Lender reference:

Contents

• Summary
• Customer criticisms
• Official criticisms and pledges
• Sustained press criticism
• Miscellaneous
• Customer relations history

Summary
When you examine its record over the last few years, this high street lender emerges as being spectacularly hard-faced. It is quick to damage customers when it falls into dispute with them and is slow to back off or repair damage it has caused them. This is true even in the face of public, press, legal and official criticism. This is a lender that will risk public disapproval rather than pay compensation or lose money. One of the most amazing examples of this is its refusal to compensate ageing customers who lost out over its Home Income Plan equity release scheme. The fight it put up - even after losing in court - reveals this lender's attitude to customers.

More often, examples of this attitude can be seen by the number of times customers and the press have criticised this lender for imposing unpublicised charges or not telling customers of changes that would benefit them.

Customers should also be careful of this lender because it operates mortgages on behalf of other high street lenders - making it easy for people to become involved with this lender without realising that they are dealing with a lender that, in our opinion, has an abysmal record.

Customer criticism
To our knowledge, customers have criticised this lender for its reluctance to see what to them has been obvious mis-selling of mortgage-related finance. It also has a reputation for being particularly aggressive if customers dispute anything it has done and has an aggressive approach to customers that miss a mortgage payment.

The public has criticised it for being inflexible in deciding what it will include as income when potential customers try to work out how much they can afford. We know of customers that have moved to other lenders rather than tolerate this lender's inflexibility on rates and payments.

Customers have criticised this lender for not telling them of changes that cost them more money than they needed to pay.

Its savings account customers have been particularly irritated by the way it holds on to their money for so long after they pay it into an account before making it available to them.

The Building Societies Ombudsman has also backed customer complaints that this lender refuses to be accountable.

Official criticism
We know of no occasions when this lender has been singled out for criticism by the authorities, such as the Office of Fair Trading, although the Investors Compensation Scheme is reported to have served writs on it and fought with it over its refusal to repay customers who lost out over its equity release scheme.

Press criticism
The press has frequently criticised this lender for mistreating its customers. It has also pointed out that this lender rakes the maximum amount of interest it can from customers by carefully timing when it considers the customer to have made a mortgage repayment. Similarly, the press has accused it of not telling savings account customers when it is offering better rates in different accounts.

Miscellaneous
Advertising experts have said that its advertising has been misleading. This lender has also withdrawn from a body that handles certain types of complaint.

Customer Relations History

1998 September
Press criticises lender's "miserly" interest rates on children's accounts

Lender reports new lower interest rates, but imposes a £299 pound "reservation" charge for both capped and fixed mortgages.

Customer complains of lack of free-phone access to lender's telephone banking service and even its 'Helpline', making dealing with them a costly undertaking.

1998 August
Single mother criticises lender for not recognising maintenance payments as income, making it impossible for her to raise mortgage in her own name.

Press cites lender for charging its £299 arrangement fee in a piece on "mortgage rip-offs"

1998 July
Press criticises lender as offering the worst interest rates for high street instant-access savings accounts.

1998 June
Press points out that lender offers lower rates on fixed mortgage loans to wealthy homebuyers.
Couple moves their mortgage from lender to another lender because of its restrictions on variable rates and lower repayments.
Lender spokesman claims that lender is responding to price-pressure by homeowners by locking them into five-year fixed rates .

1998 April
Press criticism on unnecessary repayment fees. Lender charges interest for entire month even if customer has repaid loan earlier on.

Survey shows that lender has purposely kept customers ignorant of higher interest paying accounts.

Lender criticised by press for deciding not to offer home loan advice to potential borrowers, thus saving the bank expenses.

1998 January
Press accused this lender's former chief executive of being a 'building society fat cat'. He was granted the right to buy 430,000 shares at a profit margin of £5.10 each.

Building Societies Ombudsman council criticises lender for declining to remain accountable to sort out complaints arising from conversion.

1997 November
Leading advertising expert names lender advert as 'Bad Ad' of the week, calls it confusing and an insulting piece of work.

1997 September
Press reports on campaign to stop lenders from chasing borrowers years after repossession and sale of homes. Mr. Ronald Severn, who heads the campaign, wants to 'put pressure on all the lenders of this world'.

1998 August
Court agrees with borrower that this lender is being too quick to repossess. Customer wins legal battle and the lender's repossession order is rejected.

Lender increases costs of fixed rate mortgages; fears of repossessions increase for borrowers.

Lender pulls out of Building Society Ombudsman Scheme after only 12 months (compared to the 18 months for other lenders), making it impossible for borrowers to file conversion complaints.

Postal account savings customer complains about cumbersome administration system, which could have lost him up to £360 in interest payments.

1997 July
Lender customers forced to wait up to eight days to get at their own cash after paying in cheques, while this lender profits on their interest.

1997 June
Lender refunds £66,000 to customer after a five-year struggle. Comes as press criticises lenders for hidden fines listed as 'additional interest' that press claim overcharge borrowers by millions of pounds.

1997 January
Building society ombudsman reports it has received 604 complaints from this lender's customers.

1996 December
Press criticises lender for abandoning promise to keep rates below the ones charged by the UK's five biggest lenders.

1996 November
Lender criticised in press for refusing to lend to freehold flat owners.

Lender accused in press of encouraging borrowers to over-extend themselves. Fear grows that negative equity history will repeat itself.

Press reports that lender charges its customers £20 for paying in cheques that bounce, making them pay for other people's problems.

1996 October
Press points out that the death of a borrower does not stop this lender from charging early redemption penalty.

Angry customer closes accounts with lender after it imposes £20 fine for other people's cheques submitted by the customer and which then bounced. Press accuses lender of not telling customers of new charge which went into effect 3 October. Lender also surprises some borrowers by charging £20 for mortgage payments that came in one day late.
20 customers bring claims against this lender over its equity release scheme.

1996 September
Press accuses lender of racing after mortgage debts when house prices are higher, even doing so for small debts.

1996 August
Lender finally offers refund after customer was fooled by contract small print.

Building Society ombudsman reports 981 complaints dealing with issues arising from lender's conversion to a bank.

1996 July
Customer irritated over lender's not crediting extra monies in mortgagee's account until the end of the year.

1996 June
Lender finally agrees to pay out £7.5m to investors who lost out in its mortgage equity release schemes.

Press reports lender will pay £14m (£7.5m to investors, £7m to Investors Compensation Scheme) over failed mortgage equity release schemes.

1995 December
Lender mentioned for refusing to check customers' accounts for mistakes. Customers complain about difference in interest rates quoted and the rates this lender actually applied, as well as overcharging 'mistakes'.

Customer claims the lender advertised an incorrect APR and 'defrauded' him by charging interest on debt that he had repaid.

Lender refuses to settle with aged customers who lost out over its mortgage equity release scheme despite losing in court. Goes to Court of Appeal over the affair.

Press criticises lender for unpublicised charge of £20 if their mortgage repayments are even one day late.

Court gives one of this lender's customers the right to repay substantial arrears over the life of loan rather than in the four years this lender demanded.

Survey uncovers massive inefficiencies and errors in account handling with most lenders and this lender refuses to check accounts because 'it is not cost effective for us to do so.'

1995 November
Press says that lender insists on picking valuer, denying house-buyers the right to do so.

Lender charges £25 fee for early repayments of loans if the repayment is less than £1,000.

Press criticise this lender for charging borrowers it has taken over from another building society their old interest rate of 9.1% instead of the 7.73% it charges its own borrowers.

1995 September
Investors Compensation Scheme invites investors to join in legal action against lender over failed Home Income Plan (HIP) equity release schemes.

1995 July
Press accuses lender of mailing wrong information to as many as 500 of its customers, telling them of bonus eligibility when it merges with another lender.

1995 August
Survey shows that lender charges 12 months' interest as a penalty on customers who pay off their mortgages early - a much higher fee than its competitors.

1995 June
Citizens Advice Bureau accuse lender of being 'inflexible' and 'more likely to send threatening letters quickly'. It is also mentioned that the lender hires expensive legal council and adds those costs to the borrower's debt.

1994 November
Press announces that ICS has issued writs against lender in High Court, claiming for losses and damages resulting from its Home Improvement Plan (HIP) equity release schemes.

1994 October
Lender criticised by victims of Home Improvement Plan (HIP) equity release schemes, as well as their lawyers and several MPs, for luring investors into taking up loans.

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