Complaint letter to Santander

superphil007

Hi all,

Alliance & Leicester has lowered its SVR from 4.99% to 4.24% for new customers, the move followed court approval for the legal transfer of Alliance & Leicester to Santander UK on 28 May 2010 bringing it in line with Santander’s SVR but has not adjusted the rate for existing customers. WHY???
I do know why it’s because they are ripping off existing A&L customers by .75% every month and they are getting away with it.
I have never missed or delay a mortgage payment since 2006, I am one of those thousands of British homeowner who has lost a significant percentage of equity in my property and is now stuck at the mercy of the banks for borrowing. I cannot even get an existing deal since we now stand in negative equity. What can I do?
I have recently wrote a complaint letter to Santander regarding this issue since I am one of those customers that was on a SVR of 4.99 with A&L and now feel somewhat ripped off by Santander regarding this. If you look at the Santander website all information regarding their existing SVR are 4.24%. This is false advertising and someone should do something about this.

I have received a reply from Santander saying that they will not alter the SVR on my mortgage; their reasoning is that there has been no change to the contractual arrangement that was originally agreed with me when I took the mortgage.
I just feel that they are ripping me off and I want to take it further with the Financial Ombudsman Services because somehow I feel that what they are doing is wrong.
Maybe if I get enough support from people, perhaps together we could do something about this.
Philippe
From South Wales

dunstonh

but has not adjusted the rate for existing customers. WHY???

I think that is fairly easily answered.

1 - new business goes through the same process and risk management as Santander's other branches.
2 - the risk levels of the A&L existing book are not yet determined and are considered higher risk at this time

I do know why it’s because they are ripping off existing A&L customers by .75% every month and they are getting away with it.

No. That's just the view of someone that has no understanding of business or risk management.

I just feel that they are ripping me off and I want to take it further with the Financial Ombudsman Services because somehow I feel that what they are doing is wrong.

The FOS will not consider complaints of a commercial nature.

magpiecottage

superphil007 wrote: »

I have received a reply from Santander saying that they will not alter the SVR on my mortgage; their reasoning is that there has been no change to the contractual arrangement that was originally agreed with me when I took the mortgage.

That is correct. You are continuing to get the deal you signed up to. Other customers might be getting a better deal and you might wish you were receiving the same one but there is no obligation on the part of Santander to give it to you.

On the other hand, they may not be able to put rates up for ex Abbey and ex Bradford & Bingley customers.

I want to take it further with the Financial Ombudsman Services

The Financial Ombudsman Service is prevented from interfering with the legitimate commercial judgement of a firm.

Maybe if I get enough support from people, perhaps together we could do something about this.

Only if you purchase over half of Santander's shares between you.

Leon_W

The thing is that Alliance and Leicester used to offer some of the best market leading rates and had historically always priced their SVR slightly higher than other mainstream lenders when your initial deal finished.

This would have been calculated carefully. Obviously there is a certain amount of churn when peoples deals finished and they remortgage elsewhere leaving the lethargic masses effectively subsidising attracting new customer rates. This is the same for all lenders.

You could argue that Abbey are ripping off customers with an SVR of 4.24% when Halifax is 3.5% or C & G is 2.5% but that's what makes a competitive market, they aren't all going to charge the same.

Hindsight is a wonderfull thing, but it should have been a consideration when you first obtained your mortgage what the follow on rate was likely to be, but I fear that most thought at the end of their deal it would be a simple case of remortgaging to another lender however circumstances have conspired to leave many in your position.

superphil007

Quote: I think that is fairly easily answered.

No. That's just the view of someone that has no understanding of business or risk management.


You are right I do not understand their way of managing risk!!! What’s the risk with someone who has never defaulted on his mortgage payments in his life, has 5 years of positive relation with the bank and has an excellent credit rating??
To me in the current climate British banks are just a bunch of thieves and the way Santander are dealing with their existing A&L customers is terrible.
In a few years the market will recover and we will all remember the way banks have conducted themselves.

dunstonh

What’s the risk with someone who has never defaulted on his mortgage payments in his life, has 5 years of positive relation with the bank and has an excellent credit rating??

You are not an individual. You are one of a collection of mortgages issued by a bank that failed that had a higher risk lending criteria than Santander. If it hadnt taken a higher risk approach then it probably wouldnt have failed.

If you took 1000 borrowers from the Santander book at random and another 1000 from the A&L book from random than statistically, there are likely to be more failures on the A&L side. So, a bit like insurance, those A&L borrowers are paying for those failures. The lender isnt looking at you individually. It cannot do that. It is looking at you in a pool of over borrowers from the bank that failed.

New business is processed through Santanders criteria so they know what they are lending and to whom. They are in control of the risk.


Default
Quote: I think that is fairly easily answered.

No. That's just the view of someone that has no understanding of business or risk management.

To me in the current climate British banks are just a bunch of thieves and the way Santander are dealing with their existing A&L customers is terrible.

Thats just the ignorant view. Its better to try and understand the issues rather than read newspaper headlines and whinge.

In a few years the market will recover and we will all remember the way banks have conducted themselves.

no we wont. People forget very quickly. They make the same mistakes time and again. Just look at the all people who think that the events of the last few years are something new that hasnt happened before. You can perhaps forgive the under 30s as it would have been new to them but not everyone else.

superphil007

dunstonh wrote: »

You are not an individual. You are one of a collection of mortgages issued by a bank that failed that had a higher risk lending criteria than Santander. If it hadnt taken a higher risk approach then it probably wouldnt have failed. .

Quote: This is the problem with Santander they do not look at individuals, they apply a blanket rate

dunstonh wrote: »

Thats just the ignorant view. Its better to try and understand the issues rather than read newspaper headlines and whinge.

Quote: You are getting very personal in your comments you must be working for Santander trying to explain why they are robbing customers like me. Perhaps if more British customers like me would whinge and give them bad publicity they wouldn’t get away with this. I do understand the issue very well probably better than you since the money is coming out of my pocket every month.

magpiecottage

superphil007 wrote: »

This is the problem with Santander they do not look at individuals, they apply a blanket rate

They could look at individual circumstances and underwrite in very great detail. However it would take a considerable amount of time which must be paid for by somebody and if they are only looking at one individual, then that one individual must pay for it.

In addition, although lenders know some loans will fall into arrears, they can never be certain which. On the one hand this does mean that the good subsidise the bad. On the other, it means they can look at the overall risk and charge accordingly.

Having totally individual arrangements is far more risky and therefore any investor will want more reward. In the end, the banks are investing in your home purchase and so they would charge more for an individual than a pooled risk.

Perhaps if more British customers like me would whinge and give them bad publicity they wouldn’t get away with this.

Maybe - and you can reap the benefits of meeting the increased costs resulting from it, like the other compliance costs being passed on to consumers.

I do understand the issue very well probably better than you since the money is coming out of my pocket every month.

The evidence of your comments suggests otherwise to me.

In any case, it is about as logical as saying I know how to fly a jumbo jet because I pay for airline tickets.

Bigsmak

Hi..

If you bought a Television from a shop and were paying by credit and then 6 months later you saw it in the same shop for cheaper, should you get some of your money back?

Mortgage lenders have so many different rates which change all the time, sometimes it seems on a daily basis. If they had increased the rate for new customers so that they paid more money than you, would you be complaining?

This is the real world, things change but you signed up to something and you are still getting what you signed up to. They haven't done anything wrong.

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Also - have you looked into the possibility of changing your mortgage provider if you are this upset?

Thrugelmir

superphil007 wrote: »

Quote: This is the problem with Santander they do not look at individuals, they apply a blanket rate

Then the answer is to remortgage to another lender. You have no more loyalty to Santander than they do to you.

The ability to improves ones own mortgage rate is in ones own hands as well.

dunstonh

Quote: This is the problem with Santander they do not look at individuals, they apply a blanket rate

They do look at individuals when they apply for mortgages with them. That is why new borrowers get the lower rate.

They cant look at A&L borrowers individually as the cost would be prohibitive. Could you imagine having to pay people to go through all the applications and asking for documents retrospectively that are missing. They have to look at it as a mortgage book and make decisions until such time that they have had a chance to analyse it or reduce the risk of the book to a level that they feel comfortable equalising the terms.

I do understand the issue very well probably better than you since the money is coming out of my pocket every month.

A drive a car but dont know how the engine works. You comments suggest you dont know the issue better or at all. I am sure if you were lending your money out and you knew one person was low risk but knew nothing about the other that you would not offer them the same terms.

You have the product you applied for and you are getting the rates you agreed with. The fact you chose a higher risk lender was your choice. You could have gone to Santander to begin with but you didn't. if you want to get a mortgage deal that it more specific to you then buy one.