Yorkshire Building Society Collar

clarelb

Hi there

Would be interested to know if anyone has had a similar experience to us (and got anywhere) with YBS re the collar attached to their tracker rate.

Our 5 year fix expired in May 2011 and we had assumed we would go to base + 0.75%. This was a reasonable assumption given that we had received 5 years of online statements (which we tended to check on a weekly basis) and annual statements which clearly stated (without reservation) that the rate would go to base + 0.75% at the end of the fixed term.

However, when we checked a couple of months before the fixed term expired, we were suddenly told that a 3% collar applied. Of course, when we went back and checked the Key Terms we realised that they included a collar - something which wouldn't have seemed relevant (given interest rate levels) at the time which we took out the mortgage and something that we would not have checked given the misinformation we had consistently received for 5 years from YBS.

Unsurprisingly, we were exceedingly frustrated (to say the least) as we relied on the information provided by YBS over the 5 year term and we would have refixed with an alternative provider had we known about the collar. Now our circumstances our such that we cannot move to another mortgage company.

The most annoying thing is that we flagged the issue with YBS and, had we not, we would have ended up paying base + 0.75% (we even received a letter after receiving YBS' final decision on the matter (ie that they would enforce the collar) to say that we would pay 1.25% once the fixed term rate expired, although they subsequently retracted that letter).

We have complained to the Ombudsman and await a decision but I don't hold out great hope. It seems that YBS effectively has license to state any interest rate in information provided subsequent to the initial mortgage, with no duty of care to ensure that the information is correct and no penalty if a customer relies on such misinformation. In the meantime, our statements continue to state the applicable interest rate is base + 0.75% and we continue to pay 3.75% .

Would be interested to know if anyone else out there has had a similar experience and whether they got anywhere with YBS.

ACG

https://forums.moneysavingexpert.com/discussion/2663695

Thrugelmir

As the 3% collar was mentioned in your key facts document then it is enforceable by the YBS. In some instances it was not. These people were therefore lucky enough to drop to base +%.

You weren't given misinformation. As the information was supplied at the outset. When you signed the mortgage offer.

clarelb

Thanks for the feedback.

I guess the key point for me is at what point over a 5 year period does it become reasonable to rely on the subsequent information supplied by YBS? We are not disputing that the collar was mentioned in the Key Facts as it is there in black and white, but at the time we took out the mortgage it was not a key feature which stuck in our minds given higher interest rates at that time and that the main feature of our mortgage was the 5 year fix.

For the 5 years after we took out the mortgage, we were consistently presented with a statement that our rate would revert to base +0.75% after the fixed rate ended and so we planned on that basis with the result that we are effectively now locked with YBS due to our circumstances.

It seems to me that if a bank or building society has no duty to ensure that information the information it sends to its customers (on statements and more generally) is materially accurate, then they could communicate anything they want to secure ongoing business.

Is there anyone else out there in a similar situation?

funscott

dont hate me, i am one of the lucky ones (1.25%) and have been for a good while

from memory it was around 20% of their customers who got the +0.75% the other 80% had the collar in their key facts. i got my mortgage around dec 2004. anything from 2005 onwards seemed to have this 3% collar.

I did have to chase them about it and assume they looked at my paperwork and worked out they couldnt inforce a collar.