To the Directors and Shareholders of Barclays PLC and HSBC Holdings PLC<\/p>\n
This letter is addressed to Barclays PLC in its capacity as the owners of Barclays Partner Finance, a company which had a trading arrangement with Property Professionals + Ltd (PP+) by which finance packages were sold to candidates for training at the four centres operated by PP+.<\/p>\n
This letter is addressed to HSBC Holdings PLC in its capacity as owner of HSBC UK which had a merchant \u201csupplier\u201d agreement with PP+ by which the company could take payment from candidates who wished to pay by credit card or debit card.<\/p>\n
The letter is copied to Mr Shane Biddlecombe of HJS Recovery, an insolvency practitioner charged with the Administration of PP+, the company having gone into administration on 3 February 2010.<\/p>\n
The letter is an open letter and copies will be sent to other interested parties, regulatory bodies and the media.<\/p>\n
The writer is Honorary Secretary of the Institute of Home Inspection which has been contacted by many of the former trainees of PP+. He also attended an assessment and interview at Home Inspector Training, Bristol, before deciding to train as an energy assessor with ECMK in 2007.<\/p>\n
PP+ (previously Home Inspector Training) is a training company set up to provide training to candidates who wished to qualify as Home Inspectors (DipHI) and Energy Assessors (DipDEA\/DipNDEA). The company set up four training centres at Tolworth (SW London), Birmingham, Bristol and Manchester. It advertised widely both in the national and regional press, far more than any other training company in this field, and recruited many thousands of trainees. Evidence from the Awarding Body for the Built Environment (ABBE), responsible for these diplomas, shows that completion rates for candidates at PP+ were very low indeed, contrary to the normal expectations for such vocational courses.<\/p>\n
At the time of the company going into administration, there were approximately 2,400 trainees who had not completed their training. Most of these had paid for training by way of either a finance agreement promoted strongly by PP+ or by credit card. They are now making claims under Section 75 of the Consumer Credit Act 1974 which makes the provider of finance jointly liable for supply of the service paid for. These claims concern breach of contract \u2013 training has not been offered on the due dates since the company went into administration \u2013 and misrepresentation. Given the low completion rates, it is entirely possible that many more trainees may have a claim against your banks, perhaps as many as 8,000.<\/p>\n
In the matter of breach of contract, arrangements have been made with Stroma Accreditation to provide replacement training. However, there are grave doubts as to whether this training can be considered to be comparable and to meet fully with the terms of the contract signed by trainees with PP+. Furthermore, it must be questioned whether the breach can be remedied at such a late date. Already there has been an interruption of more than 4 months in the training programme and this seems set to increase further. Only two weeks ago, it emerged that Stroma were only in contact with 1,000 of the 2,400 trainees. At this rate, it will take many more months to organise replacement training. Does this not render the banks potentially liable to compensate this breach of contract in respect of loss of earnings as well as of the service itself? It seems to me that the banks have every interest in resolving this matter more expeditiously than they have so far shown any willingness to do.<\/p>\n
Similar cases have arisen in respect of other training companies (driving instructors, IT) that have failed. In almost all cases, the Financial Ombudsman has ruled in favour of the customer and it is hard to see why the banks wish to incur the considerable administrative costs of defending thousands of such actions when these are clearly going to be found for the trainees.<\/p>\n
If breach of contract might possibly be mitigated by the replacement training offered through Stroma, that does not constitute any defence against misrepresentation. There is already ample evidence of PP+ having been guilty of misrepresentation and I have no doubt that further evidence will emerge as investigations by the Administrator and by The Insolvency Service continue. I can not enlarge upon investigations as this might prejudice future legal action. Misrepresentation was present: in PP+ advertising; in the way which it assessed candidates before admission; in claims made during interview; in claims made during telephone sales calls; and during the training period.<\/p>\n
Advertisements made extravagant claims about the annual earnings that qualified home inspectors and energy assessors might expect. These claims were the subject of complaints made to the Advertising Standards Authority (ASA) and agreement was reached with PP+ that these claims would no longer be made. Some of the trainees who are currently claiming under s75 will have been recruited to PP+ before this amendment to the advertisement was made.<\/p>\n
Advertisements made claims that the training centres were \u201cgovernment-backed\u201d. This was entirely untrue. Such training is entirely unregulated by Government nor is it supported by Government in any way. Complaints to the ASA and to Dept of Communities and Local Government led to this claim also being dropped from advertisements but many of the current trainees will have been recruited on the basis of this false claim.<\/p>\n
Subsequent advertisements implied Government approbation by stating that ABBE is Government- backed. Although ABBE answers, to some limited extent, to Ofqual (formerly QCA), a Government Agency, the claim that ABBE is Government-backed is also false. ABBE is an independent body wholly owned by the Birmingham City University.<\/p>\n
Advertisements also claimed that subsidies were available to trainees. This claim was also totally false but I will address it later under the claims made during interview.<\/p>\n
Advertisements claimed that there was a shortage of Home Inspectors and Energy Assessors. The Government\u2019s legislative impact assessment clearly sets out the numbers of each that might be required to fulfil the requirements of the Energy Performance of Buildings Directive 2002 (EPBD)and the Home Information Pack (HIP). These numbers had already been exceeded (by late 2007 in the case of Domestic Energy Assessors<\/a>, by mid 2008 in the case of Non-Domestic Energy Assessors) when most of these advertisements appeared. Numbers qualified were well-known and would certainly have been known by PP+. Other training centres were open and honest with candidates about the saturated market and were only training, by this time, trainees who had specific work opportunities e.g. Housing Association staff, estate agents. Others had closed down their training operations. There has been no specific requirement for Home Inspectors since the Government made the Home Condition Report (HCR) an optional rather than a mandatory component of the HIP. I shall return to that below.<\/p>\n Advertisements also claimed that training could be fitted around existing work commitments. This would be extremely hard to do. Seven modules (each of one week\u2019s duration) had to be studied full-time at the centres in addition to a lot of home study. It is difficult to see how most trainees could achieve this within one year as they were required to do to meet the terms of the HHH \u201csubsidy\u201d agreement, to avoid supplementary course fees, and to earn money from which to repay loans.<\/p>\n As the number of potential trainees started to decline, PP+ issued new advertisements. These invited candidates to train to become \u201c5-star Property Professionals\u201d including courses in Fire Risk Assessment and Flood Risk Assessment. But courses were not available at that time and indeed there is no recognised qualification yet in respect of Flood Risk Assessment that trainees could have achieved via PP+. ABBE do not expect to launch this qualification until 2011.<\/p>\n It is a national requirement that candidates for vocational training should be assessed for suitability: i.e. that they will be able to complete the course and enter the occupation concerned. The ABBE guidance to assessment centres (available on the ABBE website) states:<\/p>\n \u201cCentres should ensure that they recruit candidates to the DipHI qualification with integrity. Centres must assess each applicant\u2019s potential and make a professional judgment about their ability to successfully complete the programme of study, where applicable, and achieve the qualification\u201d.<\/em><\/p><\/blockquote>\n This requirement was very openly flouted by PP+. The so-called assessment consisted of a multiple choice examination of twenty questions, almost none of which bore any relevance to the qualification and which were approximately at the level of a SATS test for 11 year old children. To put this in context, DipHI is a Level 4 qualification, i.e. equivalent to a Bachelor\u2019s degree. Many trainees were misled: By gaining good marks (allegedly) in the \u201cassessment\u201d, they believed that they were suitable candidates for training. But in fact they did not have the necessary academic skills or background (e.g. IT literacy) to have any chance of success. This is reflected in the lamentable completion rates at PP+ centres, far below that of other centres.<\/p>\n