Erudio Student Loans Continued part 3

[erudioed]

I dont know if this is the right way to do it and i apologise if it isn't but this is the continuation of www.mumsnet.com/Talk/legal_money_matters/a2057131-Erudio-Student-Loans-Continued

Mindreader.

DAF = Deferment application form

FPN = Fair Processing notice

I'm back! I received confirmation that my loans were deferred back in august but now I have received a letter from them saying that my account is in arrears and demanding payment of 200 odd pounds. What do I do? They've already told me my loan was deferred and anyway they have direct debit details for me! Another formal complaint? This feels like harassment.

MsBug
Harassment is a course of conduct (ie two or more incdients). So I would advise Erudio in blunt language that you have been given a deferment (refer to the confirmation letter etc) and warn them that any further letters saying your account is in arrears will be construed as harassment.

Anthony Reeves

Thank you Anthony , I will add that to my letter

[Of background interest from today's FT:

"Private group to help exchequer chase £20bn debts
Sarah Neville, Public Policy Editor

Whitehall
Ministers have struck a deal with a private US-owned company in an attempt to collect more than £20bn in debt owed to the exchequer for unpaid taxes and student loans as well as overpaid benefits and grants.
The government is creating a joint venture with TDX Group, a leading “recovery management” company whose parent company, Equifax, is based in the US. TDX will have a 75 per cent stake in the new entity, Integrated Debt Services Limited, with the government holding the remainder.

The new company will receive a proportion of any unpaid debts collected beyond the figure secured in 2013-14. The Cabinet Office would not reveal the percentage to be paid, citing commercial confidentiality.
The move to establish the joint venture is the latest sign of how a smaller and leaner Whitehall is adopting different ways of working in the hunt for big efficiency savings. In the Autumn Statement last month, George Osborne, the chancellor, set a target of an additional £10bn in economies to be achieved by 2017-18.
Initial clients will include HM Revenue & Customs, the Department for Work and Pensions and the Student Loans Company. The aim is to widen it by bringing in other areas of the public sector, including local government.
The backdrop to the initiative is the government’s less-than-sparkling rec­ord in collecting what is owed to it from many sources. These include unpaid fees, taxes, fines and loans, overpaid benefits or grants, and unrecovered costs from court cases.
Earlier this year the Commons public accounts committee criticised the government’s failure to establish a “cross-government approach” to managing debt and securing more money for the exchequer, despite the direct impact it had on government borrowing.
This inaction had led to large volumes of old debts building up in departments that were unlikely to be collected, it said. The Cabinet Office said that working with TDX would allow the government “to access best-value private sector knowledge and expertise” on how to collect it. The other clients already signed up to the new venture are the Home Office, the Legal Aid Agency and the Driver and Vehicle Licensing Agency.
TDX Group, a supplier of debt collection systems based in Nottingham, was founded in 2004 by Mark Onyett, a former executive of credit card issuer Capital One. The group helps large businesses, including some of Britain’s biggest banks, manage their debt collection. It was bought by US-based Equifax, a credit referencing agency, at the start of this year in a £200m deal.
Mark Sanders, managing director of TDX Group, said it used data and analytics to understand what individuals in debt were able to pay. It then applied “the most appropriate and effective strategies using the best suppliers from the private sector”.
TDX’s software analyses customer data to categorise loans in order to identify the most suitable company to collect them at the best price. Its Plato platform, for example, provides businesses with an outsourcing arrangement that takes over the management of their debt portfolios, giving tranches to a range of collection agencies.
The business has grown substantially over the past decade, along with the expansion of consumer credit. TDX is estimated to have handled up to 50 per cent of total debt sales in the UK at one point, although that has dropped significantly over the past few years.
A recent report found that TDX might have inflated debt sale prices while lowering barriers to entry, allowing smaller companies to buy segments of loan portfolios."

FOS finding against Erudio in a few more cases it seems.

forums.moneysavingexpert.com/showthread.php?t=4923210&page=140

And another

forums.moneysavingexpert.com/showpost.php?p=67425960&postcount=2820

Hello all - I have been away for ages! Anyway, the ombudsman (adjudicator) got back to me and said that they were in favour of erudio. They did not summarise any of the specific points that I made and it seemed like a general erudio letter had been cut and pasted together. I am holding out and taking it to the ombudsman. My husband, who is in law (fortunately for us) is drafting my response. I have also had letters from erudio stating that i am having charges refunded for issues (no clarification as to what issues) and that I will be charged for arrears from Feb 15 even though the balance sheet they send said I had none? I don't think the have a clue what is going on with my account. Anyone else had a response from the ombudsman yet? Also I am more than happy to join the group action Anthony, if you will have me. My husband and I were thinking of court action anyway.

Here is an article on thisismoney.co.uk about our beloved Erudio Student Loans: www.thisismoney.co.uk/money/experts/article-2904618/TONY-HETHERINGTON-Student-loan-demands-pile-15-years-tenants-moved-out.html

One rather notable section reads:
"Erudio is a commercial business that took over from the old Student Loans Company, and the takeover has not been without hiccups. The company is strange.

One director is another limited company that acts as an officer of a remarkable 1,349 businesses. The only human director is Mark Filer, who is an officer of 450 companies.

This may explain why he has not had time to file accounts due last September. This is an offence, and a couple of days from now Companies House will issue an official proposal to strike off Erudio.

What would happen to outstanding student loans then is not clear, but the company’s credit licence from the Financial Conduct Authority would certainly disappear.
I asked Filer to comment. He did not respond, but a spokesman admitted Erudio’s accounts were outstanding."

waitingforgoddot
Please get in touch and we can have a chat.

Anthony Reeves

I've spoken to the FOS recently. Only taken since July .

I haven't had the letter yet, but the gist of the conversation was that as my loan is pre 1998, the objection I raised about signing the DAF allowing Erudio to contact CRA wasn't in breach of the original T&C as the SLC could have done this but decided not to.

I explained my concerns about the inability to record a deferment, only a payment holiday and the impact this would have on my credit record (I had put this in my complaint to the FOS already). The FOS said that this wouldn't affect my credit rating as "people have payment holidays all the time on their loans as a special offer" , oh that's ok then.

I have left it with them but I suspect I will get a letter in the next week stating that they have sided with Erudio and that I must sign the DAF in order to defer.

I don't want a payment holiday on my credit file, simply because this is not what it is. I just want to defer my loan. I am entitled to and have provided proof of income.

I really don't know what to do now, I've been fighting this since March and am tempted just to sign their bloody form. What other choice do I have?

Any advice what I can do now?

I have also compared my SLC annual statements with the ones Erudio sent me. None of the figures match...anyone else had this? Sorry if you have and I am late to the party, Erudio say I owe nearly 4k where as my previous ones I owe just over 3k - big difference.

Thanks Anthony - I will try and reach you tomorrow.

Mrs Chicken. Ask Anthony Reeves, i think Erudio have already caved in on that one and deferred some without using a DAF.

waiting not sure what your arrears are for, but if it's for non payment whilst your complaint was with FOS, I don't think they can do this.

FCA guidelines state that if an account is in dispute then no attempt for repayment can be made. I can't remember the actual section but I think it's on this thread/earlier one.

I think I'm at the same stage as you but not sure what to do now.

@NoMoreHappyMrsChicken

Interesting that the FOS took that view. AND Erudio have not added anyone's Loans to CRA's as yet, I feel its an empty threat to get us to pay up when we are not legally obliged too. It opens up a miss selling argument about the original loan terms - IE that they would NEVER impact upon a students future financial health (even todays student loan literature promises this!)

If you have supplied proof of income then Erudio HAVE to defer you whether you used their DAF or not, that's what the original loans terms stipulate. I think Anthony Reeves has got this position enforced upon Erudio for another poster on MSE? Is that correct Anthony, can you confirm this?

fshandbook.info/FS/html/FCA/CONC/7/14

CONC 7.14.1
01/04/2014
FCA
(1) A firm must suspend any steps it takes or its agent takes in the recovery of a debt from a customer where the customer disputes the debt on valid grounds or what may be valid grounds.

CONC 7.14.2
01/04/2014
FCA
Valid grounds for disputing a debt include that:
(1) the individual being pursued for the debt is not the true borrower or hirer under the agreement in question; or
(2) the debt does not exist; or
(3) the amount of the debt being pursued is incorrect.

CONC 7.14.3
01/04/2014
FCA
Where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner.

Can I just say ARRRRGGGGGGGG really loudly?

Right, now I have that off my chest, I can share the "conclusions" of the Ombudsman with you.

Putting aside the fact that they have only looked at one part of my complaint and indeed not looked at the specific complaint I made, namely Erudio's failure to consider my deferment, instead choosing to make my complaint about "Erudio changing the information requested on the DAF"; that the information in their findings is incorrect (presumably given to them by Erudio) and they have been very selective with the information they have read from me. Anyway, this is what they say (can you tell how impressed I am by this after waiting 6 months?):

"When you agreed to the terms and conditions of the loans, you have agreed that information may be disclosed to other parties. Erudio have confirmed that in some instances it is necessary for further checks to be carried out to satisfy that income is under the deferment threshold and they may contact other parties to verify this. Whilst I appreciate that you feel this is not something this is not something that SLC undertook when considering a deferment and is therefore something that Erudio are now doing additionally, I would advise that this option was available to SLC although it appears that they did not facilitate this optiion."

So pretty much the stock answer. In response to my concerns about a payment holiday being recorded and this having a negative impact on my credit rating, this is the response:

"..the loans will be reported without a status code and this is considered neither positively or negatively by lenders." Does anyone know if this is true?

In the meantime, I'm going to go back to FOS and let them know they haven't actually answered my complaints

No it's not true. A payment holiday on your report will be seen by lenders as a negative factor, a sign that you are struggling, have very limited or no spare funds compared to your income, and so on....

Complain to the ombudsman that they haven't dealt with all of your complaint, and have mismanaged and mishandled the aspects they have dealt with.

I have managed to get Erudio to grant a deferment without having the DAF completed. They said, "We have not conceded that there is no requirement to complete the DAF." However, in that particular case, they were prepared to grant a deferment without a DAF.
Well, after I got involved and got very close to issuing legal proceedings this was the result that was achieved.
The Ombudsman is missing the point because the information and the checks they say they want to do will not confirm anything about the accuracy of the income information provided by borrowers.

Anthony Reeves

Today, I have sent papers to court for a claim to be issued against Erudio and that will hopefully provide the opportunity for a court to determine the issue of whether there is an unfair relationship and to address the issues around the deferment process.

This is the way to resolve the matters borrowers have with Erudio.

Anthony Reeves
Lawyer

Can the loan be reported "without a status code" or is this nonsense? Will it really be a payment holiday?

Anthony, I'll PM you if that's ok!

As far as im aware, they havent reported anyones loan as a payment holiday or any sch thing. Thus far, it seems to be the threat they most expect to get people paying. As mandakl states, no matter what term is used, not repaying a loan wont be seen as a positive. That our loans are different to most, especially as it was from the government and something non of us ever conceived would end up being sold on (let alone to the private sector), threatening debt collector psychological propaganda is probably all it is (we will see...but i dont think erudio would like the follow up complaints/actions to anybody and everybody that would follow from many many ex-students. It would all but publicly announce their bad reputation to the wider world, alongside creating other negative consequences for both them and us).

(This is a copy of the post I put on Money Saving Expert).

Data Protection and passing data to Credit Reference Agencies.

-----

The issue seems to be whether clause 16 gives the right to pass data to CRA’s. The pre 1998 agreement was before the Data Protection Act 1998 came into force. The DPA came into effect in 2000. Certain data continued to be exempt from full compliance until 24 October 2007. The exemption given to eligible data covered the first data protection principle.

However, the exemptions in the the transitional provisions have now ended and all data being processed must comply with the principles contained in the 1998 Act.

The first data protection principle says:

“Personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless—

(a) at least one of the conditions in Schedule 2 is met, and

(b) in the case of sensitive personal data, at least one of the conditions in Schedule 3 is also met.”

The conditions in Schedule 2 are

1.The data subject has given his consent to the processing.

1. The processing is necessary—

(a)for the performance of a contract to which the data subject is a party, or

(b)for the taking of steps at the request of the data subject with a view to entering into a contract.

1. The processing is necessary for compliance with any legal obligation to which the data controller is subject, other than an obligation imposed by contract.

4.The processing is necessary in order to protect the vital interests of the data subject.

5.The processing is necessary—

(a)for the administration of justice,

6(1) The processing is necessary for the purposes of legitimate interests pursued by the data controller or by the third party or parties to whom the data are disclosed, except where the processing is unwarranted in any particular case by reason of prejudice to the rights and freedoms or legitimate interests of the data subject.

(2) The Secretary of State may by order specify particular circumstances in which this condition is, or is not, to be taken to be satisfied.

So are any of the conditions in Schedule 2 met? In my opinion they are not.

The one which is banded about is that Clause 16 gave consent. However, what does consent mean? The place to start is the Directive which the 1998 Act implemented. The Directive is, “DIRECTIVE 95/46/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 24 October 1995", on the protection of individuals with regard to the processing of personal data and on the free movement of such data. If you look at the definitions in Article 2, it states, “(h) “the data subject's consent” shall mean any freely given specific and informed indication of his wishes by which the data subject signifies his agreement to personal data relating to him being processed.”

I have underline the words “specific” and “informed” as I think this is the key.

The wording of Clause 16 says:

“The Loans Act prohibits us from disclosing information about you to anyone else for use for soliciting custom for goods or services. The Data Protection Act 1984 also contains protections in relation to the disclosure of automatically processed information about you. Subject to these prohibitions and protections, and and any other relevant statutory provisions, we may however, if we judge appropriate, disclose to any person any information concerning or relating to this agreement.”

I submit that the last sentence emphasized in bold is hardly “specific” and as it does not indicate to whom the data may be given, it is hardly “informed” consent. The fact that the Post 1998 agreement at clause 12 states when confidential information may be passed, in my view acknowledges the requirements of the 1998 Act to be more specific.

So, I have argued that it would not satisfy condition 1. What about the other conditions? I don’t think they can argue that it is necessary for data to be passed to CRA’s to perform the contract (ie consider a deferment) because a credit file will not provided income information. The third condition is not fulfilled, ie there is no legal obligation to pass data to CRA’s. As to Condition 4, I fail to see what “vital interests” require the passing of information to CRA’s. Condition 6(1) would not apply because it would prejudice the rights and freedoms or legitimate interests of the data subject (the borrower).

So in summary, in my opinion I would argue that the passing of data to CRA’s would not be a fair and lawful processing of data because non of the conditions in Schedule 2 are met.
I am not an expert in the field of data protection law, but this is the conclusion I have come to from looking at the legislation.

Anthony Reeves