Property Professionals – Open letter to Barclays Partner Finance

The “assessment” was followed by an interview. Interviews were not carried out by the teaching staff of the centres, as might be expected given the ABBE requirement, but by a sales team. Frequently, there were so many applicants that interviews were conducted in tandem: two candidates at a time. This highly unprofessional behaviour made it very difficult for candidates to ask questions of the interviewer, particularly in respect of personal finances. For this reason, I believe that the basic requirements laid down for the regulation of loan agreements were breached and that “irresponsible lending”, as defined by OFT guidelines, took place.

The interviewers made much of the subsidy (already mentioned above) that would be available to trainees who, upon qualification, would commit themselves to working as contractors to PP+ sister companies: HipHipHooray (HHH) and Energy Assessor Panel (EAP). There was certainly no subsidy, only a discount – in itself a misrepresentation and a most important one. Trainees believed, quite reasonably, that if a company within the group was willing to subsidise training, then that company would make work available on which it could make a profit and recover the subsidy payment. It was hugely tempting to candidates who had no previous experience of self-employment to think that they would receive a baseload of work that guaranteed some income – indeed the very income needed to repay the loans. This technique was by no means a new one: The company owner, Allen Jackson, had already used it at other training establishments for plumbers and driving instructors. These businesses too have since failed.

The promise of work with HipHipHooray was a charade. Indeed, I am not aware of any evidence that payments were made in respect of the “subsidies” between the companies although it has been alleged by inside sources that this was done to falsely bolster the balance sheets and enable the owners to take excessive dividend payments.

Neil Kurz (proprietor of NRG Experts and Independent HIP Ltd) carried out extensive research through his estate agency contacts. At no time, apparently, did HHH have more than 1% of the HIPs market. That would imply a maximum of 20,000 EPCs a year. So, at the time PP+ interviewers were assuring candidates that there would be plenty of work available through HHH, there would in fact have been the equivalent of about 3 EPCs per year for each of the trainees that PP+ had taken on. Such earnings (a maximum of £120 after deducting costs) are hardly a basis upon which to plan repayments of a loan running to several thousand pounds per annum. I would therefore suggest that we have ample evidence of “irresponsible lending” as the bank’s agent was totally aware that the trainees would not be able to earn enough to repay the loan.

In 2006, the Government removed the requirement for the HIP to contain an HCR, the document that Home Inspectors were trained to produce. This was raised at interview by many candidates but the interviewer always reassured the candidates that Government would reintroduce the requirement. To some extent, this was consistent with declarations made by Secretaries of State Yvette Cooper MP and Caroline Flint MP. But by mid 2008, Government was consistently talking down the HCR and by 2009, the Housing Minister, Ian Austin MP, wrote in a response to an MP that Government no longer considered HCR to be the “right product”. Clearly, claims by PP+ that HCR was likely to be reintroduced was a misrepresentation, and one that encouraged many to sign up for training for DipHI.

The training contract was quite a complex document and was, in most cases, accompanied by further contract documents concerning the “subsidy” with HHH and, where applicable, the loan agreement with Barclays Partner Finance. Candidates were not allowed to take away copies of these agreements so that they could consider them more carefully or seek professional advice. In some cases, the interviewer ticked the boxes which the candidate was supposed to tick to confirm that clauses were read and understood. I understand that there was also an online application for finance which was carried out during the interview but which candidates were not allowed to see, either at the time or subsequently (possibly a breach of the Data Protection Act). Candidates were frequently pressurised into making a rapid decision with claims that “places were limited”. This seems to be a clear breach of the OFT guidelines on “irresponsible lending”.

Misrepresentation did not cease once candidates had commenced training. Having been advised that training could be scheduled to be completed within one year, various measures were taken to ensure that candidates were obstructed from completing modules and therefore be allowed to continue to the next module. This was particularly the case with respect to the assessment of the portfolio of work evidence for ABBE where work was returned unnecessarily to trainees for corrections. This led to trainees having to make supplementary payments or, as many no doubt did, abandon the course.

Candidates had also been told at interview that the module to become a Domestic Energy Assessor would be completed early in the course. This might allow trainees to earn some money and gain contacts with housing professionals while continuing their studies. However, this module was then moved to a later stage of the course to the trainees’ financial disadvantage.

In light of all the above comments, you will not be surprised to learn that there were many complaints. Other trainees had to seek deferment of training due to personal circumstances including ill-health and bereavement. Such matters were always dealt with by way of letters from Brian Wall, the Contracts Manager. It has since emerged that Mr Wall did not in fact exist, being a pseudonym  of the owner, Mr Jackson. Despite not existing, he claimed in one letter to be a mute (by way of reason for not returning telephone calls). This anecdote is by no means the worst of the misrepresentations but it is highly indicative of the cynical attitude taken towards the trainees.

As I mentioned above, it is still not possible to posit an exact figure for the number of trainees who may have a claim against your banks under s75. Nevertheless, on the basis of the known figures, I would estimate the potential liability to your banks to be of the order of £6 million each. Not a small sum certainly, but a tiny fraction of the profit figures that you have announced recently – a sum therefore which you could well afford to forego.

Compare that with the situation of the many vulnerable people caught up in the PP+ fiasco, most of them unemployed, some of them ex-servicemen and others who have served their country. They are facing serious debt, bankruptcy, the loss of their homes and strain on their domestic relationships. These people need rapid resolution of this matter. Justice delayed is justice denied.

To quote one of my recent correspondents: “we thought that they must be OK as backed by Barclays”. The banks do have some element of complicity in what has happened to these people, as does Government and its agencies. I do believe that the Financial Ombudsman will find in favour of all these trainees but how much better would it be for the banks to voluntarily take the necessary steps to cancel these loans and credit card transactions. It would not only be good for public relations but also save a great deal of administrative expense.

On behalf both of the Institute and the whole energy assessment industry, I urge you to take the necessary steps to bring a close to this matter and the suffering caused to many thousands of people who were deceived by your client and partner, Property Professionals+ Ltd.

Yours faithfully,

Joseph Pestell

Honorary Secretary, Institute of Home Inspection

[email protected]org.uk

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