Unfair Redemption Fee

redfish0

Hello,

I took out a mortgage 9 months ago as a stepping stone when buying a new property and would like to change it now to invest in my property and also set my stooz pot against it.
At the time, I picked it because it had a good rate and a low redemption fee. I made it clear to the broker that I only wanted a mortgage that I could get out of cheaply. The redemption fee was £95 with Abbey and I have that in the paperwork somewhere.

I am just going through the process of setting up the new oneaccount mortgage and just got a mortgage statement showing a redemption fee of £225!
From £95 to £225 in just 9 months is a rather unreasonable increase for an "admin fee"!

Have people found that if they complain, they redemption fee is reduced back to a more reasonable amount or is there anything I should do?

Thanks.

WestonDave

To be fair to the broker these increases in redemption fees seem to be across the board in the last month or so, so its unlikely he could have foreseen that.

I think you have a good reason to complain given the short period you've held the mortgage - you couldn't expect them to hold to £95 for the full life of the mortgage because after 25 years it would be worth nothing, but to double it and more within a year seems very unfair and that is the point I would be making.

Trouble is, they have you over a barrel as if you don't pay it, your mortgage won't be clear and you can't remortgage. Its also no skin of their nose if you are upset as you are clearly not going to be a long term prospect for them.

Ian_W

If you complain to Abbey, not the broker, and are persistant - 2 or 3 letters will be needed and a threat to take them to the FOS - there is every probability you'll get your charge reduced back down to £95.

Read this thread:
http://forums.moneysavingexpert.com/showthread.html?t=100358&page=4

It's initially about A&L who started hiking these fees a couple of years ago but all lenders are now sensitive to the fact that the OFT and FSA have their beady eyes on them over unfair charges.

You will need to persist though and after the first refusal reply saying you're not satisfied and ask for a deadlock letter to go on to the Ombudsman. BoL.

EDIT: Just to add, pay it now so your remortgage goes through and complain afterwards.

tonydee

WestonDave wrote:

Trouble is, they have you over a barrel as if you don't pay it, your mortgage won't be clear and you can't remortgage. Its also no skin of their nose if you are upset as you are clearly not going to be a long term prospect for them.

I would tend to disagree. Abbey have a reputation to think about so if they treated customers like you suggest I would think they would be out of business before long.

I have recently sent a letter complaining of the said charge and if the response is poor or negative I will change my current account, joint account, wifes account, childrens accounts and life insurance, all of which are with Abbey.

If the £225 cost was justified then everyone would happily pay it

redfish0

I've written them a letter saying that I think the sudden increase is not acceptable and requested that they adjust it to the original fee when I took the mortgage out.

I'm not expecting them to give a positive response (not on the first letter anyway) but I'm going to give them 3 strikes (letters), the 3rd asking for the deadlock letter and let them know the financial ombudman will be set on them.

Thanks for the advise.

homer_j_3

I agree with you Scott re the abbey possibly giving in because it is not worth allowing it to go to FOS due to the cost.

However, if they ask you to write in tell them that you do not have to do this. The FSA have guidelines stating that a complaint can be made verbally and that they cannot insist that you do this in writing. You may be a person that can complain better in writing than verbally or vice versa so choose the method that suits you best. I would just ensure you keep a diary/record of every step you take, including dates/times and who you wrote to or spoke to in each instance.

Whatever you do, make sure you are very clear and precise in what you want and ensure that you do not get sidetracked with other issues.

Good luck..

regularsaver1

i agree with homer_j - a complaint does not need to be written - they must acknowledge their understanding of your complaint a certain timescale, in which they should give you details of

Scott

The complaints procedure must've changed since I did my CEMAP. Oh, my aching back, old age, etc .

A tip: it'll get dealt with much, much faster if you can get the fax/address for their chief executive's office. I work in a redemption department, and trust me, when you get one handed down from Sir Fred, things happen quicksharp.

Francisco Gómez Roldán is the boss for the next while, if you want a name, and Antonio Horta Osorio takes over from the 21st August, since the first name got his yearly bonus and promptly quit for personal reasons. Not that he's going to see your complaint, but it'll help to get it to his office.

Abbey National House
2 Triton Square
Regent’s Place
London NW1 3AN.

tsoprano

Some mortgages have larger redemption fees if you redeem it within 2 years. That's what happened to my sister. Have you got a copy of your mortgage offer - ? Also are you sure it isn't an admin charge for title deeds, etc? My sister got charged £70 I think for that.

tonydee

Received my first refusal letter this morning, step 2 now being taken. May I ask what a deadlock letter is exactly ?

I've taken Abbey to the FOS before and got more compensation than I bargained for. Heres hoping this one goes the same way.

Ian_W

You need a "deadlock" letter to show you've exhausted Abbey's own complaints procedure before going to the FOS. It's their exceptance that they've investigated your complaint but not been able to satisfy you at the end of it.

A small wager you won't get one as they'll make you an acceptable offer in the next or a subsequent response.