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Creation Financial Services bashing

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  • 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.

    Jon

    I did have a brief chat with the FCA some months ago about whether it’s appropriate for a company that behaves as Creation has to remain a regulated financial services provider. Maybe I should follow that up more formally in writing. But perhaps the FOS will (eventually) make a recommendation on that…

    John

    What qualifications / experience does someone need to become a small claims / MCOL judge?

    If you believe the judge has erred in law, can you appeal the judgement?

    Jon

    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.

    Yes, whatever Creation’s reasons were, I don’t think it had anything to do with Curve, or account order, or manufactured spend etc – unless perhaps I and who knows how many others just had the misfortune to be mistakenly swept up by whatever database query or formula etc they used to identify the accounts they wanted to close. But in that case surely they wouldn’t have let thus go all the way to court, if it was a genuine mistake. Who knows – maybe it was something as simple as “people who never carry a balance” (although that should be Literally Everyone on a points-earning card 😉

    Jon

    What qualifications / experience does someone need to become a small claims / MCOL judge?

    None? 😂 I honestly have no idea – I’ve always assumed they were practicing lawyers with x decades of experience behind them.

    If you believe the judge has erred in law, can you appeal the judgement?

    You can apply for leave to appeal, yes – the judge explained a bit about that at the beginning. But I imagine the vast majority of small claims litigants, me included, wouldn’t have the legal expertise to know whether the judge had erred (and you can’t appeal just because you don’t like the judgment 😉 Of course, in my case there was no judgment, as we settled, so nothing to appeal anyway.

    JDB

    @Jon you did very well as I and others mentioned when you reported your settlement a few weeks ago. I had suggested when you reported, a very long time ago, the lengthy defence filed that it was classic two bit lawyer stuff to throw a whole lot of mud in the hope some sticks, however poor the argument. It also gives the impression that there is an arguable case in there. I also said the judge would be unlikely to have read the papers.

    Notwithstanding the judge’s natural reluctance to have to provide a written judgment, I think you correctly surmised that the decision might not have been as clear cut as many here seem for some reason to assume. I think the judge will have had a view at the end but would have wanted to go back through the bundle and his notes to check things and to check the law, but I don’t think he would have exhorted the parties to settle so much if he was inclined to find entirely in your favour as I am sure you will have come across well, so settling was clearly the right way to go in order to de-risk and avoid a potential pyrrhic victory.

    I think the US jurisdiction point must relate to the IHG scheme which is governed by Georgia state law – I can’t believe they were suggesting the whole case might have been under US jurisdiction and the point re the judge stopping the case without listening to the argument and contempt etc. is risible.

    Re judges knowing the law, of course most do, but they clearly can’t know every provision of every statute, so they do rely upon the lawyers to tell them what legislation or authorities they are relying on in their arguments but they don’t simply take what they are told at face value but expect to see the full authorities/legislation, White Book references etc. There is less knowledge now than there used to be as many lawyers/judges don’t read law but do a one year conversion course and then often specialise quite early so have rather rudimentary knowledge of aspects of law outside their area that nevertheless impact their cases.

    JDB

    What qualifications / experience does someone need to become a small claims / MCOL judge?

    If you believe the judge has erred in law, can you appeal the judgement?

    Most are trained as solicitors, some as barristers. You won’t earn as much as a good one, but it gives you a secure income, good pension and 9-5 hours. You have to jump through a lot of hoops to become a (Deputy)District Judge. An appeal is not a rehearing of the case for a second bite of the cherry!

    You can appeal a decision (but not in Jon’s case as there was none to appeal) but the threshold to get permission/leave to appeal is high and you are at risk of costs – you effectively exit the small claims cost system. In this sort of case it’s pretty unlikely to find that a judge has erred on a point of law and the range of discretion in unfairness type cases again makes an appeal quite tricky.

    memesweeper

    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 .

    You’re entitled to your view. I’ve lost larger amounts to contract breaches and not sued. I’m pushing Creation on this for many reasons, including because it is inexcusably flagrant legal breach by a operationally incompetent company. I know the amount of free nights/points isn’t really the biggest deal, especially in the context of the gains I’ve made during my time focussing on ‘the hobby’.

    JDB

    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 .

    You’re entitled to your view. I’ve lost larger amounts to contract breaches and not sued. I’m pushing Creation on this for many reasons, including because it is inexcusably flagrant legal breach by an operationally incompetent company. I know the amount of free nights/points isn’t really the biggest deal, especially in the context of the gains I’ve made during my time focussing on ‘the hobby’.

    If the judge in @Jon’s case had concurred at all with your “inexcusably flagrant legal breach” view, the case would have ended much earlier and he wouldn’t have reserved judgment, nor probably have pressed the parties to settle the matter at the start and finish of the case. @Jon who had the benefit of being there and is clearly very on the ball also said that he perceived a risk of a 0-0 draw as he put it and I am sure he came to that view advisedly.

    It’s very dangerous to go into a case too gung-ho.

    jj

    Like @JDB, and for the reasons he says, I don’t see this as an inexcusably flagrant legal breach. But I do see it as an inexcusably flagrant breach of the conduct standards expected of financial services businesses in the UK.

    The value that I place on the time I spent preparing my detailed FOS submission was greater than the value I lost in points and vouchers. My reason for pursuing the case is that, as a financial services professional, I am dismayed to see my industry tarnished by behaviour and an attitude that I would not expect from a back-street market trader.

    memesweeper

    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 .

    You’re entitled to your view. I’ve lost larger amounts to contract breaches and not sued. I’m pushing Creation on this for many reasons, including because it is inexcusably flagrant legal breach by an operationally incompetent company. I know the amount of free nights/points isn’t really the biggest deal, especially in the context of the gains I’ve made during my time focussing on ‘the hobby’.

    If the judge in @Jon’s case had concurred at all with your “inexcusably flagrant legal breach” view, the case would have ended much earlier and he wouldn’t have reserved judgment, nor probably have pressed the parties to settle the matter at the start and finish of the case. @Jon who had the benefit of being there and is clearly very on the ball also said that he perceived a risk of a 0-0 draw as he put it and I am sure he came to that view advisedly.

    It’s very dangerous to go into a case too gung-ho.

    You are right, it absolutely is. And in my case I can already see one flaw in my prep! But it *is* a clear contract breach and an intentional choice to do so by a large corporate. The woeful throw-anything-that-might-stick defence that @jon described hasn’t put me off at all. There’s no way they took legal advice before taking the action they did, if they had, they’d have presented a cogent argument for why their actions weren’t a clear breach. They can’t present an argument because they don’t have one.

    Supergers49

    I am dismayed to see my industry tarnished by behaviour and an attitude that I would not expect from a back-street market trader.

    This is why I am angry about Creation’s treatment of customers. If my professional acts/omissions resulted in unfair treatment of customers of this nature, I would risk not being able to operate within the Financial Services industry going forward. It is intolerable to me that Creation have been permitted to act in such bad faith.

    JDB

    I did have a brief chat with the FCA some months ago about whether it’s appropriate for a company that behaves as Creation has to remain a regulated financial services provider. Maybe I should follow that up more formally in writing. But perhaps the FOS will (eventually) make a recommendation on that…

    I doubt the FCA is too interested – this is a long way down the scale of misbehaviour that goes on and they have a history of ignoring much more serious reports while throwing the book at trivia. Here, very few people were affected and only a tiny % of black cardholders (ie most have no complaint). The FCA will also tell you that they are less interested in the paid credit card market as they believe such holders are sophisticated enough to sort themselves out and they aren’t too interested in rewards element of financial products. If there were some issue with money, that might be different.

    Remember the FCA ignored Woodford, London & Counties etc. despite multiple warnings and what they were up to being in the press and well known in financial circles. The German regulator missed Wirecard and actually tried to prosecute the journalists who initially reported the problems. Of course the FCA has received more complaints about a firm named after the patron saint of Spain than all the Creationists but nothing has happened.

    One issue all this has thrown up is the effective mis-booking of many offending transactions – ie what were really ‘cash advances’ being booked as purchases. Hence the changes seen at various providers.

    The FOS is expected to report any serous conduct concerns it observes to the FCA and if that were to happen it would get investigated.

    Lady London

    @Jon you have done an absolutely fabulous job. Not just in preparing and dealing with what was thrown at you in the hearing but in the time of your own you have given us in sharing the detail.

    The demands on you make a mockery of the idea that Small Claims track is for ordinary people. As @Stillinthesun says, many lawyers wouldn’t have done as good a job as you. There’s hints that the judge recognised this too. It sounds like the judge knew the CRA better than it seemed, but there was a window when you could have won but some potential limit on his ability to give you what a layman would view as fair.

    Perhaps it was simply that you asked for money when the contract gave you points and nights – I think I would have absolutely asked for a money valuation too. But I might also perhaps have indicated that a direction from the judge of specific performance by Creation as an alternative would be acceptable. ie judge tells Creation to provide you the points due and any free night token(s) you view as due, plus ask an additional amount for interest/inconvenience/time delay since the points and nights were not awarded timely and have required extensive effort and time to pursue. Also, an amount for the 2 months use of the card you should have had under the terms if you were one of the cards that was terminated immediately.

    Lots here for everyone to take into account for their own case so future cases against Creation will have key bases covered following your example Jon. Also thanks especially to @JDB and @StillintheSun who’ve taken such time to give detailed advice.

    Scott

    Well done on going through with this, but your report had put me right off attempting anything similar. I find it hard to believe some of the things you mentioned, e.g. judge not reading the documentation that the parties were requested to submit.
    I guess I’m too naive(!), but I’m also quite shocked that it seems a company can behave in such a way, with no comeback. It’s certainly making me view some finacial services ‘contracts’ in a different way.

    I notice you haven’t mentioned what settlement was agreed, any reason you don’t want to reveal this? I think it would be helpful to others in the same boat (not for me, thankfully I’m not affected by this debacle.)

    JDB

    @LadyLondon the court doesn’t have the power to award anything for inconvenience, time delay etc.(but the FOS does have that power) nor interest unless pleaded and it probably wouldn’t apply in this case anyway. It’s questionable also whether the court can order the points and/or voucher to be provided, again something that the FOS could do. For what it’s worth, you also can’t adjust your case as you go along!

    Jon

    @LadyLondon Re specific performance, yes – another thing I’ve learned from this is that even if you’re claiming for money, if there are other remedies that would be acceptable to you, you must specify them in the claim particulars. Doesn’t mean the judge will entertain them, but they definitely won’t if they’re not in the claim, and they can’t be added later.


    @Scott
    Don’t be put off! Certainly bringing a claim takes a fair bit of time and diligence, but it’s nothing to shy away from, I think. So long as you feel you have a strong case, of course. (That said, I do agree with Lady London – for something that is supposedly about making justice more easily accessible to all, there is much in the process that may deter people, but also much that could – probably quite easily – be done to change that).

    My view is – be prepared to lose, and calculate your risk/reward from there. And I suppose the other step, that some may find easier than others, is to put aside the emotion/indignation/annoyance/etc of whatever the other party has done to you to cause your claim, and view the whole thing dispassionately. In my case, I did it as much for the principle as for the money, and while the emotional part of me would have liked to see it all the way through just for the satisfaction of (hopefully) seeing Creation lose, rationally the risk was too high.

    On the judge not (fully) reading the documentation – it’s unfortunate, but understandable I think, given pressure on resources etc. In an ideal world, judges would have plenty of time (and not just in their lunch break!) to properly and thoroughly study the paperwork, but it is what it is (maybe one day people will be happy to pay more tax for better public services and vote accordingly, but that’s a whole other debate – and I’m now going to go and duck behind the nearest wall 😉

    I do think there are some process oddities – e.g. I really don’t understand why the court ordered witness statements and evidence bundles, when everything had already been said in my particulars and their defence doc, and (other than myself) there were no witnesses to call. Also not sure why the court ordered a hearing even though both parties said it wasn’t needed. But there we are. FWIW I believe it was a different judge doing the ordering at each stage, so the hearing judge was not, I believe, the one who ordered the hearing or the one who ordered the witness statements.

    I think in hindsight, if I were doing it again, I’d actually put far less effort into the documents, maybe even keep the claim to just one or two pages and not even bother with appendices of evidence, but then put the time into preparing a really solid trial bundle for use at the hearing. But of course part of the point of going into detail in the claim is to try to persuade the other party that you have a strong case that they don’t want to go to court over…

    On the settlement, I’m not at liberty to discuss the terms (although perhaps that no longer applies now that the case is closed?). What I can say is that my claim was for a bit over £1,200 (plus costs and statutory interest of course), comprising roughly:

    – £460 for 46000 points earned but not transferred, at the purchase price of 1p per point.
    – £490 for the free night certificate, based on the cash-equivalent cost of the room/hotel I intended to use it for, where I already had an adjacent night booked with a previously-earned certificate.
    – £250 for consequential loss of 25000 points Elite Choice Benefit due to Creation’s failure to transfer the earned points meaning I missed out on re-qualifying for Spire Elite status (I suspect that one was a long-shot, but I included it anyway, as I did miss the ECB and I would have got it had Creation not withheld the points).
    – £37 pro-rata fee refund for the five months between account closure and next anniversary (this was just on principle really – trivial amount of money in the scheme of things, but why should they get away with it, and the CRA specifically addresses that situation).

    My costs were £203 (£80 MCOL fee, £123 hearing fee). I did also pay £83 for a warrant of control way back, but that was my mistake – I jumped the gun on getting a judgment in default due to the technicality I mentioned earlier (I do think there’s room there for process improvement and better information in the MCOL forms, but nonetheless, my mistake).

    So in total, a bit under £1500. Obviously the settlement wasn’t the full amount. But given the probability I mentioned earlier re which way written judgement might go, I felt it was commensurate.

    I do think one implication arising from all this is that we should probably all be very wary of credit card (or other) propositions that only award a benefit on the account anniversary if the account remains open – particularly where the account remaining open is at the provider’s discretion. By my reading of the CRA, that’s another scenario that is specifically addressed and would be an unfair contract term, but the fact the court evidently didn’t see it as quite that clear-cut makes me think we should probably be cautious. It will certainly change my calculations when considering whether to apply for a credit card or join a loyalty programme etc – best to assume any such benefit will not be awarded, and do the cost-benefit without it. Of course, what the providers probably ought to do, to restore confidence, is add a sentence to their T&Cs immediately after any reference to “subject to the account remaining open…” to the effect of “This will not apply if we close your account through no fault of yours”.

    What a sad state of affairs that we should have to default to assuming our financial services providers are not trustworthy. Whatever happened to “My word is my bond”? Yeah yeah, I know, long gone… 😉 But imagine, right at the beginning when all this first blew up, if Creation had held its hands up and said “Sorry, we messed up, we’ll fix it, here’s your points and vouchers and something for your trouble.” Reputation repaired, goodwill generated, court cases avoided, FOS not involved, brand destruction averted…

    Crafty

    Thank you very much Jon for providing all this very useful information.

    Jon

    My pleasure – glad it’s useful.

    JDB

    @Jon re trustworthiness of financial institutions, shouldn’t that be a two way street? Providers ought to be able to rely on cardholders not being totally expedient and expect them to do the “right thing” rather than exploiting them.

    Flying Moonwards

    @Jon re trustworthiness of financial institutions, shouldn’t that be a two way street? Providers ought to be able to rely on cardholders not being totally expedient and expect them to do the “right thing” rather than exploiting them.

    I don’t know you, I don’t know who you are, and I don’t know what your agenda is here, but your posts are tedious. Give it a rest mate.

    jj

    @Jon re trustworthiness of financial institutions, shouldn’t that be a two way street? Providers ought to be able to rely on cardholders not being totally expedient and expect them to do the “right thing” rather than exploiting them.

    As someone who designs financial service products, I don’t agree with you her, @JDB. Given the inequality in both information and the ability to determine price and conditions, the financial institution is in a much stronger position and ethically oought to look out for the punter.

    We all know that all financial services products can be abused by some borrower’s, and that’s a risk we have to take. If it gets out of control, we change the rules – but never retrospectively or unfairly.

    jj

    @JDB, to illustrate my point, Virgin dealt with the MS issue responsibly. They had always capped their liability by awarding points only up to the credit limit on the account, and they simply changed some transaction codes to stop Curve Fronted from materially changing customer behaviour. Both of those were reasonable steps. Withholding points and card benefits is not reasonable.

    _aDifferentSimon_

    @Jon re trustworthiness of financial institutions, shouldn’t that be a two way street? Providers ought to be able to rely on cardholders not being totally expedient and expect them to do the “right thing” rather than exploiting them.

    I don’t know you, I don’t know who you are, and I don’t know what your agenda is here, but your posts are tedious. Give it a rest mate.

    Considering the time and effort and obvious knowledge JDB puts into their posts this is very unfair. Yes, it can be viewed that (s)he nails his/her colours to the mast but it is surely a very net positive poster on this forum. So thanks JDB!

    dougzz99

    @Jon re trustworthiness of financial institutions, shouldn’t that be a two way street? Providers ought to be able to rely on cardholders not being totally expedient and expect them to do the “right thing” rather than exploiting them.

    I don’t know you, I don’t know who you are, and I don’t know what your agenda is here, but your posts are tedious. Give it a rest mate.


    @JDB
    is one of the most accurate, consistent and useful posters to these forums. He doesn’t follow the herd, or provide just another echo chamber. What you don’t like the just move on from. It’s the Internet.

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