Duff advice from First Direct

HUFCsteve

We're in the process of changing mortgage provider (from First Direct) and so have to pay a redemption fee. I phoned up to ask them the o/s balance and to confirm the fee we'd have to pay.

An adviser quoted me £2k. As I had another query later that day I rang again (and spoke to the same guy). He reiterated the £2k fee.

To cut a long story short, it turns out that the fee is actually £3k. :mad: FD are adamant that cos' the paperwork we had when we took the mortgage out states £3k - what the adviser said over the phone is irrelevant (even though they have listened to the tape and confirmed what he said).

Where do we stand?

holly_hobby

Although incompetent by FD staff, you may not get any joy with them on this, as you have stated yourself that the mge contract you entered into (and signed at the time of application) does confirm the redemption fee to be £3k.

Are you saying that if you had known the redemption figure was 3k and not 2k you wouldn't have proceeded with the redemption ?

If so, it could be argued that when you contacted FD, to seek their professional and knowledgeable advice regarding your mortgage contract and its redemption, you were directly led to redeem your mge based solely this information. And had you be made aware by the FD advisers that the fee was actually 3k you would not have proceeded.

Thats the only tack I can suggest you take - as unfortunately your contract does state the 3k fee - which is what the lender (and even FOS) may rely upon as a defence.

Anyway, no harm in making a complaint and see wher this takes you .. (keep it concise, punchy, to the point and what you want FD to do to resolve your complaint)

Hope this helps

Holly

HUFCsteve

Thanks for response.

FD reckon it's an isolated incident so... They were very matter of fact when I challenged them, suggesting that whatever was said over the phone was irrelevant cos' of the paperwork.

holly_hobby

Well you can argue that you called FD directlly and sought their considered advice, as to avoid any errors or misunderstandings from your part. the fact that 2 different members of staff on 2 different occassions gave you incorrect advice, which directly influenced your decision to redeem when otherwise you would not have, needs to be addressed.

Have a go ... what have you to lose ? (remember when FD have given you their final response, and if you remain unhappy, you may (without cost) refer the matter to the Financial Ombudsman Service (FOS) for their mediation.

Good luck ...

Holly

Senior_Paper_Monitor

1st shot (and cheapest) across the bows is to make an data access demand (Subject Access Request - SAR) in accordance with the Data Protection Act 1998, specifically including (but not limited to) recordings/transcripts of the two telephone calls you refer to.

As Holly advises, the whole process afterwards should state "2 different members of staff on 2 different occassions gave you incorrect advice, which directly influenced your decision to redeem when otherwise you would not have" and I'd give you a better than 50:50 chance of obtaining the difference.

An SAR gets the attention of people big time (I do a fair amount of work in the area of dispute resolution and in rocks both little and big organisations right back on their heels when they receive this) - and can often lead to an early resolution (apart from providing the necessary information should round 2 become necessary).

HUFCsteve

Thanks for the suggestions.

FD has offered me (albeit after much prompting) £100. FD has stated that this is the maximum amount they are prepared to offer me.

In relation to the other points raised - can I be clear that I rang FD as I wanted their expert advice regarding our mortgage contract and its redemption. The figures that we have been working on have been based solely upon this information. Had I been made aware by the FD adviser that the fee was actually £3k I would not have proceeded.

The other important fact to reiterate is that I spoke to the SAME adviser twice. It is he that told me £2k TWICE.

I have now requested information from FD as I do intend to file a complaint with the FOS.

The other thing that really bothers me about this sorry episode is that FD's defence is based upon the fact that they had written to me originally with the correct information. Thus making the misinformation they gave me irrelevant. My point would therefore be that if this truly is the case then surely this important caveat should be brought to the attention of any caller to FD? i.e. It surely encourages FD advisers to tell a customer anything?!?

holly_hobby

HUFCsteve wrote: »

FD has offered me (albeit after much prompting) £100. FD has stated that this is the maximum amount they are prepared to offer me

Which you reject

HUFCsteve wrote: »

In relation to the other points raised - can I be clear that I rang FD as I wanted their expert advice regarding our mortgage contract and its redemption. The figures that we have been working on have been based solely upon this information. Had I been made aware by the FD adviser that the fee was actually £3k I would not have proceeded.

You want to make clear that your decision to redeem, was soley based and wholly influenced on the information that you sought & received from FD advisers, whereby you had it confirmed on 2 separate occassions that the ERP was £2,0000. (you want to clearly place the burden of onus on them)

HUFCsteve wrote: »

I have now requested information from FD as I do intend to file a complaint with the FOS.

FOS will only consider your complaint if the provider has issued the final response in the matter. So to that end I would firstly put my complaint in writing to FD - containing all supporting statements (name of advisers etc) and the fact that the advice given can be evidenced in the telephone recording of the conversations - which FD have confirmed they hold, have listened to, and agree that the redemption figure quoted to you was indeed £2k.

HUFCsteve wrote: »

The other thing that really bothers me about this sorry episode is that FD's defence is based upon the fact that they had written to me originally with the correct information. Thus making the misinformation they gave me irrelevant. My point would therefore be that if this truly is the case then surely this important caveat should be brought to the attention of any caller to FD? i.e. It surely encourages FD advisers to tell a customer anything?!?

In order for the complaint to suceed, you need to emphasise that you are a layman, which is why you sought the direct and expert advice of FD, in calculating what (if any) early redemption penalites you would have upon closing your mortgage account.



The fact that you have a copy contract, that FD have only referred you to AFTER redepmtion took place, in a clear attempt to negate the very serious and grave errors made by their staff and your complaint raised - (I would argue) is irrelevant.


What you want to do is make clear that as a layman, you directly sought the assistance of FD to ensure of the correct figures and information in relation to your mortgage redemption. And it was upon the information provided by FD advisers on the said occassions, which directly led to your subsequent decision to redeem your mortgage and accept the penalty fee quoted to you.

As I said earlier, if I was dealing with this on behalf of the lender or FOS, I would bang on about the corect fig being in the contract your signed as a defence in the matter.

SO ... what you want to do is draw attention away from this fact, focusing moreover that you asked FD directly to examine your mge terms, and for them to confirm the sum of any penalty due. It therefore being completely reasonable for you a layman (and the mortgagor) to wholly accept that such information provided was completely true and accurate - and solely upon this basis you acted. (again I presume, as I asked in my first post, and have based my comments upon the asssumption, that if you had known the ERP was £3k instead of £2k you would not have proceeded)

You get the general idea of how you need to play this ... keep us posted what happens !!

Hope this helps

Holly

HUFCsteve

Thanks again.

Do I have to wait for a letter from FD confirming that this is their final position or can I contact the FOS in advance of this?

holly_hobby

You must have received the providers final response in the matter before FOS will become involved.

So, lay out your complaint as discussed, advise that you will unfortunately have no alternative but to involve the mediation of FOS if FD do not accept responsbility for their incorrect advice. (as dependant upon the no of complaints already submitted to FOS for FD - they may be liable to a case fee which I think is now around the £500 mark. This fee is payable by FD whether FOS decide in their favour or not).

But don't make it look like a churlish threat - in my experience if a complainant openly threatened with FOS if they weren't going to get their own way - I would do my damdest to find a defence for the complaint. (dog with a bone and all that !!).

Ideally you don't want to involve FOS - as once the Ombudsman himself has made the decision (which happens if you appeal the adjuicators decision), that really is it, unless you take it to court.

If you ensure that you constuct a robust and factual letter of complaint, don't waffle, raise irrelevants points etc - FD (when considering the FOS fee) may make a business decision to make a "gesture of goodwill, without admission of liability" partial or full refund.

If they offered you 50% refund, as they are partly responsible for the mess, which would be about equal to the FOS fee they would have to pay if they offered you nothing & you referred the matter to them, then I would take it (from their point of view they will be apx £500 down either way).

As we have already discussed, the onus really is the mortgagor (borrower) to check their mge contract, and this may well be the tack FOS takes if it gets there (as it certainly would be mine). But in this case, I'm advising from your side - so use the approach I have suggested.

The above is only my opinion of course you must proceed how you see fit - and I wish you the best of luck however you choose to proceed.

Hope this helps

Holly

HUFCsteve

Thanks so much for your helpful suggestions. FD are sending me a letter, confirming their position as well as including the key points from the two misleading conversations I had.

HUFCsteve

Update

Letter now received from First Direct, offering me £225 "in recognition of their regret".

They are asking me to accept this gesture in the spirit intended and return a signed Acceptance of Offer form.

If I accept their offer, does this preclude me from taking it any further?