Creation Financial Services bashing

[Lady London]

“… subject to detailed discussion with the firm concerned”.

That’s interesting, but just how much time more beyond anything reasonable to respond, is the FOS going to keep on giving Creation?

One would almost think tbe purpose of the FOS is to protect miscreants amongst finance industry providers, rather than to ensure consumers of finance industry products are treated correctly.

[Blair Waldorf Salad]

Lady London wrote:

“… subject to detailed discussion with the firm concerned”.

That’s interesting, but just how much time more beyond anything reasonable to respond, is the FOS going to keep on giving Creation?

One would almost think tbe purpose of the FOS is to protect miscreants amongst finance industry providers, rather than to ensure consumers of finance industry products are treated correctly.

I think it’s code for FOS had leadership team vacancies and no one wants to make a decision on Creation till those new hires have a grasp of the place.

[Supergers49]

The FOS has gone native, and clearly isn’t fit for purpose. Time to disband it and start again.

[NorthernLass]

Well I got my first snippet of info from the FOS today, 10 months on –

“We are currently speaking to Creation and clarifying some questions regarding the rewards scheme that was attached to your Creation card as this was provided by a third party company – IHG. We need to have a full understanding of this scheme before we proceed further.”

[Colin MacKinnon]

While I often agree with JDB, I would say that the FOS should – like any business – keep its “customers” up to date.

After all, many government departments and council offices give you just 14 or 28 days to challge a decision, penalty notice etc.

So when you hear nothing from the FOS it is perfectly reasonable to fear there has been an email or postal communication that might have gone astray.

Ps. My BA Amex card that I applied for in November went astray in the post for four weeks, and the replacement ordered after 3.5 weeks arrived two weeks later, while we are away for a month – and by applying in November I have missed out on the 70k offer!! Aaargh!

[Lady London]

NorthernLass wrote:

Well I got my first snippet of info from the FOS today, 10 months on –

“We are currently speaking to Creation and clarifying some questions regarding the rewards scheme that was attached to your Creation card as this was provided by a third party company – IHG. We need to have a full understanding of this scheme before we proceed further.”

This is really rather worrying from the FOS

After 10 months they say they want to understand a third party scheme that acfually has nothing to do with the only obligations Creation accepted towards their customers.

Creation would be the first to say they are not responsible if IHG changes the rates applying to what IHG points will buy, or restricts them etc. Creation’s not responsible for your own conversion of IHG points once you have them. But Creation *is* still responsible for providing the points to their customer, as promised in the card agreement and this is whst they failed to do.

So I do not see why after 10 months, and considerably longer after earlier complaints about Creation were submitted to them, the FOS ‘needs to have a full understanding of the IHG scheme’.

This tells me that the FOS has fallen into tbe trap of following Creation’s diversionary tactic, of attempting to say that because IHG can make changes to how points nay be spent, which is a matter berween the IHG scheme member and IHG, then this means a finance company can make changes to how IHG points are earned, changes made unilaterally which flout a contract they already signed with their cardholder specifying that in exchange for specific performance by the cardholder, namely: spending, Creation will deliver IHG points pro rata to spend amount, to the cardholder aa laid down in the card agreemwnt. What the cardholder then does with the points, is up to the customer.But the points earned while the contract/card agreement is running, including within any notice period, must be delivered to the cardholder.

If this is the level of competence of the FOS then it’s time to MCOL. At this rate cases will be heard and judged while the FOS is still being led up the garden path by Creation.

And Creation only settled the case reported earlier above because they thought they might lose, as well.

[NorthernLass]

Hi @LL – I am hoping that the FOS are trying to get a picture of the value of the points and free nights as they translate into redemptions via IHG in the event that they would request a monetary settlement from Creation in lieu of points and certificates, but you may be right!

[Lady London]

NorthernLass wrote:

Hi @LL – I am hoping that the FOS are trying to get a picture of the value of the points and free nights as they translate into redemptions via IHG in the event that they would request a monetary settlement from Creation in lieu of points and certificates, but you may be right!

Yes I would have hoped there would be a reason of the sort.

But remember that even if many cardmembers sign the same agreement, each person’s contract is individual. So the loss to the cardholder is also individual. But the minimum loss is the points earned by the card holder pro rata to his own individual spend. The rest sadly requires careful selection of legal arguments.

Selecting the argument to say that Creation is responsible for a loss that you can easily prove, no matter how solidly you can prove this is the value of your own loss due to Creation’s arbitrary decision not to perform their side of your contract with them, is stickier.

As @JDB has pointed out, claims for anything beyond receiving the actual points may fall into areas like consequential loss and loss of chance legally, so have to be argued with knowledge that seems beyond an ordinary customer, hence the stickiness in choosing bases for arguments in contract law and/or statutes to try to be compensated for what Creation’s broken promise and poor operational execution has meant to you.

However if the FOS does its job properly on the issue of has Creation treated its consumer customers fairly, then I have good hopes that Creation will be told what they have to do procedurally.

I am just not sure how far the FOS can go to requiring a fair level of compensation for individual well-founded cases.

I’ll also admit I’m a bit prejudiced as I see in Creation’s treatment of customers, behaviour that often seems to be found in France (they are part of BNP), where particularly ex-nationalised industries such as telecom, and particularly banks, seem to have very poor standards of service and to believe they can get away with mistreating customers regardless of fairness and the law.

[craigmmorq4]

I opened my complaint with the FOS on 07/12/2021, and still dont have an outcome!
Creation closed my account. I hit the 10k spend and was owed a few thousand points………

[NorthernLass]

@LL, I’ve only asked for the points earned plus my free night certificate but I’ve also stated what I consider to be the monetary value of these as I seem to recall someone posting some time ago that the FOS can only make monetary determination? I’ve not asked for compensation on top of that, just what I consider that Creation should have awarded me as part of the agreement prior to closing the account.

[HughM]

I share the general mood of impatience and today tried to book a free night with the Creation Premium voucher I have not got. It led to this:
“Available: 0

Used: 0

IHG Rewards Club Premium Credit Card Anniversary Nights are redeemable at over 5,200 InterContinental Hotels Group properties. If you spend £10,000 or more on purchases during the year (not including refunds, reversals, or charge backs) by the anniversary of the date your IHG Rewards Club Premium Credit Card was issued, you will receive an Anniversary Night Voucher. You will only be eligible to receive one voucher per year. The Anniversary Night is valid at hotels in the IHG® Rewards Family of Brands (excluding Army Hotels, InterContinental Alliance Resorts, Regent Hotels, Six Senses and Mr & Mrs Smith) and must be redeemed within 12 months from date of issue.”

I hope FOS explore the options and read ALL the small print. If they do, I’m still hopeful of a free night in 2024.

[Harrier25]

Let’s hope so, but I wouldn’t be suprised if they say, as there is a 3rd party involved (IHG) it isn’t covered within their jurisdiction and are powerless to rule. Complete nonsense I know, but so are the FOS.

[Jon]

Apologies for diverting away from FOS and back to MCOL, but just to report that Creation has now paid my settlement – two days after the deadline passed 🙄🤦‍♂️😂

Which reminds me, I’ve been meaning to finish writing up my account of the hearing. Will post it as soon as I can.

[Rui N.]

Sue them for interest.

[Aston100]

Jon wrote:

just to report that Creation has now paid my settlement – two days after the deadline passed

What a bunch of cowboys.

[windypops]

I have been dipping in and out of this thread for amusement for a while. I can’t believe that people are so eaten up and tense about a free hotel night or two. It’s not like you have lost any money is it. Surely you would have spent the money used anyway ? So a retailer reneged on a condition. You lost no physical money have you ?

Move on and look forward guys and girls and put it down to experience. Sometimes in life there is no such thing as a free lunch so don’t expect one .

[Rui N.]

To come up with that observation you could have stayed out of this thread.

[LostAntipod]

windypops wrote:

I have been dipping in and out of this thread for amusement for a while. I can’t believe that people are so eaten up and tense about a free hotel night or two. It’s not like you have lost any money is it. Surely you would have spent the money used anyway ? So a retailer reneged on a condition. You lost no physical money have you ?

Move on and look forward guys and girls and put it down to experience. Sometimes in life there is no such thing as a free lunch so don’t expect one .

If we cant rely on contracts and rule of law, and having your day in court, what are we left with ? Its OK to be wrong, its not OK to be forbidden to ask.
And at what value of the perceived loss is it deemed enough to warrant a challenge?

[Jon]

In case this is of use or interest to anyone, here’s my write-up of my hearing.

It was long – we used the full two hours and then some.

I represented myself, Creation appointed counsel.

Very interesting experience, amicable/cordial, the judge was fair I think, albeit perhaps not as sympathetic to a litigant in person as maybe he could have been. But it was also exhausting, and frustrating at times – mainly because we almost seemed to be arguing two different cases.

The judge began by noting (I sensed with some annoyance) that the combined trial bundle collated by the defendant’s solicitor was 193 pages long and included a lot of repetition. That was largely because of my parts – because my original particulars of claim had to be resubmitted as a further statement of case early on due to a technicality (lesson learned: even if all your correspondence is by email and even if they acknowledge receipt of your doc, it’s not officially served unless you get formal permission to serve by email); then the court requested evidence bundles and witness statements, which for me, having already said everything I felt I needed to in the particulars (it was a little confusing as to why the court wanted more documentation) was essentially the same doc split out into narrative as witness statement and appendices as evidence bundle. But all were included in the trial bundle.

The judge announced that he hadn’t had time to go through all of it, but felt he had the gist having read some of it over lunch.

He then asked whether any attempts at settlement had been made. I said I’d been trying to settle for 12 months, counsel just said “yes”… I was going to say more, but the judge stopped me, presumably for reasons of ‘without prejudice’ etc. The judge then invited us to take ten minutes to discuss (while he left the meeting) to see if we couldn’t settle “before one of us crashed in flames”.

(For what it’s worth, now that the case is finished – I had said in pretty much every piece of correspondence that I was open to discussing settlement, and I had made a formal settlement offer back in October, with a two-week response time before I paid the hearing fee, all of which was ignored; Creation (via their solicitor) then made a (low) offer at 4:30pm on the Thursday before the hearing (the hearing being the following Tuesday), giving me until mid-day on the Friday to respond). They made a revised offer on the Friday, which I again felt was too low – and more to the point, they hadn’t given me any reason why I should settle, such as an explanation of why they thought they were entitled to withhold the points etc).

We were unable to reach agreement at that point so the hearing proceeded. The judge gave me 20 minutes to present my case, then 20 minutes for counsel to present his, plus 10 minutes to cross-examine me, then 10 minutes for me to make my final submissions. It did feel a little rushed and in hindsight, if I’m being really self-critical, I think I could have presented better (I got slightly put off my stride for various reasons), but nonetheless, over the full hearing, I think I got all of my points across, and the judge did say at the end that we’d both presented our cases eloquently.

My argument focussed on breach of contract – Creation was entitled to close my account and gave the required notice, but was not entitled to withhold contractually agreed benefits earned before and during the notice period, especially as they’d given no notification or notice of variation etc. I pointed to various clauses in the Consumer Rights Act to support that. My claim was for the value, derived from the cost of replacing, the benefits withheld. I submitted that defence had not identified anything in the agreement that permitted Creation to withhold the usual / customary / expected / agreed benefits without notification or notice, but that if such a term were found to exist, it would be an unfair contract term per CRA.

Counsel’s argument focussed on points having no value and not being property, and me not having any ownership interest in them (all per Section 24 of IHG’s terms) and therefore I had no entitlement to them and could not claim monetary damages. The claim has no basis in law therefore should be dismissed. Apparently in law there’s no basis for a claim where there was no pecuniary loss – I’m not sufficiently knowledgable about the law to comment on that (seems to me there’s a massive grey area / gaping hole if that’s the case), but the judge made a point of saying (not sure whether for my info or directed at counsel as a warning) that counsel must not mislead the court, so I assume counsel wouldn’t have made that claim if it was unfounded.

Counsel’s other line of argument was that I knew the deal when I signed up, I knew that Creation could terminate at any time without notice, I knew that points have no value etc, I knew that IHG could change the terms at any time (notwithstanding my argument that IHG’s terms govern its operation of its IHG Rewards Club and do not give Creation powers re its operation of its credit card), and therefore I had no basis to claim damages for loss of points etc.

I don’t think any of that really answers the point about breach of contract, and I still don’t know why Creation thought it was entitled to withhold benefits.

Along the way, various arguments and points were made:

– The annual fee is exactly that, not a monthly fee, and so there is no entitlement to pro-rata refund. I argued that the contract between us makes no provision for what should happen to the fee if Creation cancels, so basic principle of fairness should apply. Also CRA provides for a term being unfair if it allows a trader to withhold all of the amount paid for the service if they don’t provide all of the service, eg I paid for 12 months use of the card but only received 7. (NB at one point the judge asked counsel whether he agreed that Creation is a trader and I am a consumer for the purposes of the CRA – he did, but the fact that the judge asked suggests to me that we shouldn’t take it as read).

– The free night voucher was not due as my account was not open on the anniversary. I argued this was only because Creation had prevented me from complying with that formality, and again, the CRA addresses that. I also pointed out that it surely can’t be fair if a trader can take someone’s money in return for a promised service, then (potentially immediately) give notice to cancel the contract yet keep all of the money paid.

– Re the “points have no value” argument, I argued that this was moot because Creation hadn’t transferred them to my IHG account in the first place, and this doesn’t alter their obligation to do so.

– I did mention that (as I have said all along) I am open to Creation simply transferring the points and voucher owed over to my IHG account in lieu of those parts of my money claim; but it seems you can’t claim for something that isn’t explicitly in the particulars. My mistake – my claim was for money on the basis that Creation had refused to honour the benefits, and I was seeking the cost of replacing them (and, you know, *Money* Claim Online 😉 I recall there was some suggestion also that it wouldn’t be possible to order that remedy anyway, because we have no idea what if any arrangement Creation still has with IHG or whether it is even now possible for them to supply points and voucher.

– Counsel tried to argue that because one of my credit card statements (well before notice of closure) showed a fairly low spend, and the first one after notice showed a high spend, this pointed to an unusual spend pattern / something amiss. I argued this shows nothing of the sort and is just taking two statements out of many – it was perfectly normal for me to spend large amounts some months, nothing untoward, there was nothing in breach of terms, no problem was notified by Creation, my account was closed by their business decision rather than any fault of mine, and in any case this is not relevant to the breach of contract. It felt a bit like they were clutching at straws, but I assume the idea was to get the judge to think I might have been doing something dodgy (I definitely wasn’t) and therefore give less weight to my arguments.

– There was no mention at all of Curve, despite the earlier statement showing quite a number of (perfectly legitimate) transactions via Curve (and in case anyone’s wondering, I did not engage in manufactured spend).

– Counsel tried to suggest jurisdiction was in the US. I pointed out that the credit agreement specifies that it is governed by English law.

– There was also a suggestion that because I didn’t contact Creation after the October statement when my points were first not transferred, I must have known they weren’t being transferred, yet I continued to spend. My response: the onus shouldn’t be on me to chase Creation for compliance with their contract terms every month, contacting them isn’t always easy, it’s not unusual generally for points sometimes to be delayed (IT issues etc), my assumption was they would likely award them in a block upon closure, and in any case none of this has any bearing on their contractual obligation.

– The judge enquired why I didn’t contact IHG to see if they would make good, and why they were not a party to the claim. I said the breach of contract was purely with Creation. I explained the relationship between IHG and Creation re co-brand credit card, completely separate entities, IHG owns and operates their loyalty programme while Creation runs the credit card on their behalf etc.

– There was also a question (I think from the judge, but perhaps it was counsel, not sure now) that if, say, something happened with IHG’s IT and points that had been in my IHG account were lost, would I expect any remedy? I said absolutely – if IHG was at fault, they would be expected to make good.

– The judge sought clarification about whether the rewards in question were provided by IHG or by Creation. I said Creation – while I don’t know the exact details of their arrangement with IHG my understanding is that Creation pays IHG for the points and then transfers them to my IHG Rewards Club account.

– Creation’s evidence bundle included versions of the IHG Terms that were not in force at the time… (June 2022 version), and also a very old version of the Credit Agreement. They argued it didn’t matter, I argued that not least because IHG has revamped its loyalty programme since, we really ought to refer to the correct ones (in my bundle). There was some question of whether I could be sure there were any differences – I said it’s not for me to go through line by line and compare them, we should be looking at the correct one in the first place.

– There was some debate about whether CRA applies, and whether the agreement was a service contract, and hence whether other remedies (which include damages – Chapter 4, Section 54) can be sought. I said yes to all, but it seemed the judge needed a solid legal basis. Counsel was unable to provide one to the contrary – wasn’t willing to “nail his colours to the mast” (judge’s words) to say definitely not. But as I’m not a lawyer, I was unable to give the legal basis – but I did submit that surely the CRA was the relevant legislation (being all about consumers and their rights etc), and surely it is a services agreement because Creation provides financial services, the service being credit etc. Judge didn’t seem entirely sure.

– There was also a discussion of whether it was in fact the FCA’s role to consider unfair contract terms rather than the court – I said that by my reading of the CRA, enforcement by FCA et al was more for when a company needed to change its terms because they were deemed unfair, rather than about a specific breach of contract as here. (And I don’t think I said it at the time, but should have – Sections 58 and 71 explicitly reference the powers and duties of the court.)

A couple of other things perhaps worth noting:

– Notwithstanding the court’s order to do so, Creation declined to submit a witness statement and instead sent a letter saying they’d rely on submissions to be made at the hearing. Which I felt potentially put me at a disadvantage (no prior visibility of their arguments, their counsel was able to cross-examine me but I was not able to return the favour). I could have objected, according to the hearing notice, but as the likely outcome of that was potentially an adjournment, I decided not to. I did mention it in court though.

– Counsel’s skeleton argument came over around 8:30am on the day of hearing. I sent mine over about 15 minutes later but it didn’t make it to the judge (the hearing was at 2pm). The judge offered to go and get it and read it, but made clear that it would eat into my 20 minutes, so I spoke to it instead.

Ultimately the judge said it was unsatisfactory that neither of us had been able to give him the direction he needed to make a decision (which was understandable but also a little frustrating for me as a non-lawyer / layperson – I suspect this hearing may well have been stretching the limits of being a litigant in person). He was therefore unable to give a judgement there and then and would have to go away and prepare a written one (which he didn’t seem too happy about, also perhaps understandably; he also complained about such a small case taking up court time when there are far more important ones struggling to get hearings). He strongly suggested we try once again to settle, and then left us to it (and after some discussion with counsel – all very amicable and informal – and him consulting with his instructing solicitor, we were able to come to an agreement in principle, which was subsequently formalised as a Tomlin order filed with the court).

Overall, I *think* my arguments landed, otherwise I’m sure the judge would have dismissed early on, on counsel’s argument that the claim has no basis in law. But the fact that he didn’t makes me think he felt I did have a case, but not necessarily strong enough to make it a clear-cut judgment. Part of me thinks perhaps I should have let it go to written judgment, as I do still think I had a strong case, that I suspect would have been made a lot clearer by studying the written submissions. Although it’s also possible of course that I’m misinterpreting the CRA. But I do think settling was the right thing to do at that point. Risk/reward etc and also mindful of court time / use of public resources.

My sense was that the written judgment, if it came to that, could go either way, probably 50/50 chance, so it wasn’t worth the risk of potentially having costs awarded against me (theoretically unlikely for a small claims case I know, but given some of the judge’s comments during the hearing, I wasn’t so sure). I’m speculating, with only layman’s knowledge, but my guess is that the likely outcome would be a 0-0 draw – the judge would find for me on breach of contract but then say there’s no right to damages/compensation, so no money awarded. I suspect there was probably then a good chance he might have ordered costs to be shared… I still think it ought to go fully my way, given Creation’s behaviour, and all principles of fairness, but I accept that there may be points of law that prevent remedy.

I do wonder whether, had the judge been able to spend an hour fully reading my claim particulars, the defence submission, and then my reply to the defence, perhaps the actual hearing itself might have been much much shorter, with a definitive outcome. Who knows. (Ironically, both parties originally said in our directions questionnaires that the case could be decided without a hearing, on the documents alone, but the court evidently disagreed and ordered a hearing anyway).

I also think that, in hindsight, possibly what I should have done at the hearing was to simply read out, almost verbatim, my reply to the defence document…

Anyway, I hope this might have been useful to anyone else with an upcoming hearing. But one final note – the judge did say, right at the start, that as a small claims hearing, “we can do this anyway we want to, so long as it’s fair” (I’m paraphrasing). Which I guess means that other hearings may not necessarily follow the same format… Nonetheless, I hope this gives a flavour. Interesting experience – glad I did it, I have learned a lot.

[StillintheSun]

Frankly sounds like you did wonderfully in Court, better than a lot of trained advocates 🙂

I’m sure your account of the hearing will be really useful and absolutely well done for getting a settlement. Great encouragement to others!

[NorthernLass]

You obviously acquitted yourself magnificently, @Jon, bravo! I can’t believe that Creation’s lawyers were trying to derail your case by claiming such things as jurisdiction being in the US. Who were they, incidentally?

[Rui N.]

Thanks a lot Jon, very interesting and fantastic job on your point.
I also stress NorthenLass’ point about they claiming the US to be the jurisdiction. For my that should be reason enough for the judge to stop the proceeding, hold counsel in contempt (or something of the sort) and refer the case for regulatory analysis by the FCA. Shameful behaviour. I don’t understand how a judge can allow that in their court.

[kwho]

Well done, Jon. I think you would have won the case if it went to a written judgement. Interesting that initial suspicion how this saga started is the use of Curve with Creation as the underlying card, and payments to some merchants/websites which Creation did not like. None of this was ever brought as evidence.

I know two other cases, which Creation stated in court statements that “account was not in good order” but when prompted to provide evidence, they just ignored it.

[Jon]

Thanks all! 🙂

@NorthernLass: Shoosmiths. Not sure which chambers counsel came from.

@Rui That’s interesting – I hadn’t realised the jurisdiction claim could potentially be that serious. Wish I had known that at the time – could have been interesting 😉

I think perhaps it all goes to show that much depends on the specific judge you get on the day (and maybe what mood they’re in 😉 Possibly a mistake I made was to assume that, in a small claims track case, with a litigant in person, the judge would bring the legal knowledge – or at least be familiar with the relevant legislation, in this case the Consumer Rights Act. Perhaps he was, but I didn’t see any indication of that – rather the opposite. I don’t mean that as a criticism of this judge – I assume every judge will have their own particular background, experience, expertise and speciality etc, and I assume it’s unlikely that any one person could know every piece of legislation inside out; but perhaps there’s room for improvement in how judges are allocated to cases, to ensure there’s a subject-matter fit? I can’t help feeling that the whole problem of legal basis could have been more easily dealt with if the judge knew the CRA. My previous experience of a small claims hearing, several decades ago, was that the judge was extremely helpful and ‘filled in’ the legal gaps, so perhaps that set me up with the wrong expectation. Having said that, I think another thing I hadn’t fully appreciated before (although I don’t know whether I’m perhaps making a generalisation here from one example, and maybe it doesn’t apply widely) is that the judge’s job isn’t necessarily to know the law but rather to rely on what the two sides tell him, and then make a decision, hence his comment about direction. I wonder what would have happened if I had made no reference at all to the CRA, or any other law, and argued purely on the basis of fairness, as an uninformed layman? (I rather suspect in this instance it would have been a very short hearing mostly comprising “case dismissed” 😉 I think if I were doing it all again, I would start from the assumption that the judge knows nothing, and prepare my submissions accordingly.

[Rui N.]

Just my opinion, but I think it’s quite unbelievable that an UK credit provider goes to court and claims that the UK has no jurisdiction over it. That’s beyond the pale.
UK credit providers are regulated in quite specific ways.