Santander are now refunding interest payments on Cahoot flexible loan's

farmer1971

I would like to apologise to everyone still waiting for an adjudication as it seems the adjudicators are waiting for an Ombudsman to rule on my case. (I thought every case was dealt with on it's own merits).

As soon as I received the very biased adjudication toward Santander I settled my loan. In the interest of everyone else fighting Santander I thought I would take it to the wire and involve an Ombudsman.

As soon as I receive the final decision I will of course let you all know the outcome using this board.

I posted the adjudication but I never posted my response to Santanders defense to the FOS.

I hope this helps but remember I up to now have lost my case with the following response!!

Good luck to everyone!

farmer1971

Having read the response from Santander we would like to comment on certain aspects of it.

· We are not specifically complaining about the interest rate increase that took place in August 2008, but on all of the interest rate increases that have accumulated from the start of the loan.

· Admittedly we did seek help from the internet in guidance to complain against the interest rate rises. In doing so we did not use a ‘copy and paste’ generic letter. The email was tailored to air our own individual concerns. We feel this is not an excuse to issue a blanket standard form response. The complaint was initiated on January 25th 2012 and not January 12th 2012 as stated by Santander.

· We did go into more detail after the initial complaint letter due to the fact that we expected Santander to ask for more information in response to the complaint. As you may have noted from the email sent to Natalie Huff of Santander dated ** March 2012 more details regarding our complaint were submitted. We did not receive a response from the email and we had to source information regarding obtaining a CCA and SAR ourselves.


· Santander claim there is still flexibility in the product. Unfortunately we disagree with this as funds can no longer be withdrawn and the online account servicing facility has been withdrawn. In our eyes the product offers the same features as a fixed and high interest rate loan. Santander has still failed to update our credit reference file with the fact funds are unable to be withdrawn. The file (March 2012) still shows £1500 more credit available than there actually is with 66 years before settlement.


· Santander claim the initial interest rate was an introductory offer rising to 8.20% after 12 months. This was not stated on the CCA.

· We do not and never have disputed that Santander has never communicated interest rate changes to us. Unfortunately we never received the information. The emails in appendix 6 are not applicable to us as we have never been subject to the stated interest rates within the time period mentioned.


· We totally understand and accept that the interest rate rises were inevitable as the BoEBR increased. We also understand that Santander is a profit making organisation with shareholders and not a charity. Our main complaint after reading Santander’s response is we feel we were penalised due to the incompetence and short-sightedness of the people managing the risks at Santander. Although we always made our repayments and honoured our credit agreement to repay our debt we still incurred large interest rate rises. We also understand the interest rate rises had nothing to do with credit scoring. Although the BoEBR has fallen dramatically in the past few years we have never experienced a fall in interest rates on our loan during the same period.

farmer1971

· We understand that on February 8th 2006 the company issued a trading statement: “Abbey exceeds 2005 targets.” Santander’s own annual report also shows Abbey’s attributable profit increase in the 2006 financial year on the previous year. Although we have never worked in the financial sector or in no way perceive we have any accountancy qualifications or experience, we can see from the statements and annual reports from the periods in question that the pre-tax profits grew year on year. (2004 £273m, 2005 £362m, 2006 £428m, 2007 £864m and 2008 £1,094m) Cahoots’ parent company (Abbey) was not performing badly. We understand and appreciate that Cahoot was only a small part of the Abbey brand. Our understanding of the financial sector may be naive but for Abbey to offer to refinance our existing loan with a new fixed rate loan with a nearly 10% decrease on the APR without borrowing even more just wasn’t going to happen. Why would Abbey volunteer to make even more of a loss on the product? We did notice that Abbey made a substantial loss on its sale of its life insurance business in 2006 and we can’t help feeling that in a way we were paying for the loss.

· Santander claim the interest rate rises continued through to August 2008 due to increased bad debt on the product. We are not surprised at all that levels of bad debt increased during this period after such massive interest rate increases.

· After studying the competitive landscape in appendix 5 we have noted that Santander has not included the initial interest rate when the products were taken out. We have also noted that the interest rate rises for the period covered is no more than 2% for Cahoot’s competitors. For the same period ours rose by 6.29%.

· Santander claim part of the flexibility was removed (drawdown of funds) due to the installation of a new IT platform namely ‘Partenon’. This was not the fault of the consumer and we feel this removed the most important aspect of the flexibility of the product we signed up to.

Please note: All facts and figures included in this correspondence have been researched by ourselves and we consider them to be true and accurate as they have been taken from Santander’s own websites freely available in the public domain.



In summary we still feel the interest rate rises were unjust due the flexibility of the product removed. To implement interest rate hikes on innocent customer’s accounts due to the actions of others is unfair. Having read Santander’s response we feel it serves only to strengthen our case. Santander did make numerous ‘good will payments’ to customers with the same complaint in late 2011 and early 2012. This was widely publicised on 21st February 2012. After this date Santander issued a blanket rejection to the complaints. Taking into account the above and the documentation previously submitted on 28th May 2012 we feel our complaint should be upheld.

hinch100

I am at the start of the process. I contacted Santander and the Ombudsman a month ago. (No reply as yet from the Ombudsman. Is this normal?)

I had a standard response from Sonia Porter, at Santander disputing my claim and saying that interest rate increases were fair and says I could have repaid in full at any time. Clearly if I was in a financial position to do this, I wouldn't have taken out the loan in the first place.

She also says she comminicated with me regulaqrly by email. (This may have gone to an old email account no longer in use.)

Not sure where I go from here; if anywhere.

The loan, for about £10K was taken out in 2002. For the past 3-4 years I have just been paying the minimum. I currently owe about £4.4K.

What is my next step?

Needless to stay, I am still in dire financial straits and settling is not an option.

Duncton

It's hard to believe that Farmer received a rejection after all the facts presented. Just on the issue of the product now being fixed rate with non fixed rate rates I would have thought the FOS would see as unfair.
I do hope the FOS see sense. If the Ombudsman's decision is not in Farmer's favour, then I would guess that our individual adjudicators would start to provide rejections to all of us.
On the basis that each complaint is individual I would be referring up to the Ombudsman - I assume that all of us would be doing that.
Beyond that what should be next steps? With so many people complaining about the same issue, there has to be another route. Let's hope we're all successful and don't have to worry!

nospotters

Interestingly the Daily Mail article seems to actually be fairly explicit as to the type of issues to be looked inot by the FSA.

Denza

The FOS have a clear mandate to remain impartial and independent; I believe that any ruling in complete favour of Santander in Farmer's case fails on both these counts.

Hence an Ombudsman ruling in line with the Adjudicators would warrant a formal complaint against the FOS in an effort to escalate the issue and raise the profile in my opinion.

I cite numerous adjudication points (from Farmer's case) to back up this stance.

Most notably the admission that the T&Cs are vague/unqualified and open to misinterpretation (and implicitly that interpretation is at the sole discretion of the lender).

There is also the failure to apply due diligence to the case with respect to the application of the T&Cs as described, i.e. in the make believe world where "prudence" and "competitiveness" have any tangible meaning with respect to a lender/borrower credit agreement Cahoot have not even been troubled to justify their own criteria for APR increases because the FOS do not have the appetite (or facility) to consider it.

In the case of the facility then clearly that represents a service failing to the detriment of the consumer and the benefit of the business. In line with that, the advice to engage the FSA is flawed as those who have approached the FSA have found out, e.g. it is the OFT who regulate credit products not the FSA.

I consider this another failing of the FOS which raises more questions on their handling of this case (Farmer's) and the attendant level of knowledge which is required in order to make an impartial and independent ruling.

Extracts from the case response:

"I can see that consumers might interpret the use of the term ‘competitiveness’ in 12.2 (a) to mean that the rate was likely to keep pace with those offered by other providers, rather than that it would be varied to maintain profitability for the lender. Equally, I can see that the provision is open to a different interpretation in keeping with that which Cahoot has put forward.
What Cahoot seems, essentially, to be saying is that it increased the rate because the flexible loan as a whole was not profitable – that is, that these changes were required to ensure its business was run prudently. If that is the case, then the provisions of 12.2 (c) would, arguably,allow Cahoot to make the interest variations it has. Taken overall, then, I am not persuaded that Cahoot was not entitled to make these changes to Mr and Mrs XXX’s interest rate.

I am not in a position to investigate the structural profitability of Cahoot and the wider Santander group, or to assess how the specific interest rate changes made on Mr and Mrs XXX’s account were assessed in relation to the overall profitability of the flexible loan product and how that related to the prudent running of the business.

That is an assessment more suitable for the Financial Services Authority, which provides prudential regulation of Cahoot. Given that, I would also propose that the ombudsman service notify the Financial Services Authority of Mr and Mrs XXX’s complaint and of the arguments that Cahoot has put forward for its variation of the interest rates on the flexible loan product."

I should add that I am actually a fan of the FOS however I cannot and will not accept any decision from them which falls purely on the side of Santander in this instance using Farmer's feedback to date as a baseline.

Denza out.

nospotters

I have received the standard rejection from Santander, is it worth me submittign to FOS or await the judgement of other cases?

hairyfishman

Hi nospotters,

You've probably got as good a case as anyone else, and its very easy to escalate to the FOS. They have a backlog of cases - it will cost you nothing to file a claim with them, and the sooner you escalate your claim the sooner you'll get some kind of resolution. And it will cost Santander approx £500 whatever happens, so to my mind there's no downside...

courtleigh

After all these interesting posts - the outcome does not look too positive.
I submitted by claim to FOS in April- had an acknowledgement and that is the last I have heard.
I took a £7k loan and 12 years later I owe £5k- so by the time I have paid this off they will have had approx £50-£60k!!!
If someone more astute and more proficient wants to raise this publicly- they will definately have a follower!!
A mass action should sort it out!!