Lender reference:

Contents

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

Summary

Customer criticism
There is a distinct pattern to customers' criticise of this lender: they say it is quick to impose extra charges and slow to repay customers when it makes a mistake. Evidence of this is visible in the customer relations history below.

The lender has also been criticised for forcing homebuyers to take out the notorious Mortgage Indemnity Guarantees and for charging too much for them.

Misleading customers about the amount they will actually pay is another theme with this lender.

The cases we have seen suggest that this lender and, in particular, its specialist mortgage subsidiary, treat customers who fall into financial difficulties harshly - even if those difficulties are short term.

Official criticism
This lenders' treatment of customers helped encourage the Office of Fair Trading to warn lenders to treat customers better.

Press criticism
There is no shortage of press criticism of this lender, most of it reflecting the concerns of its customers detailed above.

Miscellaneous
None so far as we are aware

Customer Relations History

1998 October
The Consumers Association says this lender does not follow the mortgage code, introduced by the Council of Mortgage lenders to protect mortgage customers. The lender does not tell customers about the code or explain its significance to them. The Consumers Association sent in "undercover" researchers who posed as customers to see how bad this lender's advice was.

1998 September
Lender's specialist mortgage subsidiary (which does loans for the self-employed etc) is accused of overcharging customers and not telling them that cheaper options are available.

Insurance company accuses lender of making huge commissions at the expense of homeowners by bundling together insurance cover with mortgages at a time when the borrower is a "captive customer".

New savings account holder says lender failed for over four-month period to give them a PIN number for the account.

Lender accused of gaining excess interest payments from borrowers by annual interest calculations rather than on the fairer, daily basis. It is noted that the lender, who claims difficulties in changing the system, has a subsidiary company that already charges interest on a monthly basis.

1998 August
Father of son who died of flu virus was forced to pay the lender's specialist mortgage subsidiary a £5,000 redemption fee to clear his dead son's mortgage. The outstanding loan was covered by a life insurance that paid out when the boy died.

Press criticises lender for increasing prices for first-time buyers who it requires to take out a Mortgage Indemnity Guarantee. The MIG is widely seen as having no benefit to borrowers.

1998 July
Mortgage broker advises borrowers that the lender cannot be relied upon to waive redemption fees if borrowers become critically ill or die - even though the lender claims it would. Insurance could be increased to incorporate redemption penalty.

Halifax Building Society accuses lender of issuing misleading and inaccurate public statements.

1998 June
Building Society Ombudsman accuses the lender of confusing customers with complex cut-price mortgage offers, including its insurance and mortgage redemption penalties.

IFA says the lender as a big disappointment because it charges some of the highest premiums in the high street for life insurance policies.

1998 April
Press critical of the lender for charging interest at the end of each month even if mortgage is redeemed at the beginning of the month and leaving homebuyers, moving homes, stung with two lots of interest payments; a full month on their old mortgage and interest on their new one.

1998 March
It takes press intervention to force this lender to refund £26,500 to a borrower after an investigation into the lender's overcharging on borrower's mortgage arrears. Independent auditor MortgagecheK discover that the lender had been charging 14% on arrears in spite of a CML and Office of Fair Trading warning that these penalty interest rates could be held unfair in court. The lender only offered £7,500 (50% of the total penalty interest) to the borrower at first but decided to refund the full amount plus compensation after the press intervened.

1998 January
Mortgage brokers, critical of the lender's mortgage indemnity policies, claim they are a sting in the tail for first-time buyers and say that they should be abolished.

Press criticises lender after Financial Mail survey shows that its mortgage indemnity premiums have risen dramatically. Mortgages advisors believe they should fall. The lender is also criticised for failing to give rebates on its MIGs even if the borrower moved within a year - despite having paid for a 25-year plan and being faced with a further MIG on a new loan.

1997 November
Lender criticised for imposing heavy surcharges and multiple legal charges on a borrower with mortgage arrears that led to initial loan of £70,000 becoming a debt of £198,000 after seven years, despite the borrower making repayments at irregular intervals totalling £73,000.

1997 October
Press critical of lender's fees for initiating a mortgage. Fees can cost borrower several hundred pounds.

1997 August
Press sees lender's MIG charges as an unpleasant surprise for homebuyers and considers its charge too high.

1997 July
Borrowers criticise lender for denying them a further loan on intended home move, citing previous difficulties in meeting financial commitments due to illness. Borrower had subsequently repaid all the arrears but, some four years later, was denied a new loan. However the lender still charged the borrower £2,500 on early redemption of mortgage when a new lender was found.

Press criticises the lender for charging more interest on homeowners who want to remortgage than it does for borrowers moving home. The lender claims that it does this because "remortgage customers do not contribute to the house market recovery". Bizarre.

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