Alliance & Leicester "administration" (!?!) charges

lisyloo

I am not claiming these to be fantastic works, but if anyone wants to nick them, either entirely or pieces then please use them

Letter 1

I am writing to complain about the £295 mortgage account closure fee that Alliance & Leicester is planning to apply to my account.
I am fully prepared to pay a fee that reflects the genuine costs incurred by the bank in closing my account. But as £295 is three times the amount charged by many of your rivals, and is £100 greater than the maximum typical fee quoted by your regulator the Financial Services Authority, I do not wish to pay it.
This letter is a complaint about the scale of the fee, its recent and unexplained increase from £195 to £295 in August 2004, and about the fact that this increase was neverexplicitly communicated to me. A&L has to abide by FSA regulations which stipulate that charges of this sort must be fair and not excessive. I believe that the scale of the £295 fee, plus the fact that the latest increase was not explained or properly communicated, means that A&L is in breach of both these requirements. I request that you reduce my fee to the sum originally stated when I took my mortgage out in September 2003.
If A&L is not prepared to consider reducing my fee, as requested, please send a deadlock letter at once so that I can pursue my complaint through the Financial Ombudsman Service.

Letter 2 - Note that this is in reply to specific points, and ome of the figures may now be out of date

Many thanks for your prompt reply to my complaint however I remain dissatisfied for the following reasons.

1) The tasks you list are mainly menial or can be done by computer. For example putting deeds into an envelope is an unskilled task and should not take more than a few minutes. The listed tasks do not justify the high charge given the unskilled nature of the work.

2) I believe that all of these tasks were necessary before the increase and you have not justified the massive increase at a time when wage inflation is in the range of 3% - 4% and the Bank Of England’s measure of general inflation is 1.9%.

Please provide me with your final response in order that I may pursue this with the ombudsman.

Letter 3

Many thanks for your prompt reply to our complaint and your offer, however we remain dissatisfied for the following reasons.

The charge proposed is still considerably higher than the charge in place when we took out our mortgage in 2003. We understand that inflationary increases are necessary and also increases could become necessary if there are is any additional workload for. However we consider this considerable increase without reason to be unfair. We have still not received any explanation as to why there has been a considerable increase at a time when wage inflation and general inflation are both in very low single figure. The work involved has not increased and if anything should have decreased slightly with the advent of email and digitally held land registry records.
We cannot accept that the tasks that you have listed amount to more than 1 or 2 hours of unskilled work and we do not see how this can justify a charge of £195 which is one of the highest in the industry.

Please provide us with your final response in order that we may pursue this with the ombudsman.

MarkyMarkD

pdm wrote:

So no more replies about "it was in your annual mortgage statement". You're just flooding the thread with non-productive comments and slowing down an already loaded server.

pdm, don't be so rude. I've been here a lot longer than you, and I've been

Thanked 165 Times in 147 Posts

which is approximately 165 times more than you! Lisy is also a hugely valuable member of the forums and to call her posts "mindless" is completely out of order.

It's a public forum and people will comment as they see fit. I was in fact responding directly to rik's comment that he hadn't been told about the charge - which is not true, as it's in each customer's annual mortgage statement. There is also NO requirement on banks, under the banking code, to notify customers every time they alter every possible charge on an account.

pdm_2

Didn't see it as rude.

Appologies if anyone did get offended.

Chat forums are about helping others and I was pointing out that if people have any advice about helping someone out then it's great if they want to share it. If not then it's up to them. To merely tell me what I already knew was not that helpful in my opinion.

If someone offends me I don't tell them how to get out of an awkward situation - it's as simple as that.

Thankyou for all the people who put helpful responses in. For other postings I stick to my original response about the thread jamming.

pdm_2

On top of that you'll see that I thanked lisyloo for the positive feedback...

Ian_W

Read this thread with interest as I was in the process of redeeming my mortgage with Coventry BS.

Having received a redemption statement showing a "redemption adminstration fee" of £195 - I duly sent off a cheque for the full amount. They took an age and never even acknowledged receipt of a cheque for £60k, just sent the deeds 5 weeks later without an explanation of the charges levied. When I took out the mortgage in 2003 the fees for closure were shown as £55 sealing & £40 deeds release fees.

To cut a long story short I complained about their service and that I had not be notified of the increase which was unjustified in terms of costs incured by them to redeem the mortgage. Their initial response was that their charge was less than others and that they had posted the changes in their offices, though not notified individuals. :mad: Following a further letter from me, based loosely on lisyloo's above [many thanks :beer: ], requesting a deadlock letter I have to-day received a £100 refund so the charges are now as originally quoted. :j

I do understand that BS's and Banks incur costs when a mortgage is redeemed or moved to another lender and I can even understand the need, during the term of the mortgage, to put them up to meet increased costs. What I find unacceptable is that, following A&L's lead, even mutual lenders [Coventry's mantra is "TLC not PLC"!!] feel the need to increase them by 100%+ in 2yrs without even the courtesy of informing affected customers [bank charge increases have to be notified under the banking code, don't they?].

Moral of the story to MSE forum users, if you get stung by lenders when you switch or close your mortgage for charges that have increased disproportiatley since you took it out, particularly if you weren't informed of the increase - COMPLAIN. If you use lisyloo's letters as a template most will back down because they know they're out of order.

donnalove

we've just transfered our mortgage it all went through yesterday we were with A&l and on redemtion letter it stated £295 admin charge is it to late to contest this.

Ian_W

No, donna. I contested mine after everything had gone through. Point is that the charge changed by a huge amount during the time you held the mortgage and you weren't informed of the change. Use lisyloo's letters above as a template but it's helpful if you got the original paperwork to quote the redemption charges you were notified would apply.
BoL.

prattmmc

Have taken similar action with the Coventry recently as £125 redemption fee was increased to £195 in less than 1 year. Sent Coventry a letter along the lines of "this is extortionate ", "wage inflation", "no notification of increase".
4 days later received a nice letter and gesture of goodwill cheque for £55. (Not bad considering I no longer have mortgage with them)


Pleasantly surprised with result and thanks to all those above (this post) for their advice.

MSE strikes again

Congers

Hi,

I have read this thread with interest as I have just completed a remortgage from the A&L to Abbey. When I took out the two year fixed with the A&L in September 2003, the redemption charge was quoted as £85, and I'm just as annoyed with this increase to £295 as many others. I duly sent off my letter, written along the lines as detailed on this thread and from a link via the Thisismoney website, and have received my first reply.

No prizes for guessing that they have refused to budge on the issue of a reduction back to the amount quoted in Sept 03.

The last line of the letter reads as follows; " In the circumstances, I regret that I cannot agree to now reduce or waive the Redemption Administration Charge and hope that I have been able to clarify why this charge is in place."

Does this ending resemble others that have been received? Does it still leave hope for a further letter of complaint, like the one detailed in the thread earlier? Or should I see this as a 'deadlock' letter?

Any advice would be appreciated. Thanks.

Webbie_2

I may have joined this thread a little late, but A&L also tried to charge us a £295 admin fee. Fortunately we had all the original paperwork which broke down the cost. A&L agreed to wavier the fee in the end.