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Summary
This high street lender has attracted criticism for hiding the real costs of its packages by offering low interest rates but selling unnecessary and expensive insurance to its mortgage customers. Press analysis has shown that it can make several thousand pounds of extra profit out of a normal mortgage in this way - with most customers being none the wiser.
We have come across cases where this lender has acted wrongly and damaged its customers' legally and financially yet still insisted that its customers owe it money. It is extremely unwilling to back down when in dispute with customers and presses customers to pay its "costs".
It is also unwilling to explain itself to customers with whom it falls into dispute.
Its techniques for selling insurance on the back of mortgages has attracted press criticism and is known to have caused concern within the Government.
In our view, there are other high street lenders who cost their customers less and treat them better.
Customer criticism
Customers usually criticise this lender for being inflexible, for not backing down where it is clearly in the wrong. Sadly, many of its customers do not realise that the way it sells insurance means they think they have a cheaper mortgage than they really have.
Some customers have criticised this lender for its refusal to divulge information that might help customers resolve disputes with the lender - again, even when the lender has admitted it was initially in the wrong.
We have also heard that this lender is known among debt counsellors for being one with which it is particularly difficult to negotiate.
Official criticism
We know of no occasions when this lender has been singled out for criticism by the authorities, although its practice of offering customers lower interest rate on condition that they buy insurance that actually costs them more has caused concern within the Government.
Press criticism
The press has often criticised this lender for offering lower rate mortgages that actually cost customers more over the length of the mortgage because they include insurance premiums.
Miscellaneous
None to our knowledge
1998 September
Insurance arm refuses to reveal "standard rates", making its claim that it charges "no excesses" impossible to verify
Admits 40% of customers have its unemployment insurance policy, despite criticism of these policies. Charges £6.50 per month, while competitors charge £5.06 and £5.98
Criticised for making customers wait seven days before being able to withdraw cash on cheques
Advertising Standards Authority criticises it for claiming in adverts that its savings rates were best when it couldn't prove they were
1998 August
Press cite it for imposing two-year "overhand" that locks borrowers into capped mortgage rates if rates fall
Press point out that its new mortgage forces customers to buy two of its insurance policies and pay 4% of repaid capital plus £195 if they redeem early
1998 July
Redemption premium criticised as "steep"
Press point out it charges 50% more than the amount approved by the Building Societies Ombudsman for customers who redeem mortgages early
Lawyer criticises its practice of offering customers cheaper conveyancing if they use approved solicitors as "not in the long-term interest of customers"
Criticised for adding up to 0.25% to mortgage rates on customers who refuse to take out its mortgage protection insurance
1998 June
MPs and consumer groups for limiting its IFAs to recommending just one provider for certain products
Criticised for 62-month fixed rate loan that holds borrowers for seven years.
Triggers independent financial adviser (IFA) criticism by calling for more multi-tied IFAs
1998 May
Press points out that if it converted from a mutual and paid £1,000 borrowers would be better off
Criticised for offering loyal borrowers "preferential rate" of 8.25% after only 2 years - press says this "only gives homeowners a paltry 0.2% discount off standard rates."
criticised for making borrowers buy insurance
David Davis, chairman of the public accounts committee, names this lender for not telling savers of its best deals
1998 April
Chief executive receives a £100,200 or 25% of his salary as a "mutuality bonus"
1998 March
Admits not telling savers of its own accounts offering better rates
Plans to introduce rules to keep troublesome shareholders quiet
Named as one of three lenders who overcharged customers that fell into arrears (repaid £26,000)
1998 February
Press criticism for giving customer misleading information about remortgaging
Press criticism for mortgage indemnity guarantee charges
1998 January
Named in a critical press article on mortgage redemption fees
Loses case brought by mortgage customer who claimed it mis-sold mortgage-related products
1997 December
Press criticism for expensive accident, sickness and unemployment insurance and expensive mortgage indemnity guarantee insurance
1997 November
Branch manager dismissed after stealing tens of thousands of pounds from customers for years
1997 October
Press cite the lender for failing to meet Consumer Panel chairman's standards on independent financial advice (best buy practices)
1997 September
Press name this as a lender that secretly lets customers have better rates if they threaten to move to different lenders
1997 September
Press criticism for paying low rates to savers
1997 July
Press and broker criticism for using too few comparisons in its independent financial advice "best-buy" panels
Mortgage customer pickets the lender after it refuses to take the blame for choosing surveyors who fail to notice subsidence to their property
Press criticism for making customers wait seven days before they can access cash paid in to accounts by cheque
1997 June
Lender's spokesman says giving customers secret sweeteners to keep their business is common practice
Lawyers criticise the lender's mortgage penalty terms as being unfair contract terms
Press reports that broker criticism forces it to "review" plans for partnerships with IFAs
Press and insurance company criticism for charging mortgage customers high insurance fees
1997 May Customer criticises the lender for not resolving disputes over its high interest savings scheme
1997 January
This lender included in a broker comparison showing lender's mortgage indemnity
1996 July
Faces £39,000 damages claim for allegedly mis-selling life insurance
1995 December
Claims it will review its practice of waiting a year before crediting customer interest payments. (Not known to have changed its system though)
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