One Account rates cut

natwestripoff

Hi Jackarmy, your right they are referring to the terms and conditions and basing their decision on them. They will not entertain aspects of the banking code that requires critical information about a product should be clearly demonstrated. Their attitude is as much about this argument as anything. A court of law would fall back on the Terms and Conditions (as a point of law), the whole point of the FSA is not to simply do what the courts would do, but allow greater and wider interpretation of the consumer law (that it should be made very clear what a product is and if it is suitable).

For me if you apply the Banking Code the bank has clearly broken it regardless of what's in the Terms and Conditions.

I think the FSA do sympathise (they must do) but I think they believe the pain inflicted upon us is bearable for the greater good. When I mentioned that the bank could legitimately raise the interest rate to 40% under the Terms and Conditions, they implied if that happened they would look at it again.

Make of that what you will!

jackarmy

Hi NWR,

I hear what your saying, we all believe in the power of the consumer otherwise we wouldn't be regular contributors to this site.

I have indicated on previous posts that the RBS do not like this type of account and are trying to shut this product down. That's why they are ringing people up hoping that they will reduce their facility, and yet they do not offer a legitimate argument why anyone should.

This account is a blank cheque book and banks in difficult times like to be in control. Knowing that everyone could in fact go out and spend up to their facility means that they cannot accurately quantify their exposure.

I think the concept of the account in todays market still offers excellent value to the newbies, ( it would be nice to have some figures on accounts opened say within the last 6 months), but to the old timers it seems very much like the goalsposts keep moving.

When the differential was 1.1% above Base it was a dream come true, but like all things in life sadly good times are replaced with not so good times.

My question is if the product is so good why do other institutions not offer a CAM?

natwestripoff

I agree with you Jackarmy, my sentiments exactly (it was a dream come true - such flexibility). It is also a great concept but the fact you mention about the lack of being able to quantify the level of exposure also explains why the product is not widely available. In fact in these desperate times where money itself is a commodity in short supply the concept is a nightmare. I had though all current account mortgages have now been withdrawn?

Of course had the banks realised the mess they were getting into they would never have offered the product in the first place and thats why they never really properly explained them. The rates applied are remaining high to help pay for the unused portion of everyones mortgage facility.

red789

Interesting point about terms and conditions. Im not a lawyer but I used to negotiate contracts and I know that just becuase something is in the T&C's it can't overwrite/change contract law. Not only that, but, if a lawyer could help me out here, contracts have to be "fair".

So, to use an extreme example, if I had in my T&C's "1. We reserve the right to change any of our terms any time we like without notice and regardless of any earlier agreed conditions or legal admissability." I suspect that would be considered unenforceable even though we both signed up to it.

On the question of "how can we annoy the one account" - there was some debate over if a mass-withdrawal of funds would be painful for them - from what others here it seems a "mass request to increase the overdraft limit, but not draw any of the money" would be just as effective.

natwestripoff

Hi Red, I understand what your saying and I am not a lawyer either but whether or not terms and conditions can be enforceable depends on what 'higher law' exists. So if there is a national law in respect of an issue, whatever you agree in a contract cannot overrule the national law that is in place. For example an employee may willingly agree to forfeit any right to redundancy pay but this would not be enforceable and overruled by national law.

If you agree to something in a contract and it does not conflict with established law then it is enforceable however ridiculous it may turn out to be (or unfair).

I believe that the Terms and Conditions within these mortgages are perfectly legal and enforceable form a point of law and do not contradict any other statutes (as you would expect from the legal advice available to a bank). Where the banks are vunerable is that they have agreed to act in accordance with certain rules and regulations (encapsulated within the banking code). In respect of these products I think they have clearly broken this undertaking but this does not undermine the strength or legality of the terms and conditions.

However it does break other commitments and the financial Ombudsmen is in a position to rule upon this aspect of the business/ agreement.

This is why It annoys me they are falling back on the terms and conditions becasue this is the courts job and they are already in place to do this. The financial Ombudsmens job is supposed to be different to that of the courts.

In other words what is fair and what isn't is not normally the realm of a court who tend to study and apply the law whatever the outcome (hence criminals are released on technicalities, and the law appears ridiculous at times). Fair play is supposed to overseen by Ombudsman's and other third party consumer groups/organizations.

As regards how to create the bank discomfort to reduce your borrowing is without doubt more painful for them than increasing the borrowing. They have already had to allocate the funding for these products whether you use it or not and therefore they would prefer you to increase borrowing because then they would at least be gaining interest upon it (and a healthy rate at that). I have explained in an earlier post why this is but if we are lucky enough to be able to we should reduce our mortgage to £1.

Catch you later, Chris.

sodamhall1

Im sure in the T+C it states they can reduce my limit at anytime. If the account is annoying you so much then leave there is no charge, stop going on about something you can actually do something about. But I forgot there is not anything out there that really is that great compared so why is this boring thread still running. It is a fair product at a fair price if you dont like it move simply.

natwestripoff

Hi Sodamhall1, I think your wrong about the limits but if your right you should post it as that would be a fairly important piece of information.

It is always easy to deride other peoples concerns and while you don't agree that people should either have a grievance or discuss it with others you don't have to take part. On other hand you have taken part so perhaps its not so boring after all!

Your right about the fact that despite the interest rate having increased so much there is no competitive product as an alternative on the market, but I think the more important issue is whether or not the bank renegaded on its promises. The answer to that doesn't really lie in whether or not there is a better product elsewhere.

sodamhall1

Alot of the letters we have got are written in context at the time of writing they never stated they would guarantee for the whole life it would be a tracker rate, only that the rate is currently at 1.1% above base. Im sure if anyone asked them over the phone today or in the past they would have made you aware that it doesn't track, over time generally it has but due to the way the market has change it is only RECENTLY thinks have moved. Sure I would see why everyone is moaning if they increased there rates like a year ago but now the rate is fine. Its a good product run by a good team of people on the phones, offers great service and competitive rate. I just think you are all asking for a bit too much

natwestripoff

Hi Sodamhall1 - I appreciate your point of view that taken in context, having regard for all the problems currently experienced, that the product incl the interest rate is reasonable, not the best, not the worst, but reasonable and the benefit remains of having a flexible borrowing limit.

Against this however even allowing for the circumstances the margin the bank are enjoying has doubled.

There is also the matter of the fact as it stands the bank are entitled to charge 40% now or 70% interest tomorrow if it so wished. While this may seem extreme the very idea that they have such freedom to do this whenever they want, without reason, is disturbing me and many other customers. It was a situation we did not realize until the rates stopped tracking the base rate.

You are also right that this is contained within the terms and conditions but the other argument fielded here is that such an important fact was not mentioned in the up front, glossy brochures given to prospective customers. The information on this subject that was mentioned implied there was structure and examples given used the Bof E base rate at the time.

Regardless of the merits of this product right now it is not unreasonable to question whether something along the lines of "please be aware the interest rate is not tied to any known rate or benchmark and the bank are free to charge any rate it wishes and at any time" should have been included in the literature - it is perhaps the most important consideration of all and yet it was buried in very small print with a lot of other inconsequential information.

I have another mortgage that I tied to the bank of England base rate (this I have always done regardless of other good short term offers) for 20 years at 0.19% above. This mortgage is now attracting a rate of 1.19% and the mortgage amount is considerably reduced.

Whatever the merits of this product now, the cost of the misunderstanding (whether you think it is justified or not), does amount to a considerable sum.

If people were entitled to greater savings then that is not a dishonorable matter to pursue.

Thank you for your input and opinion that is not often put on the website but nontheless is valid.

bunking_off

sodamhall1 wrote: »

Im sure in the T+C it states they can reduce my limit at anytime.

For what it's worth, under the T&Cs clause 14 for the OA they can reduce the limit if (I paraphrase);

- you exceed the facility
- you breach the T&Cs
- you go bankrupt or enter any arrangement with your creditors
- you lie on your application
- "any procedure is used against you to attach or take possession of any of your assets for payment of a debt" (whatever that means)
- the property is destroyed
- you or a joint account holder die
- the account's being used for illegal purposes (or they're concerned that it is)
- you fail for 6 months to agree a repayment plan with them and then operate it.

(I'd have thought the last one could be used to get rid of you...they insist on repayment within a year, obviously you don't agree, so it becomes payable after 6 months?).

For what it's worth, while I watch this with interest (pun intended), the marketing promises were made by Virgin One in a very different environment to that of today...at the time the bank wasn't a company that only exists because the Government felt it too big to let fail. If I read the "Important Points" bit of my offer letter, it says "The interest rate applicable to the account will fluctuate...", nothing about linkage to BoE rates. So I think that while those of us on the OA have got a weak case in that there's the "smoking gun" of letters stating that because the BoE had dropped their rates they'd follow suit, I do think it pretty weak (personally I can't recall an ad infinitum commitment). Conversely, from what I understand those on the NW-One account don't even have that, so are being very optimistic if they think they'll get anywhere.

Personally I prefer to dedicate my efforts to living with what I've got rather than burning in a fireball of perceived injustice against me...but then again since the larger margin on the part of RBS is only costing me about a quid a day, perhaps I would say that.