Figurasin & Anor v Central Capital Ltd
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE LAWS
- LORD JUSTICE VOS
Areas of Law
- Consumer Protection Law
- Financial Services Law
- Contract Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
In the case of Central Capital Limited (CCL) vs. Mr. and Mrs. Figurasin, the court ruled in favor of the Figurasins, awarding them £13,000 in damages. The Figurasins were mis-sold payment protection insurance (PPI) as part of a loan agreement. The court found that CCL did not clearly, fairly, or accurately communicate the cost associated with the PPI, contrary to the Insurance Conduct of Business Rules (ICOB). The inadequate and misleading information provided led the Figurasins to believe that the monthly payments included the PPI without realizing they were taking on additional borrowing specifically for the insurance. The judgment reinforces the importance of clear and transparent communication in financial agreements.
Judgment
Lord Justice Patten :
This is an appeal by Central Capital Limited (“CCL”) against a judgment of Mr Recorder Abid Mahmood in favour of the claimants, Mr and Mrs Figurasin, following a trial in the Manchester County Court. The Recorder ordered CCL to pay damages in the sum of £13,000 (inclusive of interest) for mis-selling payment protection insurance (“PPI”) in conjunction with a loan of £25,000 which Mr and Mrs Figurasin applied for in order to consolidate their existing debts. The secured loan agreement which the claimants entered into on 17 October 2005 was for a period of ten years during which the loan was repayable (including interest) at a cost of £291.61 per month. In addition, they were required to repay what was described as a payment protection loan of £8,750 at a rate of £102.07 per month which represented the cost of funding the premium for the PPI which they had agreed to take out. This brought total their monthly payments to £393.68.
In their amended particulars of claim (“APC”) the claimants alleged a number of breaches by CCL of the Insurance Conduct of Business Rules (“ICOB”) and, in particular, ICOB 2.2.3(1) R which provides:
“(1) When a firm communicates information to a customer, it must take reasonable steps to communicate in a way that is clear, fair and not misleading.
(2) Paragraph 1 does not apply to a firm when it communicates a non-investment financial promotion in circumstances in which ICOB 3 (Financial promotion) applies to the firm.”
ICOB 2.2.5 G states:
“ICOB 2.2.3 R covers all communications with customers, for example, any oral or written statements, telephone calls and any correspondence which is not a non-investment financial promotion to which ICOB 3 (Financial promotion) applies.”
A contravention of an ICOB rule by an authorised person such as CCL is actionable in damages at the suit of the person who suffers loss as a result of the contravention: see Financial Services and Markets Act 2000 s.150(1).
At the trial the Recorder dismissed all of the claimants’ complaints except for that pleaded in paragraph 6(c) of the APC. This stated:
“It was not made clear to the Claimants that the PPI was being purchased by a further loan of £8,750 to finance an advance payment of the premium to an insurance company. The Claimants were not asked if they wanted to pay in advance for PPI. They were not given any reason for so doing, then (or even now). The decision of these financially constrained Claimants to put an