16:47 PM, 30th September 2013, About 11 years ago 30
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Of those, 300 had signed up to the Bank of Ireland Class Action campaign which we started in early March 2013. The remaining 330 have signed up in the last week since the announcement from the West Bromwich Building Society that 6,700 landlords will have their tracker margins increased by 2% on 1st December 2013.
Our campaigns were referenced in The Telegraph on Saturday and The Sunday Times yesterday. We have also been referenced in several blogs and Facebook groups.
I came in this morning to a very full inbox and whilst I have endeavoured to reply to everybody, please excuse the brevity of my responses if you are one of the people who contacted me, I’m sure you will understand.
The complaint letter template has been well received and I’m hoping that West Brom will have a very heavy mailbag this morning and for the foreseeable future.
On Twitter, a hashtag is being used to drive interest, it is #MortgageMugging – I didn’t create the hashtag but it does explain how we many of us feel to let’s all use it. We are asking Twitter users to visit the hashtag regularly and to re-tweet all relevant tweets posted by others.
I had a long telephone conversation with Justin Selig this morning in which I explained that we have gained some momentum but my fear is that we could lose that if people don’t have clear direction and a very good reason to sign up and pay up now.
My biggest question at the moment is this;
What is the “early bird” incentive for people to commit to fund raising?
If all affected borrowers benefit equally, whether they have contributed or not, then human nature will more often than not be to do nothing. I suspect this is what the lenders are relying upon and it is my biggest fear.
Litigation isn’t going to be cheap and it appears I may well have significantly under-estimated costs when I predicted that we will need to raise around £100,000. The cases have similarities but they are not the same, therefore we could be fighting two separate Class Action cases. It is still unclear whether one test case case against each lender is the way to go or whether we should bring one case against each bank to represent all affected members of each Class Action.
The reality is, we need further advice from Counsel, however, bearing in mind that only £10,000 was raised to fund the initial campaign we have made very good progress so far.
We have a barristers opinion on the BoI case and we also know where we stand with the FCA having placed Counsels 32 page report in front of them outlining the legal bases of our grievances. We have not yet had a response from the FOS but I don’t think we should be holding our breath on that one.
During our conversation Justin and I agreed that we should seek further advice from Counsel on what we should do next. As I expected, Justin was a step ahead of me and reported that a QC in the same chambers as our barrister has agreed to provide further opinion free of charge! I have no idea how Justin pulled that one off but we all owe them both a debt of gratitude for that.
Once we have the responses from Counsel Justin will be in a position to seek quotes for legal fees insurance. That will give us a much clearer indication as to how much money we will need to raise.
I have also asked Justin;
Is there a way to ensure that only those who contribute to the fundraising will benefit? If so, could the fund raising be phased to give ‘early birds’ an incentive, e.g. first 300 in pay X, next 300 in pay Y, everybody after that pays Z?
We don’t know how much we need to raise because we don’t yet know what we are going to do next. We need to be clear about this before we recommence fund raising. What we do know is that we need to obtain Counsels opinion on the West Bromwich Building Society case and advice from the barrister on how to proceed, this will cost around £4,000.
Specifically in relation to the West Bromwich case we need to know,
I am also concerned about what happens if we have a further round of fund raising for either case and we don’t raise enough money to take the case through to its final conclusion. What should we do about getting started and/or refunding money paid? It’s a ‘chicken and egg’ scenario because logic suggests that more people will join the fight once it gets started properly and media coverage increases, but to what extent? Do we commence proceedings against Bank of Ireland and/or west Bromwich BS and effectively gamble on more people signing up? If they don’t, and we exhaust all of the funds raised, what then?
Do we use new money raised to put more pressure on the FCA? For example, we could instruct Justin to engage Counsel with a view to writing a response to the FCA expressing our concerns that firstly they are not taking an impartial view of this and secondly, contrary to what they reported earlier in the year to Andrew Tyrie MP, this is not an isolated incident and could potentially cause carnage if other larger lenders follow suit. My opinion is that the FCA’s response is a whitewash. They have simply used the BoI response to our case as a reason not to pursue it. They have not obtained their own independent advice so the FCA is not acting as an independent arbitrator. The BoI response is a note from their barrister who they asked to find ways round our argument. It is not an independent review of the actions of BoI. The FCA has not given us a chance to respond to the BOI arguments. They have simply taken the BoI version and gone with it. My own gut feeling is that we should press this issue and seek support from Andrew Tyrie MP because he clearly thinks the actions of BoI were unfair and is therefore likely to feel the same way about the actions of West Bromwich BS.
The above really is the tip of the iceberg in terms of the many questions and concerns I have at this stage. However, it is important for everybody to know what we are up to behind the scenes.
The bottom line is that we are going to need a lot more support whatever happens. Therefore, I am asking everybody who has registered to date to persuade at least two more people to register for the Class Action in the next week and then get them to do the same. By the time that’s done, Justin should have more answers for us from Counsel and the direction we need to head in should be far more clear to us all.
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Mortgage Mugging
Mark Alexander - Founder of Property118
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Sign Up20:51 PM, 30th September 2013, About 11 years ago
Reply to the comment left by "Sam Collett" at "30/09/2013 - 20:45":
Hi Sam
That's what I'm trying to establish, we are all in the same boat here because there are no obvious comparables. The closest I can find so far is the OFT vs Foxtons case - see >>> http://www.oft.gov.uk/shared_oft/reports/Foxtons/02.04.09_approved_judgment.pdf
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Sign Up21:13 PM, 30th September 2013, About 11 years ago
Reply to the comment left by "Jeremy Smith" at "30/09/2013 - 19:45":
Hi Jeremy, no I looked into using justgiving or something like the charities use & because we aren't classed as a charity (registered with Charities Commission or with HMRC) we can't use them.
Crowdfunding sites work in a similar way for business fundraising, but most use paypal & also charge 5% on top. However I'm speaking to one tomorrow, who I know and may be prepared to do something a bit different due to the potential scale of this & also the likely PR to be generated by it. I'll report back when I know more...
Mark Alexander - Founder of Property118
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Sign Up21:20 PM, 30th September 2013, About 11 years ago
As and when payments are requested they will be direct to Justin's Client Account, either by electronic transfer or cheque.
This will reduce costs and the administrative burden to Property118.
All funds will then be protected by Client Money Protection Insurance to to being lodged in a solicitors client account.
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Sign Up8:30 AM, 1st October 2013, About 11 years ago
One for you to re-tweet
Justin Selig - solicitor
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Sign Up9:40 AM, 1st October 2013, About 11 years ago
Mark
An excellent article which basically says it all.
I have been speaking with various litigation funders today. A couple were not interested but one said it could be done. To cut a long story short the premium would cost half the exposure – so if we think the potential exposure (other side’s costs) would be £200k, then our premium would be £100k. This is only payable if we are successful. If we lose, we pay nothing.
The discussions I have had today, have made one thing clear – there is a lot of politics involved in this. We need to ensure that there is no political pressure which may cause our action to fail as many actions like this in the past which appeared on the face of it to have a completely winnable case did not succeed as the political will was against them. We should try to exert more political pressure. It was clear that Andrew Tyrie was not happy about BOI but the FCA assured him it was only an isolated incident and would not be replicated across the board. This is obviously not true. We could also lobby his opposite number in the Labour Party and the Lib Dems. If we can get cross party consensus on this that this is wrong, then one major hurdle is overcome.
The first step must be however to get counsel’s opinion on West Bromwich. I am happy to split the exposure with you to get this moving.
Mark Alexander - Founder of Property118
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Sign Up9:52 AM, 1st October 2013, About 11 years ago
Reply to the comment left by "Justin Selig" at "01/10/2013 - 09:40":
Hi Justin
I agree to underwrite 50% of the cost of the barristers opinion on the WBBS case subject to the costs being charged back to the Class Action fighting fund once fund raising recommences.
I don't understand your point about litigation funders. What exactly would they be insuring against and why do we only have to pay if we win? Presumably we would sue for the costs of the insurance? Does that effectively mean we have a no win no fee deal on the table or do we still need to raise money to fund our costs? Sorry if my questions are naive but I might as well be the one who asks these questions as opposed to anybody else.
With regards to politics, this does worry me. What have you heard? Could there be any truth in the Conspiracy Theory shared by Anon?
We now have 660 people registered for the Class Action which is quite an army if they all write to their local MP's. Details of how to do that via the following link >>> http://findyourmp.parliament.uk/
One of our readers is also a journalist and is preparing a Press Release which will be posted here. The plan is to encourage all people who have signed up to the Class Action to copy and paste the Press Release and send it to their local media.
Keep up the good work :_
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John T
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Sign Up11:15 AM, 1st October 2013, About 11 years ago
Mark - I totally agree with your suggestion of putting more pressure on the Financial Conduct Authority ('FCA'). Even though buy-to-let mortgages are not regulated financial products, both the Bank of Ireland and WBBS are authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority and therefore subject to their (joint) regulatory supervision.
The overarching strategic objective of the new FCA is to “promote and enhance confidence in the UK financial system”. This objective is being seriously and fundamentally undermined by UK financial institutions changing the basic nature of the products they have marketed and sold to customers. The FCA is also a ‘qualifying body’ under the Unfair Terms in Consumer Contracts Regulations 1999.
Martin Wheatley, the FCA’s Chief Executive promised that the new regulator would be a “very different animal”, and we hear relentless rhetoric about “rigorous enforcement” of a “robust” regulatory regime. There's been little evidence to support such posturing in response to both the Bank of Ireland and now the WBBS.
I also support the proposal to seek support from Andrew Tyrie MP, who is well-informed, well connected and has a high public profile. He is obviously 'on-side' with this issue and would be a very useful and strong ally to engage with. Are there any known avenues/connections we can pursue, in order to engage with Andrew Tyrie?
Gayle Jones
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Sign Up12:13 PM, 1st October 2013, About 11 years ago
I have 5 mortgages with West Brom and 1 with Bank of Ireland.
How do I register?
Mark Alexander - Founder of Property118
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Sign Up12:21 PM, 1st October 2013, About 11 years ago
Reply to the comment left by "Gayle Jones" at "01/10/2013 - 12:13":
Complete the registration form on the following linked page >>> http://www.property118.com/help-us-to-protect-your-tracker-margins/43709/
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Doug Collins
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Sign Up13:15 PM, 1st October 2013, About 11 years ago
I guess like a number of others we received our letter from WBBS at the end of last week, so only really picked up on this as a result of the piece in the Sunday Times Money Section. To say we were quite angry at both the actions of WBBS and their justification for taking the arbitrary and unilateral steps they propose to take would be an understatement.
We are quite happy to support the proposed class action to challenge the legality of the changes WBBS are proposing to make, and did register our details/interest on the site last night. Not sure whether this has gone through. Do you want us to register again?
My wife and I only have 1 BTL mortgage with WBBS, although we have other BTL mortgages with other providers, and so were extremely concerned to read in WBBS's letter and accompanying document that they appear to have undertaken some sort of credit reference check, without any reference to us, to determine that we have 3 or more BTL properties and so seemingly meet their arbitrarily determined criteria for imposing the change. I was even more concerned when reading some of the posted comments that in all probability this would have left some sort of footprint on our respective credit files.
When my wife rang WBBS yesterday about the letter we had received she was, by all accounts, given a scripted response and told that her call would be logged as a complaint and we would hear from them in due course. Notwithstanding that we have used the template letter as the basis for a formal letter of complaint to WBBS, and copied this to the FOS as you suggested.
We will also be following this up with a further letter about the background checks with credit reference agencies the WBBS appears to have undertaken, and whether there has been any detriment/footprint left on our files as a consequence. Has anybody else done this, and are there any issues in particular we need to raise.
Apologies for the length of this posting and if I have repeated things that people have already posted, but haven't read through all the threads yet.
One last point. When and how do we subscribe to the fund to support any class action, because I suspect time will be of an essence hear in what may well become a long and protracted legal battle with WBBS.