Early Repayment Charges - Northern Rock

[fredsdebt]

Hi, I noticed this thread a few weeks ago.

 

I have looked around on the CAG site and have done searches on the Internet but have only found reference to what Northern Rock have done but no advice whatsoever on how to tackle this?

 

I have been arguing with Northern Rock over the points highlighted above. I have also sent an SAR request and have the papers etc.. back from Northern Rock. On the face of it looks like I havent got much of a case to argue to get back the Early Redemption Penalty (ERC) and Northern Rock have basically said just that to me.

 

I am now looking to put my case to the Financial Ombudsman Service (FOS) as I have now had letters from Northern Rock advising their reply to my complaint is their final response. So I either give up and move on or my next logical step is to try the FOS.

 

Anybody else in a similar position?

 

Anyone got anywhere with Northern Rock on their ERC?

 

Thanks,

[fredsdebt]

Below are a couple of interesting links to articles on the Internet relating to Northern Rock Early Redemption Fees (or Northern Rock Early Redemption Charges or Northern Rock Early redemption Penalties - hope refering to these will pick up any one else searching CAG for info).

 

Take a look at these:

 

http://news.bbc.co.uk/1/shared/spl/hi/programmes/money_box/transcripts/money_box_17_july_10.pdf

 

http://www.bbc.co.uk/news/uk-10650290

 

http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=509750&in_page_id=8

 

http://www.thisismoney.co.uk/mortgages-and-homes/tips-and-guides/article.html?in_advicepage_id=96&in_article_id=496043&in_page_id=53957

Edited September 26, 2010 by fredsdebt

[fredsdebt]

Just noticed an old CAG thread going back to 2006 - well before Northern Rock problems but the thread has an interesting couple of posts including an interesting letter with references to legal case that may be useful.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?51672

[fredsdebt]

Thread here on 'www.thisismoney.co.uk' gives you a few lines on how to complain:

 

http://www.thisismoney.co.uk/complain

 

Here is the what (basically) the above link has to say;

 

"In the so-called good old days, a consumer who felt they had been treated unfairly by a financial institution such as a bank or building society, basically had to lump it.

 

But the fairly recent introduction of the Financial Services Authority (FSA), the Financial Ombudsman and a whole host of regulatory bodies, has meant that today's consumer has some clout.

How to complain

1. Your first port of call with any complaint in the financial services industry should always be the company itself. You should send your complaint in writing or alternatively make a complaint in person or over the phone.

Do remember though to keep a record of the date and time of the complaint as well as the name of the person you spoke to. You should then give the company a reasonable amount of time, typically 14 days, to respond.

2. When you are sure you have exhausted all avenues with the company, which includes a warning that you are about the take the complaint further, then you can go to the Financial Ombudsman. This handles all major banking, building society, insurance, pensions, mortgages and investment complaints.

The ombudsman will access whether you have any grounds for a complaint and if it does will request an explanation from the company. If it finds in the complainant's favour, it will expect the organisation to provide a suitable remedy.

 

This could mean anything from putting right what went wrong and providing financial compensation, to a simple apology. The good news though that this assistance is both independent and free of charge.

 

3. The Ombudsman decision is usually final, but if you disagree with it then you can complain to the Ombudsman's indepedent assessor. Details of this can be found on the Ombudsman's website.

 

The decision

 

Bear in mind that with some ombudsman schemes the decision is legally binding but with others it is not. Some schemes also impose financial limits so if your problem exceeds this, your only recourse may be to go through the courts.

Useful contacts

Financial Ombudsman

http://www.financial-ombudsman.org.uk

0845 080 1800

All major banking, building society, insurance, pensions, mortgages and investment Ombudsmen have now been pulled together under this umbrella which deals with all personal finance issue."

[fredsdebt]

Here is a link to the Financial Ombudsman Service Complaints - 'How to Complain'

 

http://www.financial-ombudsman.org.uk/consumer/complaints.htm

 

The complaint form obviously has boxes for all the details the FOS require but it lacks questions and space to reply to get all the details out and onto the form. I am going to draft the details of my claim and attach to the claim form making reference to the FOS refering to the attached. I am also going to print and attatch the articles listed in my first posting here and highlight the key sentances that refer to Northern Rock treating customers unfairly.

 

The main points in my complaint to FOS are:

 

1. NR not treating customers fairly - not informing all customers about the ERC etc.. I read some customers have actually been 'let off' paying an ERC because NR couldnt lend them any more money.

 

2. My buying position has been compromised by not being able to borrow any more - NR Asset Management ("Bad Bank" part of NR not lending anymore). 'Unfair Contract Terms Act 1977" could apply?

 

3. Next property purchase (following our sale) has been delayed as we need the ERC money to get our deposit together. Now forded to Rent a property as need this ERC matter sorting out before can move on. Being 'forced' to rent basis of claim that additional costs have been incured due to the many weeks NR have taken to finally say no and confirm that to be their final response. We needed a final response to then go to FOS.

 

4. Delaying replies to our letters by sending letters to the wrong (old) address then saying my letters did not have recognised signatures on!

 

I have heard it can take an age to get any replies back from the FOS. I have another claim going through the FOS against Royal Bank of Scotland (not related to this matter with Northern Rock or even to do with Mortgages) and I sent that weeks and weeks ago with no acknowledgement yet that FOS have received it.

 

I suggest whatever anyone does send is sent Recorded Delivery - then use the Royal Mail 'Track and Trace'

 

http://track.royalmail.com/portal/rm/track;jsessionid=NE3ZAXYKQVCN0FB2IGJFGAQ?catId=22700601&emt=emt&track=track&default=default&imageRootPath=&loc=en_GB&keyname=track_home&gear=track

 

to get a proof of delivery/received signature. I have also noticed that having sent many Recorded Delivery items that many show on the Royal Mail Track and Trace as a no proof available. If you get this and havent had a reply then I would send it again.

 

Thanks,

Edited September 26, 2010 by fredsdebt

[fredsdebt]

Complaint now sent to FOS.

 

Thanks,

[La serenissima]

Hi, I noticed this thread a few weeks ago.

 

I have looked around on the CAG site and have done searches on the Internet but have only found reference to what Northern Rock have done but no advice whatsoever on how to tackle this?

 

I have been arguing with Northern Rock over the points highlighted above. I have also sent an SAR request and have the papers etc.. back from Northern Rock. On the face of it looks like I havent got much of a case to argue to get back the Early Redemption Penalty (ERC) and Northern Rock have basically said just that to me.

 

I am now looking to put my case to the Financial Ombudsman Service (FOS) as I have now had letters from Northern Rock advising their reply to my complaint is their final response. So I either give up and move on or my next logical step is to try the FOS.

 

Anybody else in a similar position?

 

Anyone got anywhere with Northern Rock on their ERC?

 

Thanks,

 

 

Yes I am in the exact same position. I filed a complaint with the FOS about the same problem who wrote to Northen Rock to investigate my complaint. Inevitably Northern Rock have 'investigated' and cannot help even though it is patently clear that they have not treated their customers fairly and made customers mortgage prisoners. One NR customer services advisor went so far as to say to me that they are working in the interests of the taxpayer...how about the customer.

 

They will not let me move my mortgage to the banking arm who have the ability to offer new products or waive my EPC's and in fact have been absolutely no help whatsoever.

 

I now have to take my complaint up with the FOS again and see if they can assist.

 

I would say don't give up, the more people who make official complaints to the FOS the better.

[fredsdebt]

Thanks for posting 'La serenissima'.

 

I have written to FOS and have had an acknowledgement / receipt letter. I have also this week had a letter saying my case has now been asigned to be further investigated. Northern Rock have been sent details of my complaint to see what they have to say to the FOS.

 

I am sticking with this one and hope I can get something in my favour. I am happy to share/compare notes (keeping personal details etc,, private) if that helps.

 

Thanks,

[La serenissima]

Thanks I think that would be a good idea and I am also happy to share notes etc.

I am going to now take the position that as some customers have been assigned to the good bank and some to the bad, they havent treated their customers equally or fairly which I am sure contravenes the unfair terms and conditions act.

 

The more persistent we are, then hopefully we may both get a satisfactory outcome.

[ukaviator]

Hi Fredsdebt

 

I have created a thread for you as you were posting in the media section.

 

An ERC is an Early Repayment Charge, and an ERC period, may be the same as the fixed or discounted term, or it may be longer. An ERC is different to an MEAF (Mortgage Exit Administration Fee) which is a charge to all of a lender's mortgage customers when they redeem their mortgage.

 

There hasn't been any FOS or legal cases, or any FSA guidance, which have said that ERCs are unlawful. They are not penalties for breach of contract. They are agreed charges in the event that a borrower chooses to redeem their mortgage during the specified ERC term which is a right the borrower has to exercise if they choose to. As long as the ERC was clearly stated up front in your mortgage offer, or similar document, it is legally binding and you have to pay it.

 

ERCs are charged because mortgage lenders incur upfront costs setting up mortgage accounts and often charge interest rates which are less than it costs them to borrow the funds. So they lose money during the fixed or discounted term unless borrowers stick it out for the full fixed or discounted term. If you leave during the ERC period, the lender would almost always lose money if the ERC was not levied. The FOS will not support an argument for an ERC claim.

 

I was succesful years ago at getting half of my ERC back, but it was a fight. Some users of the site have tried and failed with ERC refunds, one ended up with costs against them. Sorry to put a damper on your fight but my advice is to stay well away from taking things too far. By all means ask for your money back, you may get lucky, but DO NOT file a claim against Northern Rock.

[monkeyface1312]

Hi Ukaviator

I hope some of this info can help everyone regard the Northern Rock ERC

 

I have been looking through some of my old Northern Rock Mortgage documents on the ERC charges as I had a together mortgage and was charged an ERC of £18,000

 

In a document i have found dated 5th December 2001 it clearly states that if you are on a Together Mortgage with Northern Rock you can repay your loan in full or part without incuring an ERC early repayment charge.

 

It also states when you repay your loan in full, intrest will be charged up to and including the day on which the loan is repaid.

 

I dont know how to put a copy of the document I have found up on the system maybe one of the mods could help me with that so everyone can read it.

 

This might be of intrest to all those who have been charged an ERC on there already redeemed mortgages by Northern Rock or perhaps are going to remortgage away from them.

 

All those people who have been charged the ERC on Northern Rocks Together Mortgages when they were redeeemed might be able to reclaim all the ERC charges back that Northern Rock have charged to the mortgage account.

 

This document I have found today clearly states the following under the heading EARLY REPAYMENT CHARGE on Northern Rocks own statement of charges.

 

Together allows you to repay your loan in FULL or Part AT ANY TIME without incurring an early repayment charge

 

I will ask a mod to explain how to put up the document so everyone can see it clearly, I expect i need to scan it in to the system but dont know how to

[monkeyface1312]

You can see a copy of the document I have down loaded on the mortgage forum and look under the heading early repayment charge down the right hand side.

[chefyboy75]

Hi is the document above the most recent regarding the erc and all the fees? thanks