Creation Financial Services bashing

[True Blue]

I submitted my FOS complaint yesterday. Have to say, I also have had experienced of the lengths the FOS will go to in terms of allowing a provider to respond. I think they are far too generous in this respect and no doubt, providers are aware of this and will exploit it. Or at least, some will.

[JSS]

Is someone able to provide a quick step by step guide to submitting an FOS complaint?
E.g. what to include, any ‘buzz’ words or phrases, how to submit, etc?

[toddy]

Just had a call from my complaint handler, who is going to call me back to discuss my complaint (I asked for some time to refamiliarise myself with the details)

[Rui N.]

When did you submit?

[toddy]

Rui N. wrote:

When did you submit?

15th Jan

[Rui N.]

Thanks. Just to get a sense how long it took 🙂 at the time Creation was still pretending my complaint didn’t exist.

[toddy]

Rui N. wrote:

Thanks. Just to get a sense how long it took 🙂 at the time Creation was still pretending my complaint didn’t exist.

I’ll let everyone know how the call progresses.

The case handler did comment that there appears to be a lot to discuss… :o)

[Colin MacKinnon]

Now got my final response from Creation. They have refunded the £99 fee, but stand firm on no points or free night. My free night spend was incurred before August last year and the free night was due in late October.

Here it goes:

Thank you for your complaint received on 16 November 2021. I am sorry you have had cause to complain.

My understanding of your complaint is that you are unhappy with the following:
Your annual fee not being refunded
Your free night certificate not being awarded
Being unable to earn further IHG points

I have looked into this by reviewing your account and our records.

I can see that we sent you a letter in September 2021 notifying you that your account will be closing. To confirm, we have closed your IHG Premium Credit Card account on 03 December 2021.

Please note, under clause 14 of your Terms and Conditions we have the right to close any account without disclosing any further details, by giving two months’ notice. Section 8 of the Terms and Conditions for IHG Rewards confirms that services and benefits may be added or removed at any time without notice to cardholders.

I can see that the annual fee was applied on 20 November 2021.

Given its proximity to us sending you notification of the account closure, we have credited the £99 fee to your account and refunded this to your Direct Debit details, this should clear your bank account in 7-10 working days.

Each complaint is investigated and resolved individually on its own merits and I am unable to comment on other complaints.

Points ceased being transferred to IHG after notification of the account closure was issued. Free night certificates will also no longer be issued. We appreciate your may find this disappointing, however as the account was closed on 03 December we will no longer be honouring the associated rewards benefits.

In view of the above, my final decision is that I do not uphold your complaint. I appreciate this may not be the decision you were looking for, however I hope the above helps explain my decision.

Blah, blah blah about FCOS etc.

[Gareth]

Almost to a word the same letter I received.

Colin MacKinnon wrote:

Now got my final response from Creation. They have refunded the £99 fee, but stand firm on no points or free night. My free night spend was incurred before August last year and the free night was due in late October.

Here it goes:

Thank you for your complaint received on 16 November 2021. I am sorry you have had cause to complain.

My understanding of your complaint is that you are unhappy with the following:
Your annual fee not being refunded
Your free night certificate not being awarded
Being unable to earn further IHG points

I have looked into this by reviewing your account and our records.

I can see that we sent you a letter in September 2021 notifying you that your account will be closing. To confirm, we have closed your IHG Premium Credit Card account on 03 December 2021.

Please note, under clause 14 of your Terms and Conditions we have the right to close any account without disclosing any further details, by giving two months’ notice. Section 8 of the Terms and Conditions for IHG Rewards confirms that services and benefits may be added or removed at any time without notice to cardholders.

I can see that the annual fee was applied on 20 November 2021.

Given its proximity to us sending you notification of the account closure, we have credited the £99 fee to your account and refunded this to your Direct Debit details, this should clear your bank account in 7-10 working days.

Each complaint is investigated and resolved individually on its own merits and I am unable to comment on other complaints.

Points ceased being transferred to IHG after notification of the account closure was issued. Free night certificates will also no longer be issued. We appreciate your may find this disappointing, however as the account was closed on 03 December we will no longer be honouring the associated rewards benefits.

In view of the above, my final decision is that I do not uphold your complaint. I appreciate this may not be the decision you were looking for, however I hope the above helps explain my decision.

Blah, blah blah about FCOS etc.

[Jon]

Gareth wrote:

Almost to a word the same letter I received.

Likewise, except that they referred to Section 6, not 8 (typo on your part Colin, or another sign that they’re not really on the ball? 😉 And no annual fee refund for me.

I filed my MCOL a while back, and Creation have indicated they intend to defend the claim in full. I’m looking forward to seeing what their defence argument actually is.

[NorthernLass]

It’ll be interesting if they try to rely on the argument that IHG can withdraw benefits at any time – I’ve got an email from IHG saying it’s nothing to do with them and that it needs to be taken up with Creation!

[Jon]

That has been their entire argument so far – that Section 6 allows them to add and remove services and benefits at any time without notice to cardholders (which is not actually what it says…). I’ll be curious to know what the court would think if they now introduce a different defence, given that they have failed to engage in any sort of constructive dialogue, or provide any meaningful information, as required by the pre-action conduct practice directions…

[Froggee]

Colin – my IHG rewards terms and conditions ends with section 7 so either you have an older version than me (and most of us here) or they are spouting further guff.

[tw33ty]

So just had an interesting phone call from FOS person who was dealing with my complaint.

They found in my favour a couple of weeks ago and submitted their decision to creation, they’ve not heard back from creation, surprisingly.

The call this morning wasn’t so much about my account being closed, but more about curve.

I told them right from the start I used the black card with curve linked, but done zero Ms with it and provided all my statements to show it was for quality of life usage, carrying one card etc, and they had no issue with this.

They asked today, in depth, and quite insistently, where I discovered about curve, time first started to use curve, why did I start to use curve, and things like was it promoted to me and how, also how much did I pay for it and why I was on metal vs free.

Not sure if anyone else has had a call like this from them, but seems to be dragging on.

[jj]

We have all received very similar letters, so Creation is clearly responding from the position of a fixed policy decision. I don’t understand what it is doing though. It is possible that Creation really believes its policy is a fair reflection of its rights; if so, it is dangerously ignorant of the regulatory environment n which it operates. It is also possible that Creation is bluffing; if so, it underestimates the threat of fines for deliberately misleading consumers who complain. It is also possible that the letters are a smokescreen for the real arguments which will be brought out later in the procees; if a very dangerous game is being played out, as that would be a fundamental breach of its duty to communicate clearly with consumers.

[JDB]

Jon wrote:

That has been their entire argument so far – that Section 6 allows them to add and remove services and benefits at any time without notice to cardholders (which is not actually what it says…). I’ll be curious to know what the court would think if they now introduce a different defence, given that they have failed to engage in any sort of constructive dialogue, or provide any meaningful information, as required by the pre-action conduct practice directions…

The Para 6 argument is probably a red herring, albeit not something to be discarded entirely. The defence will be prepared by legal people who will have new/different arguments which won’t count against them. Did you send a LBA (per the protocol), as I would have expected that to elicit a more specific defence? In terms of the PAP, that suggests you should (but are not obliged to) go to the FOS first, so that argument will cut both ways and in order to protect yourself, you should prepare reasons to justify going to MCOL first.

[jj]

Regarding Creation’s rights, I don’t want to do everyone’s homework in case we all make the smae mistake, but I would like to draw everyone’s attention to the FCA’s Finalised Guidance paper FG18/7. The FCA uses twelve questions to assess whether a unilateral variation clause in a contract is fair, and FG18/7 provides considerable colour on how the questions will be answered.

Here are the questions. I will let you make up your own minds as to where you think Creation’s position lies when it says, “services and benefits may be added or removed at any time without notice to cardholders”:

1 Has the firm included the variation term to achieve a legitimate purpose?

2 Are the reasons no wider than is reasonably necessary to achieve a legitimate purpose?

3 Is the extent of the change permitted by the variation term no wider than is reasonably necessary to achieve a legitimate purpose?

4 Are the reasons objective?

5 Would it be possible for the firm to demonstrate whether or not the reasons have arisen (in other words, whether or not the firm is entitled to vary the contract when it invokes the variation term)?

6 Does the variation term allow for:
(a) variations in favour of the consumer where the reasons may in some circumstances justify changes in favour of the firm but in other circumstances justify changes in favour of the consumer (e.g. price decreases as well as increases), or
(b) variations in only the consumer’s favour?

7 Are the reasons clearly expressed?

8 Will the average consumer understand, at the time the contract is concluded, the consequences that a change to the terms might have for them in the future? In particular, for a variation term that entitles the firm to vary the price:

(a) if practicable, does the contract (or other information provided to the consumer before the contract is concluded) explain in general terms the method for determining the new price (in other words how the new price will be determined), and
(b) will the average consumer understand the economic
consequences for them of the variation term?

9 What, if any, notice of any variation does the contract require the firm to give the consumer?

10 Does the contract give the consumer the right to terminate the contract before or shortly after any variation takes effect?

11 Judged at the time when the contract is concluded, is it likely that the consumer would be able to exercise the right in practice?

12 Does the term strike a fair balance overall between the legitimate interests of the firm and the legitimate interests of the consumer?

[JDB]

@jj is variation actually the pertinent issue here?

[Jon]

JDB wrote:

Did you send a LBA (per the protocol), as I would have expected that to elicit a more specific defence? In terms of the PAP, that suggests you should (but are not obliged to) go to the FOS first, so that argument will cut both ways and in order to protect yourself, you should prepare reasons to justify going to MCOL first.

I did indeed. I sent an LBA in which I outlined my case and also proposed a settlement; their response was essentially “We’re not going to change our decision or provide any further information”. I then sent a follow-up, giving a lot more details of my claim, drawing their attention to the pre-action protocols, and requesting they provide an explanation for their actions and, per the PAP, details of any aspects of my claim they disputed (and again offering to discuss settlement). I received only an acknowledgement of receipt in return.

The PAP requires the parties to *consider* Alternative Dispute Resolution. I have considered it, but I have reasons for not going via the FOS first, which I have explained both in my correspondence with Creation and in my claim particulars. I feel fairly comfortable on that front. On the other hand, Creation has done literally nothing to engage with me and seek a resolution.

[Jon]

JDB wrote:

@jj is variation actually the pertinent issue here?

Possibly not – perhaps depending on how we define ‘variation’… 😉 There have been no (notified, at least) changes to the T&Cs, and the benefits in question appear still to be available to those cardholders who did not have their accounts closed. So Creation has removed benefits without notice, retrospectively, after they were earned, and selectively, from only some customers but not all, and with no explanation or justification given.

[jj]

@jdb it’s pertinent to Creation’s reliance on Section 6, as that section is a variation clause and the FCA would expect it to be fair according to its finalised guidance. FCA guidance is directly relevant to FOS findings, but I don’t know what, if any, reliance would be laced on it by the courts.

[JDB]

@Jon in practice the PAP is more of a ‘comply or explain’ regime but you have clearly done more than enough to de-risk your claim. At MCOL you will have the huge benefit of seeing the defence before any hearing which you don’t get at any stage via FOS. Also, once a lawyer is forced to draft a defence it focusses the mind as to whether they are wise to proceed or cave.

[Jon]

jj wrote:

@jdb it’s pertinent to Creation’s reliance on Section 6, as that section is a variation clause and the FCA would expect it to be fair according to its finalised guidance. FCA guidance is directly relevant to FOS findings, but I don’t know what, if any, reliance would be laced on it by the courts.

The thing about Section 6 is that, firstly, when read as a whole, it is obviously (and I submit that any reasonable person would read it this way) about the IHG Rewards Club, and not about the credit card per se. Secondly, the sentence in question actually reads “Terms and conditions of the IHG Rewards Club may be modified without notice to Cardholders, and services and benefits may be added or removed at any time.” – note where the bit about notice appears, but that aside, it is clearly referring to IHG adding or removing Rewards Club services and benefits, not Creation adding or removing card benefits.

I have to assume Creation has a better argument up its sleeve, but in that case they really should have disclosed it, per the pre-action protocols. They had plenty of opportunity to do so before I filed MCOL – I have been more than generous with the time I have given them, I feel.

[Rui N.]

Jon wrote:

it is clearly referring to IHG adding or removing Rewards Club services and benefits

Not only that, but if anything was unclear to anyone about what Section 6 refers to, Section 6 includes a link to the IHG Rewards website.

[JDB]

jj wrote:

@jdb it’s pertinent to Creation’s reliance on Section 6, as that section is a variation clause and the FCA would expect it to be fair according to its finalised guidance. FCA guidance is directly relevant to FOS findings, but I don’t know what, if any, reliance would be laced on it by the courts.

I don’t think their ultimate defence will be so reliant on 6. Any guidance you have re the status of accounts during the 60 day notice period would be helpful. Creation is not the only firm to treat people differently in this twilight zone, so something somewhere (beyond T&Cs) is giving them the comfort to do this, but I don’t know what it is.

Also, not all the affected people are in the same boat – those whose anniversaries fell after 3 Dec who are complaining about not receiving the voucher are in a completely different position/need different arguments. The variation argument doesn’t apply to them at all.