Bank mortgage error

jangor_2

Thankyou for all these helpful comments. The Woolwich letters repeatedly stated that they would not consider returning me to the interest rate I had originally applied for (and had been accepted) and that I would have to accept a new package at a higher rate although they did advise they would put any overpayments back into my mortgage (if I understood correctly). (They advised this was because the interest rate in January 2006 had ended!) It was at this point I contacted the Financial Ombudsman, from whom I have received two letters. I have finally been appointed an adjudicator but have been advised it will be another month or so before he is able to look at my case. I will therefore continue to pay at the variable rate until hopefully the Ombudsman can adjudicate in my case.

jangor_2

I finally have an update on my complaint, having received a letter from the FOS this morning.

"After reviewing details of your complaint I was in agreement with you that the bank should apply the rate and backdate the change to ensure you have suffered no financial loss. ... approached the bank and asked it to apply the rate but unfortunately it has advised that the original product you have requested cannot be added to your account as it is no longer available. I accept the banks explanation that it is now 'physically impossible' to add the same rate and cannot insist that the amendment is made if it simply cannot be done. .... asked the bank to make alternative arrangements to ensure that a similar product is made available to you. Once this is arranged it has assured me that it will assess your loss and credit your account with the difference. As you are yet to select another product, I am unable to say what this amount would be at this stage. In order to resolve this matter, the bank has provided a name .....to ensure the new product is selected and added without further delay or error .... please reply by 21st March."

It would thus appear that the Bank takes no account of the Ombudsman's intervention whatsoever despite the fact that it was totally the Bank's error. The present rates are much higher than my signed for and agreed rate of 4.99% at 31st January 2006. There is no similar rate. It seems therefore that the Banks are in a win win situation. I have been given just two weeks to decide and respond. I will not be taking out a further mortgage with the Woolwich. Even the original contact they referred me to, when asking me to take out a new package last year, was unable to explain why I could not be placed on the correct rate and indeed said this would be possible.

I am a very unhappy customer.

toonfish

their systam cannot cope with it, but if I read that response correctly if you pick a new product they will refund you the difference between that and the original one you applied for. That seems fair enough.

dunstonh

The response seems fair. Pick a current product and they will work out the loss you suffered and credit you with the difference.

Thats a result and one you should be happy with.

jangor_2

I am unsure if I am only to receive the difference between the original 4.99% from the 31st January 2006 to the present time or whether they will refund the difference for the two years from 31st January 2006 to 31st January 2008, which was the originally agreed two years fixed rate, whatever the new fixed rate is I must now accept.

I do have another problem, in that, due to this error, I became so concerned financially that I am now in the process of moving and wish to be mortgage free. If I am forced to accept a new two year fixed rate product, I will be liable to pay a penalty presumably. I am unsure if I can continue on the variable rate, as I am at present, and just request the Woolwich to refund the difference between the 4.99% I should have been paying to the variable rate I am now paying, to the time I move.

toonfish

jangor wrote:

I am unsure if I can continue on the variable rate, as I am at present, and just request the Woolwich to refund the difference between the 4.99% I should have been paying to the variable rate I am now paying, to the time I move.

I can't see why not, although they have several products with no early repayment charges

dunstonh

ask them to calculate it based on the variable rate as you dont want to go into a fixed rate at this time.

MarkyMarkD

I think jangor is trying to have his cake and eat it, now.

The FOS have quite rightly said that they should stick you onto the closest equivalent (i.e. two year fixed) product, and compensate you for any difference in rate. That would be fair.

To put you onto a variable rate with no penalties, but compensate you for the difference in rate, would be putting you in a far better situation than if they'd done it right in the first place. There's frankly no way they are going to do that for you.

The most you can insist on is that they give you a fixed rate to an end date which is no longer than your original selected product, and with a cash adjustment for any difference in rate. You SHOULD be tied in until the tie-in date on your original selected product.

To claim that the error they have caused has led you to sell your house is frankly unbelievable. If you've decided, along the way, to sell your house and consequently it would have been very foolish to have selected a fixed rate product with a penalty, to have pursued the claim to this stage is mad. You should have thought - "lucky me, I said I wanted a fixed rate, but actually I've ended up selling the house, and I've avoided a big redemption penalty".

jangor_2

I don't think I am actually trying to "get my cake and eat it". In 2005 the Bank send me a continuation form asking if I wished to continue with a two year fixed rate at 4.99% from 31.01.06 to 31.02.08. I signed the form and returned it, accepting all the implications. My budget is such that I have to calculate down to the last penny. Last year I noticed that my payments were some £40/50 per month higher than they should be. I rang the Woolwich to query why, was actually spoken to quite rudely and told in no uncertain terms I was on the correct variable rate. After several calls I eventually spoke to a very nice person in the accounts department who actually checked for me, found my signed contract and looked into the matter for me. Again many conversations ensued with many departments until finally it was accepted that this was a Bank error. Despite this the Bank insisted I speak to a named person to discuss a new product. I actually did speak to the named person who advised me he saw no reason why I could not be returned to the rate I had agreed to, i.e. 4.99% and he would put the correct code through. The rest is really history, this did not happen and the Bank insisted I take out a new product. At this time I went to the Ombudsman, received reply as given. Unfortunately I am at an age and on my own and this is the reason I decided to move and become mortgage free due to my anxiety over this error and the struggle with the extra payments, despite the disbelief expressed in the previous email. Obviously I am unhappy with the Bank and do not wish to continue with them and therefore do not now want a further fixed rate mortgage, which will be at a much higher rate than the 4.99% I should be paying until 31st January 2008. I had intended to move eventually but certainly not for a couple of years, which would have suited me perfectly. I am therefore now in a position of either continuing the overpayments until I move, which does not seem fair to me or taking on yet another fixed rate with the Woolwich. I am not sure why this means I will be profiting from the Bank's error. They have now had nearly 12 months of overpayments from me!!

MarkyMarkD

Don't take my comments the wrong way, jangor.

I've been very clear all along that Woolwich made a mistake, and that they should give you the product you asked for. The FOS have now confirmed that by upholding your complaint, and Woolwich are going to put you back into the financial position you would have been by giving you the closest equivalent fixed product (which now needs to be a 1 year fixed ending in February 2008, to be consistent with the original end date) and financial compensation for the difference in rate.

If Woolwich do this, then you are back in the situation you had requested.

The fact that you've gone off and decided to sell your house in between, meaning that if your original request had been implemented you would have incurred a redemption penalty, makes things far more complicated.

FOS have sought to get you back to the position you claimed to want to be in - i.e. paying a fixed rate and being tied in until February 2008.

You are now saying that, even if Woolwich put you exactly back into that situation, you aren't happy.

That's not Woolwich's, or FOS's, fault.

The fact that this situation has taken 14 months to resolve since the original error by Woolwich is primarily down to your failure to notice that the error was continuing until seven months after it originally occurred - not exactly sensible for someone who's so anxious about their financial position that they subsequently sold their house!