Cheltenham & Gloucester overpayment charge

hendiman

Hi,

Wondered if anyone else is finding that C&G is now charging £10 for administration for all capital overpayments even those within the annual 10% overpayment that is allowed?

I was informed today that this charge was introduced in May 2008 (when I took out the fixed mortgage back in 2007 capital repayments up to 10% were free without any charge). Personally, I don't think retrospectively changing this is in keeping with the FSA's TCF concept and I don't want to pay but I suspect I will have to!

Anybody else any other thoughts on this and what to do?

2latenow

hendiman wrote: »

Hi,

Wondered if anyone else is finding that C&G is now charging £10 for administration for all capital overpayments even those within the annual 10% overpayment that is allowed?

I was informed today that this charge was introduced in May 2008 (when I took out the fixed mortgage back in 2007 capital repayments up to 10% were free without any charge). Personally, I don't think retrospectively changing this is in keeping with the FSA's TCF concept and I don't want to pay but I suspect I will have to!

Anybody else any other thoughts on this and what to do?

There was a thread on this a couple of months ago. In summary:
- A lot of us customers didnt receive (or believe we had received) the notification - apparently sent in January.
- C&G were "reviewing it" in May/June/<maybe still> and at that time were graciously waiving the charge
- C&G "justification" is that there is some admin involved in re-calculating your monthly (one could argue that whilst this is true, £10 is rather high)
- The charge is on capital repayment and not overpayments so if you are interest-only (like me) there is virtual no difference making O/Ps instead of C/R and therefore avoiding the £10 fee. [if you are making O/Ps, my experience is you need to make this very very clear to their call centre staff who seem sometimes to confuse the two]

As I mention, I'm Interest only and concluded its just the same to me to do O/P instead - the only difference is that C&G do not re-calculate your month DD, so that remains the same. Because the interest they charge you goes down but the DD is the same you are then 'automatically' making an additional small O/P each month. You could then periodically pay £10 to ask C&G to re-calc or, I think, they will do this once per year anyway.

Organic12

This is very interesting, I too recently made an overpayment, within the 10% allowance, by CHAPs and was also charged £10 but given a different explanation.

I needed to make an overpayment to bring my LTV down (C&G's valuation index is a joke!) as I was remortgaging and wanted to access their cheaper products. I spoke to probably half a dozen C&G staff in the process of coming to this decision and making arrangements. Not one staff member mentioned any charge to me at all.

C&G then sent me a letter saying they had charged £10, so I phoned to ask why. I was told it was a "handling charge for all CHAPs payments". I have sent a strong letter of complaint stating that the least they can do is reimburse the £10 they failed to mention to me, as well as backing out the interest on it.

I completely agree with you. Have you checked your T&Cs to see if anything in there will help? If the product T&Cs state 10% overpayments are free, then I find it a huge cheek that they now charge. One of the reasons I went for my product in the first instance was the abscence of early redemption fees and free overpayments up to 10%.

hendiman

Organic12 wrote: »

This is very interesting, I too recently made an overpayment, within the 10% allowance, by CHAPs and was also charged £10 but given a different explanation.

I needed to make an overpayment to bring my LTV down (C&G's valuation index is a joke!) as I was remortgaging and wanted to access their cheaper products. I spoke to probably half a dozen C&G staff in the process of coming to this decision and making arrangements. Not one staff member mentioned any charge to me at all.

C&G then sent me a letter saying they had charged £10, so I phoned to ask why. I was told it was a "handling charge for all CHAPs payments". I have sent a strong letter of complaint stating that the least they can do is reimburse the £10 they failed to mention to me, as well as backing out the interest on it.

I completely agree with you. Have you checked your T&Cs to see if anything in there will help? If the product T&Cs state 10% overpayments are free, then I find it a huge cheek that they now charge. One of the reasons I went for my product in the first instance was the abscence of early redemption fees and free overpayments up to 10%.

I am interested to note that you were able to use CHAPs payments - I was told I had to send a cheque for the capital overpayment as no other method - electronic or otherwise was permitted! Unbelieveable in this day and age!
:huh:

I have to check the mortgage T&C's for precise wording but I did overpayments before and they were totally free of any charges subject to being within annual 10% limit. However, staff today also admitted that the £10 administration charge was new (which I took to mean it was not in original T&C's) and only brought in with updated T&C which were sent to me in May 2008 - which I never received!

Although the response I received from the staff member to this point was I did! Obviously she did not adhere to the "customer is always right mantra"!!

Would be interested to know how you get on with your complaint.

For 2latenow - thanks for your reply though I am repayment mortgage so if want to pay capital off have to use capital repayment. Note, I don't even want my term changed so the monthly repayment will stay the same - simply want the o/s capital reduced so no calculations to perform at all! In principle I object to a charge that C&G arbitrarily introduce post the original contract.

Organic12

hendiman wrote: »

I am interested to note that you were able to use CHAPs payments - I was told I had to send a cheque for the capital overpayment as no other method - electronic or otherwise was permitted! Unbelieveable in this day and age!

That just sounds odd - a bank that will only handle cheques not any method of payment?? I presume you're speaking specifically with the mortgage team? I wonder if it's worth speaking with them again (yes, I know the hold music is agony) and mentioning that you are aware of another person who's CHAPs payment was accepted. Do ask after charges though and of course, the bank you're sending money from will charge too.

I don't think I received any new T&Cs either! Thanks 2latenow (lol! how appropriate in this instance), I had no idea of this and see I am not alone.

Will let you know how the complaint goes, it's been about four weeks since C&G acknowledged it.

Organic12

Just an update as I promised.

C&G re-imbursed the £10 fee and the interest on it. However, I had also experienced bad customer service which lent weight to my very grumpy letter.

I was pleased that the C&G apolgised and did take the trouble to answer all the points I had raised in my letter of complaint. So, they get a big gold star from me for that.

koexelek

Organic12 wrote: »

Just an update as I promised.

C&G re-imbursed the £10 fee and the interest on it. However, I had also experienced bad customer service which lent weight to my very grumpy letter.

I was pleased that the C&G apolgised and did take the trouble to answer all the points I had raised in my letter of complaint. So, they get a big gold star from me for that.

Fair play to you

Unfortunately, whenever I have complained to the C & G on behalf of a customer recently, I have not even had the decency of a reply.

I assumed they shredded all their complaint letters and pretended they never received them :rolleyes:

LULULU1

Just spoke to Chelt & Glos. They said that as long as I did not change the monthly payments or change the terms of the mortgage, there would be no fees for overpayments (as long as not over 10% per year)

10 year Fixed
4.99%
Free valuation
Free Legal Fees
£99 admin charge
£995 set up fee
Max 10% overpayment per year

Gazella77

I have just posted somewhere else but thought it's worth posting here as well.

I pulled myself together to go to A&L and check my previous year ISA's rate, got a bit of a shock to find out it was at 3.5% rate! So transfered it to put into my mortgage (5.6%) but when I started asking questions at C&G branch I got furious - they couldn't tell me the difference between the capital payment and repayment, I asked if anything over 1000 is classified as a capital repayment (and hence require £10 admin fee) ad if I paid lets say 3 times £900 in e.g. 3 consecutive days I'd be free of admin charge. I can repay up to 10% annually not to be penalised.
They couldn't tell me, called some manager and was told that it depends how the head office will treat it as actually anything over normal monthly repayments may be treated as a capital overpayment depending how somebody at the other side will treat it:mad::mad::mad:

Again I have been overpaying regularly last year including a lump capital repayment above £1000 and was never charged any fee. Now I am tld that they can actually charge you for any overpayment depending on their mood.

And I am absolutely sure I haven't received any notification from them, and I made several o/p after May 2008 and couldn't see any charge.

And just my observation, the branch I make o/p (in cash) is always empty and the employees seem not to do anything, virtually anything, whenever I come I am the only customer and they chat or drink coffee and yet they don't even know the rules or make an effort to find out.
Couldn't help myself but commented on this today in the branch:mad: would love such a job! sorry I'm really frustrated with all this

Gazella77

Just bumping this up again as I'm looking for some response/ your views/ advice what to do.

Thanks

ohmochraich

I have just taken out a mortgage with C and G and in it it clearly states there is no charge for overpayments of up to 10% of total mortgage amount. Funny - if they changed the rules in May 2008 (as they have claimed to some of you) - Id have thought they would have amended their mortgage templates/ documentation/ terms to reflect this!
Surely they wouldn't be sending out new mortgage docs with old, invalid terms!