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Early Redemption charges


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Well it's good news today about the Bank Charges although I have already claimed mine back from Llyods TSB twice I am certain they still owe me more.

What I am now interested in is whether a not a fight is to start against the Mortgage companies for Early Redemption charges. It surely cannot be lawful for them to be charging some astronomical amounts.

I suffered a charge of over £7k because I changed my mortgage product with Accord Mortgages. Can this really be a true reflections of the cost to them when they have increased my mortgage term to 24 years from 19 years. i

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Hi Varda

 

At present there is nothing in the pipeline for ERC and the amount they charge. The reason many cases for ERC either failed or were stopped by the claimant is that some Judges and mortgage Co's said it could not be classed as a penalty as it was a charge for you (the mortgage holder) exercising your right to change product / co.

 

I had a very long and winded fight with Swift but did not claim my ERC for that reason.

 

Of course it all hinges on when you redeem your product. If you were only a few months from coming out of your contracted time (3 years for example) then there can be a claim that the Co would not have lost x amount of pounds and so the ERC should have been reduced. There have been some winners on this argument.

 

I totally agree with the argument that we are charged far more for an ERC than the Co would stand to lose from us moving our business. It takes approx 6 weeks for a mortgage to replace the lost business....so most anyone should pay in 6 weeks as by this time they have already had another product sold. The hard part of this is evidencing the fact....and I doubt any mortgage Co will show enough records to prove this either way.

 

Keep on with any penalty charges..were you charged arrears fees with the mortgage Co? If so I recommend you go after them!

 

Hope this helps

All advice is based on my experiences. I am NOT qualified and as such cannot be held responsible for any mistakes. If in doubt...get professional help.

If you like what i have said then make me a star!!

Some helpful links

I have been successful in many cases..here are links to some

Housing Act and deposits: http://www.consumeractiongroup.co.uk/forum/showthread.php?266260-Deposit-being-withheld.-Please-advise&highlight=

Against Natwest: http://www.consumeractiongroup.co.uk/forum/showthread.php?278646-N-west-v-Mrsfoot-s-Son.-***WON_ALL-CHARGES-REFUNDED***&highlight=

Against Swift Advances: http://www.consumeractiongroup.co.uk/forum/showthread.php?46576-Me-V-Swift&highlight=

Against B&Q: http://www.consumeractiongroup.co.uk/forum/showthread.php?172878-Me-vs-B-amp-Q&highlight=

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  • 4 months later...
At present there is nothing in the pipeline for ERC and the amount they charge. The reason many cases for ERC either failed or were stopped by the claimant is that some Judges and mortgage Co's said it could not be classed as a penalty as it was a charge for you (the mortgage holder) exercising your right to change product / co.

 

But then IMHO it is a penalty for leaving early nothing more nothing less why should you haver to pay for getting a better deal, surely this is (a) an issue under the unfair terms and (b) an extortiante credit bargain

Lloyds TSB (SARS) request sent 9th June 2006

£2191 Moneyclaim Issued 11/08/2006, Acknowleded 17th August Defence 14 Sep, AQ returned 5/10/2006.SETTLED IN FULL £2,670 26/11/2006/ Lloyds Credit Card SETTLED IN FULL £267

MBNA SETTLED IN FULL 15/09/2006 £829

Citicard (SARS) request sent 22nd June 2006 Moneyclaim issued 19th Sep, Defence and AQ received 5/10/2006, AQ returned 5/10/2006, part refund received 10/10/2006

GE MONEY SETTLLED IN FULL £400

Barclaycard Me and Mrs SARS sent 19/10/2006 settled £350

Welcome Finance PPI 2 accounts one settled £1018 waiting on other

GE Money PPI 1 account settled 8/5/2008 £560 2nd account SETTLED IN FULL £3,599.78p 15thAugust 2008

Lloyds TSB PPI CC complaint sent 10/04/2008

Black Horse PPI with FOS 20/05/2008

HFC PPI complaint sent 22/05/2008

 

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What makes matters worse is when you are merely chaging products and staying with the same company. 1st I changed to interest only to reduce my monthly payments that had increased from £880 pm to £1380 pm. I then changed products and got charged £7300 ERC surely this does not reflect Accords losses. I had to take out a bigger mortgage for a longer period of time.

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