Mortgage Exit Fees successes and failures

mollymalone

Bank: Bristol & West
Amount Claimed: £75 MEAF
Amount received £75 :beer: :beer: :beer: :beer:

Easy peasy lemon squeezy! Sent the template letter as per Martin's instructions, two weeks later received goodwil gesture of £75!!!!!!!!!!!
( didnt even have the original paper work!)
Many thanks Martin and to all the helpful moneysavers on this site!!!!:j :j :j :j :j :j :j :j :j :j :j :j :j :j :j :j

MarkyMarkD

pinchy_48 wrote: »

Hi
This is my first post so not sure where it will go or how to read replies. I recently redeemed a RBOS mortgage and paid £225 MEAF. I wrote to them claiming back my money quoting FSA and £35 reasonable fee but RBPS say I agreed to this in my contract (they even sent me a copy) is this worth pursuing or is that it because I knew it was £225 when I signed up?
Thank Alan

The FSA did NOT state £35, they did NOT state that MEAFs had to be reasonable.

They DID state that RBOS could charge you exactly the amount that you had agreed to, whatever that amount was.

Quoting "FSA and £35" just makes you look silly. You're not entitled to anything.

Laura123_2

Woolwich Success

Hi all!:j :j

Thought I'd let you know about our success story!! We watched "Tonight" prog yesterday evening and realised we'd paid £275 final repayment charge to the Woolwich last year. We couldn't find the original MEAF with our mortgage offer but decided to try and reclaim anyway. This morning, I phoned the dedicated line, and just had to give my name, address, date of birth and mortgage account number. No other info was asked for. Was told that there was £191 owing to us which would be paid into bank account within 3 - 5 working days! Phone call took less than 5 minutes - what a result!!
Thanks Martin and the other moneysavers on this site! :beer:

Mona_Lisa_3

I just made the call to halifax, and now expecting a cheque for £155! It was quick and painless despite not knowing my account number or start/end dates.

I'm now calling my Mum to make sure she does the same, spread the word! :A

freestyleskier

MarkyMarkD wrote: »

The FSA did NOT state £35, they did NOT state that MEAFs had to be reasonable.

They DID state that RBOS could charge you exactly the amount that you had agreed to, whatever that amount was.

Quoting "FSA and £35" just makes you look silly. You're not entitled to anything.

The FSA DID state that MEAFs had to be the cost of the lender's administration services. It's in section 2.6 of http://www.fsa.gov.uk/pubs/other/meaf_goodpractice.pdf

Stating that you know what the FSA said without reading it just makes you look silly...

Sorry to be harsh as I know you are well-meaning. But I want to stamp on this poor legal advice.

To everyone else (my opinion is): Reclaim the full amount of your MEAF penalty charge because they're unfair and unenforceable

MarkyMarkD

Freestyle, your selective quotation skills are shocking. I've read the whole of that FSA document through many times.

Section 2 of the FSA good practice paper deals with good practice in the general sense, not specifically relating to past, current or future customers.

The section to which you refer states (with my emphasis, obviously):

If a MEAF term is drafted to enable the lender to recover the cost of the administration services which a lender provides when a customer exits the mortgage, the lender should ensure that the MEAF represents in fact the cost of the lender's administration services.

I'm not sorry to be harsh, and I am well-meaning. I don't want people to have false hope, and I also don't want people to bully lenders by claiming amounts they aren't morally entitled to.

If (and only if) the mortgage terms and conditions state that the MEAF represents the costs of their services, the FSA are saying that they have to charge the amount equal to the actual costs.

If (on the other hand) the mortgage terms and conditions state that the MEAF is a fee for exiting the mortgage, but doesn't seek to relate that to costs, the FSA are saying that's perfectly OK too because that renders the term a "core term" and core terms aren't subject to the FSA's review.

So, if lenders choose to through their terms & conditions, they can establish an MEAF as a core term with a fixed cost completely unrelated to cost.

To clarify that, if something is a core term of your mortgage contract, it can be any amount you and the lender agree up-front. But an item which can vary over time cannot be a core term and it's for this reason that the FSA have investigated MEAFs

But later on in the document, for past customers, the FSA explicitly say that they will not take action against any lender who charges customers the amount they originally agreed (whatever that amount was) because it doesn't consider that such customers have suffered any detriment.

They haven't suffered any detriment from a moral standpoint either. If you took out a mortgage, agreeing to pay (say) £250 at the end of the mortgage's life, that's what you should pay.

You will notice (if you watched Tonight) that Martin didn't even pursue this line of argument - presumably even he has now realised that his initial view that people should go for the whole amount (down to £35 or whatever other random amount) was wrong.

freestyleskier

MarkyMarkD,

I don't want you to destroy people's hopes falsely and I don't want lenders to bully people into paying fees that they aren't morally or legally entitled to.

I would prefer that everyone reads both your and my posts/opinions and the FSA statement themselves so that they can determine their own course of action. This way they have an understanding of the arguements to use themselves, and also to the resistance that they will get from the lenders.

The FSA's emphasis wasn't on the word "if" it was on the words "in fact". There is no requirement that the mortgage terms and conditions explicity state that the MEAF "represents the cost of their services". It is sufficient to show that the MEAF is there to allow the lender to recover the cost of the administration services. When lenders call fees by names such as "Deeds Handling Fee", "Redemption Discharge Fee" etc. it is clear that the purpose of these fees is to cover the costs of handling the deeds, discharging the mortgage security at redemption etc.

On the subject of "core terms" the FSA do not express an opinion either way. They leave that to be determined in court. I quote section 2.10 "This Statement does not deal with the issue of whether MEAF terms are 'core terms'". Specifically, the FSA are not saying "that's perfectly OK".

In section 4 Going Forward the FSA gave lenders 5 options to choose from by the end of February 2007. They merely stated that they were unlikely to investigate lenders who chose option (i)-(iii), but that they were likely to proactively investigate lenders who chose options (iv) or (v). These are referring to FSA investigations rather than FOS rulings on individual complaints and the 2 are quite different. A FOS assessment of a complaint would determine whether the (say) £250 should be refunded. An FSA investigation would determine whether the lender should be forced to change its fees, should be fined (say) £1,000,000 for abusing customers, or ultimately if it should be allowed to continue trading.

If a complaint is made to either the Court or FOS about a MEAF then that body will have to rule on whether it is fair or unfair from a legal point of view. I personally have a complaint with the FOS on this and am arguing that the MEAF is a penalty charge in exactly the same way that many other bank charges are.

You imply that because a MEAF (or any other contract term) is stated upfront then it is automatically fair. If this were the case then there would be no need for the Unfair Contract Terms Act or Unfair Terms in Consumer Contracts Regulations. The reality is that there is a great potential for Consumer Contracts to have unfair terms despite these being stated upfront.

I didn't watch the Tonight programme, however I did talk to the producer Gregor Stewart and also to Martin Lewis prior to this. Whilst they have not been publicly advocating reclaiming the full amount, I am sure that this stance would immediately change in the event of a successful claim.

As I said at the begining of this post, people should determine their own prefered course of action by deciding whether they agree more with MarkyMarkD's arguements or my own.

Regards and good luck,
freestyleskier

Tomsk

Wrote a letter to Alliance & Leicester asking for refund. Fee was £75 when I took the mortgage out in 2000 but was up to £295 in 2005. Used Martin's standard letter to demand excess fee and interest. Had a check in my grubby paws within a week! Not bad for 5 minutes "work".
Thanks you Martin, thank you FSA, thank you forum-folk.

ellie2703j

I rang Intelligent finance asking for a refund on the £140 exit fee charge from May o5. They stated that they were allowed to charge this as the maximum the FSA was allowing was £140 since 2002 and they have never gone over this. Therefore I wasnt entitled to any refund.
Is this correct?

Noz

ellie2703j wrote: »

I rang Intelligent finance asking for a refund on the £140 exit fee charge from May o5. They stated that they were allowed to charge this as the maximum the FSA was allowing was £140 since 2002 and they have never gone over this. Therefore I wasnt entitled to any refund.
Is this correct?

Bit of a strange answer from IF. Check your mortgage documenation, if you signed up to a mortgage with a £140 MEAF, then they don't owe you anything. If you signed up to anything less and you were charged £140, then they owe you money.