Monday, 15 December 2014

Back to the future? Scottish private sector tenancy reforms would leave tenants in a worse position than those in 1980

Govan Law Centre (GLC) has expressed dismay that the Scottish Government's proposed private sector tenancy reforms are considerably more regressive for tenants than the then Conservative Government’s introduction of the short assured tenancy in Scotland some 34 years ago.

The Government's proposals are set out in its document, 'Consultation on a new tenancy for the private sector'. The proposals appear progressive at first glance, with the suggestion of abolishing the 'no-fault ground' for eviction in short assured tenancies, however, when one reads further it becomes apparent the provision of greater security of tenure for tenants is wholly illusory as the Scottish Government set out eight new mandatory grounds of eviction that would enable landlords to choose to evict on the flimsiest of reasons.

In GLC's response to the consultation response we argue that the mandatory repossession grounds undermine the entire policy exercise:

In relation to rent arrears, the proposed ground 6 (three months’ arrears of rent) is in direct conflict with the will of the Scottish Parliament in legislating in the Homelessness etc., (Scotland) Act 2003 to provide a reasonableness defence for the current three months arrears of rent (ground 8, schedule 5, Housing (Scotland) Act 1988). Where is the evidence now that this defence should be repealed in relation to rent arrears which may be due to housing benefit errors or delays."

"The proposed new mandatory grounds 1 to 3 are couched in very weak language: the use of the word ‘want’ sets the bar very low. For example, it would not be necessary to provide evidence that a house was being marketed for sale, or that the mortgage lender had required a sale to repay the lending secured over the property.  Instead, all that would be required to evict a tenant in the private sector is that the landlord ‘wanted’ to move back in, or sell, or that their lender wanted to sell. In other words, there would be no need to establish an actual sale was taking place or that the landlord really did need to and was moving back into the property".

"Ground 4 is even more open to exploitation by landlords to the detriment of tenants: all that a landlord need say is that he or she intended to ‘refurbish’ to evict a tenant/family. What is ‘refurbish’? It might never materialise, or indeed it could be as little as painting a wall or installing a new sink. Why should this be a mandatory ground of eviction?"

"Ground 7 makes provision for a mandatory ground of repossession for ‘anti-social behaviour’. If the anti-social behaviour was a symptom of an illness or behaviour that had since been modified why should the tenant be subject to mandatory repossession? The requirement on the court to consider reasonableness is an essential requirement to ensure fairness and justice."

"Ground 8 enables a mandatory ground of eviction where the tenant has otherwise breached the tenancy agreement. Without the common sense protection of a defence of ‘reasonableness’ will tenants be evicted for the most minor contractual breaches?

Finally, we note PRS evictions will no longer be dealt with by the Sheriff Court and instead will be dealt with by the First Tier PRS Tribunal. This change in policy (for reasons of cost savings) does concern us because losing the roof over your head is such an important issue that it should be dealt with by an experienced and more senior judge.  We also question how can PRS Tribunals be seen to be genuinely impartial when their chairs are often part-time judges employed or engaged by landlords in private practice to undertake eviction actions?"

Monday, 1 December 2014

Govan Law Centre welcomes FCA clamp down on payday loan 'brokers'

Govan Law Centre (GLC) has welcomed the Financial Conduct Authority's (FCA) new consumer credit rules for payday loan credit brokers as an essential measure to tackle the exploitation of consumers from a new breed of credit brokers  (the new rules will form part of the CONC rulebook with effect from 2 January 2015).

Customers across the UK looking for a payday loan online are regularly duped into thinking the company they are giving all of their personal information to is a payday loan company, when in fact it is a 'broker' who will typically charge a fee of £50 to £100 for passing on the customer's details to multiple third parties, who then often impose charges themselves.

GLC's Principal Solicitor, Mike Dailly said: "We believe payday loan brokers have been ripping people off for far too long in the UK. They mislead consumers into thinking they are the loan provider when in fact all they do is pass on data to the detriment of people who are then subjected to a series of unexpected charges taken from their bank account without informed consent, often from multiple third parties. We are confident the rules will protect most consumers - as once customers know the broker is proposing to charge them the equivalent of money for old rope, they will avoid these exploitative middlemen". 
Since July this year the Royal Bank of Scotland has reported that payday loan brokers have attempted to take money out of their customers accounts more than 1 million times - with 25,000 being successful - netting £1.1m, as against £60m if all attempts had been successful - for RBS/Natwest customers alone.  
The new FCA rules will ban credit brokers from charging fees to customers, and from requesting customers’ payment details for that purpose, unless they comply with new requirements ensuring that customers are given clear information about who they are dealing with, what fee will be payable, and when and how the fee will be payable.                                                 
The FCA’s concerns relate to:
  • a lack of transparency, resulting in consumers often not realising they are dealing with a broker rather than a lender;
  • fees being taken without informed consent, for example where terms and conditions are hidden or misleading;
  • consumers being misled as to the purpose of giving their payment details;
  • firms passing on consumers’ details, including their payment details, without informed consent, to other firms who also take a fee; and
  • consumers facing difficulty in identifying the firm that has taken a fee, and in obtaining a refund from the firm or a response to their complaint.
Thew new rules will also require credit brokers to:
  • include their legal name, not just their trading name, in all advertising and other communications with customers;
  • state prominently in all advertising that they are a credit broker and not a lender; and
  • report quarterly to the FCA listing their website domain names, if they charge fees to customers.
Consumers will also have a 14-day right of cancellation where credit broking contracts are entered into as distance contracts, for example online.
Over 40 per cent of consumer credit complaints received by the FCA relate to credit brokers, 80 per cent of which relate to firms who charge upfront fees. The FCA has also received relevant intelligence from consumer groups and others who are seeing increasing complaints from people who have had money taken from their accounts unexpectedly and often by more than one broker.
The FCA is investigating a number of credit broking firms; seven firms have been stopped from taking on new business and, to date, three further cases have been referred for enforcement action.


Tuesday, 19 August 2014

Ombudsman writes £100,000 off on 'irresponsible' loan secured on Glasgow couple's home

A Glasgow couple who borrowed £20,000 on a APR of 16.2% over 40 years - at a whopping total cost of almost £124,000 - have been successful in arguing that their lender failed to undertake a proper affordability check, had overridden its own lending criteria, and irresponsibly sold an unaffordable product to the couple, which was secured on their home.

The couple, respresented by Govan Law Centre, could not pursue a claim against their independent financial advisor (IFA) firm, which had since folded, and the lender sought to hold the IFA responsible for any failing. The Ombudsman held that 'I did not consider that White Label had properly assessed how the loan would be affordable so far into Mr and Mrs C's retirement'. The Ombudsman ordered the lender to release the couple from the current loan agreement, effectively writing-off £100,000 in terms of the secured loan agreement.

The couple's solicitor, GLC's Mike Dailly said: "This is a fantastic result for our clients who would have otherwise been looking at repossession. It raises two important principles; first, that a lender is ultimately responsible for their own product and cannot always avoid liability by pointing to a third party financial advisor who sold their product as an intermediary, and secondly, a lender has to adhere to its own lending criteria and make sufficient enquiries to assess affordability".

The Ombudsman's Final Decision is here.

Wednesday, 13 August 2014

Govan Law Centre participates in UK launch of the Justice First Fellowship - opportunities for legal traineeships for those committed to social justice and social welfare law

Justice First Fellowship is a prestigious new Scheme established to support the next generation of students in the UK committed to public interest and social justice issues who want to pursue a career in social welfare law. The Scheme has been established by The Legal Education Foundation, in partnership with Govan Law Centre and other organisations in the social welfare law sector.

Govan Law Centre is one of seven organisations in the UK participating in the Justice First Fellowship, other partners include Coram Children's Legal Centre, Coventry Law Centre, Deighton Pierce Glynn, Greater Manchester Immigration Unit, Staffordshire North and Stoke on Trent Citizens Advice Bureaux, and the Public Law Project.

This is the first year of the Scheme, and it will focus on law graduates that have passed the Legal Practice Course or Diploma in Professional Legal Practice and are seeking to complete their training contract before taking up a role in social welfare law. The aim is that the Fellowship Scheme will come to be seen as a respected route to a career in this important area of law, with Fellows going on to become leaders in their field and important advocates for access to justice and the rule of law.

In 2014, the Fellowship has three parts. To provide:
1.      Training contract placements for law graduates seeking to pursue a career in social welfare law;
2.      Fellows with time and resource alongside their traineeships to develop and implement a project that will advance access to justice in some way;
3.      Additional support, training and opportunities for Fellows to gain skills and feel part of a wider movement of people committed to access to justice.

For more information and how to apply please visit the Justice First Fellowship website here; please note that applications cannot be made until Monday 8 September 2014, when the application process goes live.

Monday, 7 July 2014

Glasgow tenant with learning disabilities wins bedroom tax appeal with help from Govan Law Centre

Govan Law Centre (GLC) has secured a successful appeal at the First Tier Tribunal in an unusual case. Our client has learning disabilities and experiences a high level of anxiety. She has lived in her tenancy for some years and has an essential support network in her local area.

Agencies involved with our client were of the opinion that to move home would cause her extreme distress and be detrimental to her health. Our client is unable to deal with paperwork and benefits did not understand the concept of the underoccupancy charge or the process of applying for discretionary housing payments. Our client had accrued rent arrears  before she accessed support to secure discretionary assistance and this had caused her to experience high levels of anxiety.
In addition, being advised that discretionary housing payments were not guaranteed and had to re-applied for caused her great distress. It was recognised that our client did not have a specific need for an additional bedroom. She said herself she did not ask for an extra bedroom when she was allocated her tenancy and suggested that she would board it up if this would stop her being charged for this room.

Rather our client had a specific need, due to her disabilities to remain in her current home. It was an irrefutable reality that she was unable to detach her ‘spare’ room from her home, Our client's need to remain in her current accommodation, due to her disabilities and health needs were not considered by the bedroom tax regulation.
We submitted that this was discrimination against our client and that the provision of discretionary housing payments did not temper this discrimination in our client’s case. We asked that the local authority made additional no discretionary payment for our client so as to comply with their Public Sector Equality duties. This was accepted by the Tribunal.  The client was represented by Claire Findlay, welfare rights and financial inclusion officer with GLC's Prevention of Homelessness Project.