C&G arrears letter

L16FTY

Hi,

Hoping someone can assist with a bit of advice.

My mortgage is with C&G and in 15 years I have never once missed a payment or gone into arrears. The monthly payment is taken from my account by direct debit.

Yesterday I received a letter from C&G advising that my account was in arrears by £100+ and I had to ring urgently to make arrangemens to pay off the arrears or I would be charged etc etc. Concerned, I called the number and after holding for 25 minutes was told that the arrears amount was actually as a result of C&G not taking the correct amount by DD from my bank account back in April 2005!!!

The nice man offered me the option of paying imediately by debit card or spreading the cost over a couple of months. So they made a mistake nearly six years ago (allegedly) and now want me to pay it off immediately.

Can they do this? What are my options? I'm really annoyed about this!

Any advice gratefully received.

Annisele

The Financial Ombudsman Service has a technical note on mortgage underfunding. Most of the cases it discusses involve more than £100, but you might find it useful.

DVardysShadow

L16FTY wrote: »

...
Any advice gratefully received.

In your position, I would not have phoned - or if I did, I would not have held for 25 minutes. I would have written and asked for an explanation. Even if I had been dealt with reasonably quickly, I would have asked for the explanation in writing. And that is what I would suggest you do. £1 to 1p it is going to cost them getting on for £100 to answer.

Annisele's link is excellent

Usually:

• We will tell the lender to write off the capital shortfall that has built up to the date the mistake was sorted out.
• We will not deduct from the shortfall the notional past savings that the borrower made as a result of having made lower payments.

The idea of compensating the borrower in this type of case is to make up for their lost opportunity to pay the higher repayments. By the time the problem is recognised, the borrower will normally have spent the “savings” they made each month, but did not know about, as part of their ordinary expenditure.
We will generally assume that the borrower would have made the correct higher repayments, if they had been asked to do so.

when you write, I suggest that you stick your tongue in your cheek and head the letter 'complaint'. Make reference to possibly referring the matter to the financial ombudsman. Your lender will be aware of the Financial Ombudsman's guidance, and I suggest that it serves their purpose not to write anything to you but to try and deal by phone so that there is no correspondence to be found on a compliance audit. Don't settle for that -insist on it being dealt with in writing - it will be more likely that they will write the sum off.

L16FTY

Thanks for the website link - although not exactly my situation it gives me some reassurance!

The letter I received made it sound as though I had made a mistake and I needed to correct it immediately. When I called and spoke to the guy and he told me the situation, I said that I would not be prepared to pay anything until they explained in writing the circumstances which have caused this situation (i.e. their fault and not mine!). Upon receipt of this letter I said I would contact them to discuss the matter further. I think I will reply to their letter in writing and, as you suggest, treat it as a complaint.

Thanks for the help

magpiecottage

Whilst I do not know the exact details, I think the lender will know if it attempts to fight, it is more likely than not that it would lose at FOS.

So if I were you I would complain that not only have they made an error but they have waited over 5½ years to tell you about it.

GMS

I would write to them stating that as you had a direct debit, assumingly a variable one then the onus is on them to take the correct amount each month. They request the amount required.

If they had made an error they are obliged to tell you straight away, not wait for 6 years.

Check the Direct Debit Guarantee and see what it says.

Personally I would want it written off as it is clearly their error.