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

Ian_W

Fair enough Mark, that's why they're discussion forums. But in early April the OFT critisised CC companies for the their charges being penalties rather than comensurate with the work involved. The consumer guide to this report/decision [with which the 8 main issuers disagree says,

There is also a read across of the general principles in this work to other default charges in consumer contracts such as bank overdrafts, store cards and mortgages. We are inviting the banks and other financial services businesses to review such charges accordingly.

Only argument is whether the discharge fee is a "default charge"?
Loyalty bonus v punishment for moving?

sandydog_2

Can anyone help me on this? I took out my A&L mortgage in Oct 2002, and looking at the mortgage statement for 2003, it states the costs on the back:-

Redemption and sealing of Deeds £75
Deeds production £75

Would I have had to pay both of these when it comes to moving to another bank? Or should I just be considering the £75 when trying to get a reduction?

Incidentally, the charge for the redemption went up to £85 in Jan 2004, and Jan 2005's statement no longer has the fees on the back. Wonder why?!

iiisjw

I took out my mortgage with A&L in Feb 2003 and the same two charges were listed though my fee for Redemption and sealing of Deeds was £85.

I believe the only charge you have to pay is the £75 one for the Redemption and sealing of deeds, though this has now been renamed a redemption administration charge and the price has shot up to £295 as you probably know.

I took exception to the £295 pound fee and sent this letter

http://img.thisismoney.co.uk/misc/AllianceAndLeicester_010405.pdf

to A&L. They offered to reduce the fee to £225. I refused the offer stating that I still thought they couldn't justify this fee and asking them to reduce the fee to the original £85 or sent me a letter of deadlock which I could present to the ombudsman.

To my amazement they replied two days later reducing the fee to the original £85 as "a gesture of goodwill".

I believe the A&L have been profiteering with this exit penalty and now can't afford for even one customer to take their case to the FOS.

So keep sending the letters!

W1zz

I've just got off the phone with A&L to make initial equires about my mortgage which is about to standard rate on 30 June.

After giving me a verbal outstanding balance she went on to say that if I moved to another mortgate providor then I would incur an early redemption fee of £295. To this I replied that the fee was only £195 according to the documents I have from the time I took it out. Her reply was that in the T&C it does state that this fee isn't fixed and can change.

My question is, am I able to switch mortgages and then argue the fee afterwards. Or do all the fees have to be paid before I can transfer?

thanks,
W1zz

iiisjw

When you remortgage, the solicitor doing the legal work will be sent a quote for the amount required to redeem the mortgage. This will include the Redemption Administration charge of £295.

You can argue this amount before or after remortgaging.

So the answer to both questions is yes, you can switch mortgages and then argue the fee afterwards and yes the fees will have to be paid as part of the transfer (though perhaps you will have negotiated a discount on the fees before the quote is sent out).

sikejsudjek

http://business.timesonline.co.uk/article/0,,9553-2113910,00.html

Interesting read. I suspect that the fees might well be unjustified. We shall see when a ruling comes later this year.

raeble

This isn't Alliance & Leicester but it is the Abbey. I've looked through all the old paperwork that came through when I moved my mortgage to them and nowhere can I find listed this £225 administration fee that I've got to pay if I want my deeds back. They claim it was always there. I have got the fee listed when they sent the first annual statement the following year but I can't see it anywhere else. I'm look at moving my mortgage but as it is less than 30k £225 completion fee plus any other arrangement fees are quite a bit, it looks like I'm going to have to stay with them. I'm still not happy about having to pay an administration fee I knew nothing about until after I took out the mortgage.

Craig_A

I'm also with the Abbey and have been looking through my paperwork but I am unable to find any mention of the redemption fee on the paperwork I received at time of taking the mortgage out. The first mention was on a 'tariff of charges' included with my first mortgage statement. I do not ever recall this being mentioned by the broker either, although I never specifically asked as this was my first mortgage and I had no idea. Do I have a case, do you think? I have committed to switching to the Woolwich when my special offer period expires with the Abbey on 18/8/06. Also, does anyone know what rate the Abbey were charging on 18/8/04? It'd be interesting to know that, quite apart from the fact I was never informed of the charge.

Thanks!

raeble

In this thread dreamylittledream mentions that deed release was £95 with the Abbey until about year ago.
It seems that there are at least three of us that took out mortgages or remortgages in 2004 with Abbey and don't recall being made aware of any admin fees. The first mention I got of this fee was on the tarrif of charges included in my first mortgage statement which I received in early 2005. Seven months plus after I had taken out the mortgage. We can't all have lost the paperwork, surely?

If you look on pages one and two of this thread there is examples of letters to send to the lender. You need to send about three letters and mention refering it to the financial ombudsman. They seem to be lower the fee to resonable levels.

Craig_A

Thanks for that. As it seems to have been so much lower back then I think I will send them a letter and see what happens. Have you contacted them? Will it cause a delay to me moving to my new lender if I do write to them?

The only charge which we discussed at the time was the early redemption penalty. This was discussed a ridiculous length - as if they were trying to blind me with science and hide the fact that there was a closing fee.