was not able to sell in secondary due to lack of buyers vs what i had invested. On all of the above the one i disagree most strongly on in principle is number 4, as i thought the principle was that you should be able to exit at no financial loss. Maybe there is another part of FCA guidance we can find to support this concept? does anyone know of other historical precedents where firms have introduced unexpected fees like this? Thanks for the update shootingstar . I haven't heard back from the FOS yet, but given that you have had a response, I expect to hear soon. Sorry if I missed something obvious, but what does this mean "they are not looking to take my case any further at this stage" Are they ready to issue a formal decision on your escalated complaint? Also, when you say you are able to go back to them, does that mean that there is still a chance to influence the outcome?
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Post by shootingstar on Jul 20, 2020 22:45:18 GMT
Hi sceptical, well my situation at least is that an investigator has looked into my complaint thus far and written a detailed response to the issues I raised . At the end of it, he says 'For the above reasons, I won't be recommending Property Partner do anything in respect of your complaint.'
However I have a limited time window (ending on 23 July) up to which I can dispute the investigator's findings and ask for my case to be looked at by an ombudsman
I think my best line of argument in terms of response is around the FCA's "treating customers fairly' principles. I have been hunting on the FCA website and documents and also called them up. But if anyone can elaborate further on the regulations I would appreciate it
I think the situation should be that if I had wanted to exit when the new fees were announced (I did want to exit) then I should not have been penalised financially. I think what the company did was unfair. The ombudsman doesn't seem to see it that way so far, arguing effectively it was 'ok' for me to experience a loss (to justify keeping the business going) and there were no unnecessary exit barriers
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Post by scepticalinvestor on Jul 21, 2020 6:04:08 GMT
shootingstarIf you do insist on taking it to the Ombudsman, can the investigator refuse to do so? As per the process on the FOS website if you or the business don’t want to accept what the investigator has said, you can ask for your case to be referred to an ombudsman. It's not clear whether they can refuse or not.
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hazellend
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Post by hazellend on Jul 21, 2020 9:20:50 GMT
Hi sceptical, well my situation at least is that an investigator has looked into my complaint thus far and written a detailed response to the issues I raised . At the end of it, he says 'For the above reasons, I won't be recommending Property Partner do anything in respect of your complaint.' However I have a limited time window (ending on 23 July) up to which I can dispute the investigator's findings and ask for my case to be looked at by an ombudsman I think my best line of argument in terms of response is around the FCA's "treating customers fairly' principles. I have been hunting on the FCA website and documents and also called them up. But if anyone can elaborate further on the regulations I would appreciate it I think the situation should be that if I had wanted to exit when the new fees were announced (I did want to exit) then I should not have been penalised financially. I think what the company did was unfair. The ombudsman doesn't seem to see it that way so far, arguing effectively it was 'ok' for me to experience a loss (to justify keeping the business going) and there were no unnecessary exit barriers It was definitely unfair. Thousands got wiped off the value of my portfolio on a “sell immediately” basis. I decided to firesale everything, and although I took about a 15% haircut, I’m glad I got out when I did. It’s a shame because I loved the concept. I always thought property partner should have become a real estate agent and profited from standard commissions
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squid
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Post by squid on Jul 21, 2020 9:22:39 GMT
shootingstar If you do insist on taking it to the Ombudsman, can the investigator refuse to do so? As per the process on the FOS website if you or the business don’t want to accept what the investigator has said, you can ask for your case to be referred to an ombudsman. It's not clear whether they can refuse or not. I have used the FOS many times over the years. I do not believe that the FOS can refuse to refer to an ombudsman a case where an investigator or adjudicator has issued a decision.
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Post by shootingstar on Jul 21, 2020 17:30:57 GMT
thanks for the responses guys, I would be curious if the investigator who has looked into my complaint also looks into yours
my impression is that i can request a final decision by an ombudsman if a disagree with the investigators initial verdict
In this case whilst i respect the work of the investigator, i do fundamentally disagree with their conclusion. i want to back up my case as much as possible with the grounds on which i disagree. I effectively want to lay out why losing money as a result of the fees was unfair.
i believe the instigation of increased fees resulting in financial loss breaches principle 6 of the FCA's "treating customers fairly", but if there are any contract law specialists or FCA experts on here then i would appreciate any further views
unfortunately i have learnt that there have been some other ombudsman complaints regarding PP that have been dismissed (i believe the number is over 10), so it seems I and everyone else who has complained is fighting an uphill battle
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SteveT
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Post by SteveT on Jul 21, 2020 18:28:24 GMT
I’d push back hard on your point 3):
“ 3. even though PP seem to admit what they did impacted the secondary market their justification on fees is around effectively making the business viable. The ombudsman refers to FCA guidance: “a variation term may indirectly serve the consumer’s interests in circumstances where other restrictions on the firm mean that the ability to flex rates fairly on existing products enables the firm to continue to exist and the customer to continue to receive the product/service in question”. given heavy capital losses, i'm not sure i fully accept that we would have been worse off if PP had gone bust and the assets simply sold off. Also, why couldn't they have raised money from equity/debt investors rather than destroying client value”
WB laboured this point with me on the phone, arguing that without the fees, PP would not be able to continue. But what he principally meant was continue PP’s core (and expensive) head office operation of sourcing new properties, raising new funds from investors, completing purchases, marketing of PP generally, running a secondary market, etc. When I suggested that existing investors would be better served by shutting all that down and simply appointing a competent property management company to manage the existing portfolio of rental properties on behalf of investors, he struggled to answer. He needs the fees to prop up the PP overheads, not to manage the existing property portfolio (costs for doing this were already deducted from SPVs as a reduction to profit).
PS. The FOS have yet to get to my complaint, though it’s a little different to yours.
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starfished
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Post by starfished on Jul 21, 2020 22:40:02 GMT
has anyone else heard back in recent weeks from the financial ombudsman regarding their complaint? Despite presenting what I thought was a very strong case supported by evidence of value destruction due to the fees, the preliminary response from my investigator is unfortunately that they are not looking to take my case any further at this stage. However I am able to go back to them, so i am curious if other people are in a similar situation and if we can coordinate a good response as most of our complaints will ultimately be similar the investigator has spoken to me on the phone and sent a detailed response. in short, the main points being made are below 1. there was some dispute as to whether the new PP fees impacted secondary market prices (or whether other factors like reduced dividends were also at play). It sounds like PP have now effectively admitted to the ombudsman that the fees were a primary driver of reduced secondary market prices 2. as to whether they were allowed to change the Terms and conditions, there was apparently a variation clauses in the original T&C allowing them to change things (though ombudsman cant comment on fairness, legality of this). I don't actually have at this point the original T&C, not sure if anyone else does? 3. even though PP seem to admit what they did impacted the secondary market their justification on fees is around effectively making the business viable. The ombudsman refers to FCA guidance: “ a variation term may indirectly serve the consumer’s interests in circumstances where other restrictions on the firm mean that the ability to flex rates fairly on existing products enables the firm to continue to exist and the customer to continue to receive the product/service in question”. given heavy capital losses, i'm not sure i fully accept that we would have been worse off if PP had gone bust and the assets simply sold off. Also, why couldn't they have raised money from equity/debt investors rather than destroying client value 4. On being able to exit at zero cost if not happy with the new T&C, my perspective had been that this is surely in principle taking into account everything you had invested pre the fees and what your exit value actually is. Ombudsman however seems to be taking the view that the firm did not impose barriers to exit and differentiating between financial loss experienced (in their view basically "ok") and hard exit barriers like extra fees (which were not introduced). the specific FCA guidance referred to is: " Firms should consider the consumer’s freedom to exit the contract if they do not accept the variation, and how they can actually do so. This should include the financial and practical barriers in the contractual terms which may prevent them from doing so. Examples of barriers could be exit charges or requiring the consumer to give a long period of notice”. Ombudsman effectively saying "you did not have to accept the fees". However i was not able to sell in secondary due to lack of buyers vs what i had invested. On all of the above the one i disagree most strongly on in principle is number 4, as i thought the principle was that you should be able to exit at no financial loss. Maybe there is another part of FCA guidance we can find to support this concept? does anyone know of other historical precedents where firms have introduced unexpected fees like this? On 3 - Did the investigator discuss with you at all how their conclusions would have been different if the secondary market did not exist? Would PP have been forced to make exit possible (and charge an appropriate fee)? On 4 - I'd expect it would be difficult to argue for a zero cost exit (while some firms may do that even if their terms & conditions allow variation, it is perceived to be a goodwill gesture rather than an obligation). My understanding firms can typically expect to recover any processing/administration costs to do with implementing the exit (some could argue that approach is more equitable for those staying). A line of argument could be around how PP did not make available an option for exit other than via the secondary market? Therefore, the cost ultimately suffered was disproportionate compared to reasonable administration fees to process an exit? I must admit, my argument around 4 does feel weak as in effect PP would have had to buy those loans directly to make my proposal happen. Not sure they have the permissions to do that? Further, would the customers staying be disadvantaged relative to those going by PP taking such an approach, e.g. it leaves PP weaker? Treating customers fairly applies to equity between different groups of customers as well as individual customers. Those choosing to leave would have be better off potentially if PP had wound up, no doubt (although experience is telling us administration costs can be hefty). I think what could help your cause more is a line of argument that even those who have chosen to stay would have been better off if PP had wound up? PP does not have a right to it viability at the cost of treating all customers fairly. In effect, the approach PP took was to prioritise its own future revenue over the interests of both staying and leaving customers?
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Post by shootingstar on Jul 24, 2020 15:19:41 GMT
Thanks for the contributions folks. I have sent off an email to the investigator before the deadline he imposed so hopefully the investigation will continue rather than my case being dismissed
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daveb4
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Post by daveb4 on Jul 24, 2020 17:10:33 GMT
You can definitely go back asking for a review from the ombudsman BUT you need to force the issues you disagree with AND ideally come up with some new points. Quite a few decisions get upheld but it would set a precedent if yours is upheld and they do not like to do that.
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Post by scepticalinvestor on Aug 26, 2020 15:53:17 GMT
Thanks for the contributions folks. I have sent off an email to the investigator before the deadline he imposed so hopefully the investigation will continue rather than my case being dismissed
I received the same message as you today and responded to the investigator immediately that I did not agree with his conclusion and wanted to take this to the Ombudsman.
For an email that I received this afternoon, the deadline he imposed was 2nd September, a week from now, which I must admit ticked me off, especially considering that I complained in October 2019, almost 11 months ago!
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Post by shootingstar on Sept 10, 2021 16:46:10 GMT
After a (very) long wait, I have finally had my complaint reviewed fully by the Ombudsman and it has not been upheld.
I am not sure if anyone else has heard back? Given that I thought I put forward a compelling case, I am obviously disappointed by the outcome.
The only options as I see them are now to seek legal advice or wait until the 5 year exits - I will await 5 year exits (as that's the easiest option!) unless anyone has any bright suggestions on how strong the legal case might be
In short the case the ombudsman made on my arguments in a 5 page document:
1. a change in T&C was merited/ "fair" - the new AUM fee was needed to avoid PP becoming financially unviable 2. the argument I made that I could not sell in the secondary market without a large loss is not valid - this is the part of the letter I disagree with most. there basically want the liquidity to sell the shares i held as there were virtually zero buyers, even at low price 3. the AUM fee introduction didn't change the risk of the underlying investments in the eyes of the Ombudsman
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