MSE News: Northern Rock pays £270m to 150,000 after gaffe

claret_mike

What exactly will people get back?

Affected customers will get all interest charged between getting their letter and the problem being identified this year. They will be sent more information before Christmas.

Just to clarify - there is no mention of this on NRAM and it seems to have been assumed that it would be 4 years worth of interest for a lot of people from reading their calculations..

This matter seems to get more and more confusing. I wonder if anyone from MSE can clarify where this specific information came from?

This is taken from the treasury statement

UKAR has undertaken an internal investigation and has consulted with legal counsel, the Financial Services Authority (FSA), the Office of Fair Trading (OFT), UK Financial Investments (UKFI) and the Treasury. Following this, the UKAR Board has recommended making proactive restitution to affected NRAM customers in receipt of non-compliant statements and default notices relating to CCA- regulated loans. Based on discussions with UKFI, the Treasury has no objections to UKAR’s proposed approach and UKAR will issue the corrected documentation and take steps to remediate interest and other charges to affected customers. Where redress is required, this will be made by correcting a customer's account balance to reverse the consequences of them being charged any interest over the period in which the documentation is non-compliant. UKAR will contact potentially affected customers in writing with further information. NRAM will be writing to all existing customers in the next few days. There is no need for customers to take any action at this time.

Hopelessly_Hopeful

GhIFA wrote: »

That's not a loss, it's a technicality.

I beg your pardon but the law defines that there has to be a correct contract in place!

Loss is about more than pounds and pence.

If that were not the position they wouldn't be making the payout, they aren't giving it out of generosity it is becuase they failed in the contractual obligations.

HHx

Hopelessly_Hopeful

claret_mike wrote: »

GhIFA -

The world is full of perceived unfairness and unjust. Your industry is littered with examples.. The FSA often looking at things in hindsight and then rule that things were not done correctly - even though at the time it was the correct way. Endowment mis-selling, pension mis-selling, PPI mis-selling etc.

You can even look currently at the FSCS levy which is costing more and more to those advisers/firms because there are less of you around and even though you may have far fewer complaints than say the banks, your fees are not proportionate.

Life is not always fair and within the scope of your defined morality.

If a set of laws/rules are set that say if you do not follow X, Y & Z then there will be consequences of this, then you follow rules X, Y & Z.

As I have been trying to read up and make sense of a very complex issue, I understand that the CCA was put in place to protect consumers from unscrupulous lenders offering loans on unfair terms.

Therefore it would seem that whilst no financial loss has been suffered by NRAM customers as such, they have broken the rules/law that form the CCA and therefore the prescribed penalties are applied - even though the mistake made may have been an oversight. these penalties are there to show others that they should remain compliant with the act and it's nice to see banks being proactive rather than opening up another opportunity the claims management companies. If banks had been like this with PPI etc...

Well said.:money:

HHx

GhIFA

claret_mike wrote: »

GhIFA -

The world is full of perceived unfairness and unjust. Your industry is littered with examples.. The FSA often looking at things in hindsight and then rule that things were not done correctly - even though at the time it was the correct way. Endowment mis-selling, pension mis-selling, PPI mis-selling etc.

You can even look currently at the FSCS levy which is costing more and more to those advisers/firms because there are less of you around and even though you may have far fewer complaints than say the banks, your fees are not proportionate.

Life is not always fair and within the scope of your defined morality.

If a set of laws/rules are set that say if you do not follow X, Y & Z then there will be consequences of this, then you follow rules X, Y & Z.

As I have been trying to read up and make sense of a very complex issue, I understand that the CCA was put in place to protect consumers from unscrupulous lenders offering loans on unfair terms.

Therefore it would seem that whilst no financial loss has been suffered by NRAM customers as such, they have broken the rules/law that form the CCA and therefore the prescribed penalties are applied - even though the mistake made may have been an oversight. these penalties are there to show others that they should remain compliant with the act and it's nice to see banks being proactive rather than opening up another opportunity the claims management companies. If banks had been like this with PPI etc...

A bit like if a loan/mortgage agreement says interest rates will go up on associated unsecured lending if the mortgage is moved away, and borrowers then cry foul when this actually happens (mainly because they never read the t&c's before signing).

Where NR have not adhered they have to make amends (or rather the public purse does), and that is fair and correct. However, as mentioned previously,we now have a situation where many people who never thought things through properly before borrowing more than their properties were worth, and in some cases more than they could afford, are now chancing their arm in thinking they should be owed money and expect everyone else to pay for it.

There may have been an error in paperwork used, but judging by discussions on other forums (in some cases going back over a number of years) there seems to be little appetite in the legal profession for taking this fight on, which generally means that they don't see much prospect of winning.

claret_mike

I fail to see what your point is - this thread is about NRAM stating that they have breached the prescribed terms of the CCA and that as a result they have to put things right.

Yes there are people on here getting perceived pleasure out of a situation which they feel is just deserts for charging what they do.

If you are that kind of person who sees life as what goes around comes around and you have been put through pain/stress because of someone or something then you have to take what they say in that context when they see a potential situation where they will have to suffer a bit of stress and pain too. That can be applied to a lot of situations in life. Will never change that unfortunately.

You personally have been trying to say is that you don't like the fact that NRAM will be forced to pay people from the public coffers when there has been no loss - I have explained why they have to do it and you try and deflect the point by coming up with this??

The fact is that I am yet to read about anybody that has not had the rules "not being applied" by NR or NRAM so why should they be afforded different?

I wonder if a freedom of information request could be made to see how many of these loans where £25k+ were taken which were sold/advised through a "professional". I wonder out of how many of those were told about their loan being non regulated etc..

The fact is that we are in a world where more people understand their rights and the internet makes it far easier to spread the information so people will naturally become interested and develop a sense of what am I missing out on.

GhIFA

Hopelessly_Hopeful wrote: »

I beg your pardon but the law defines that there has to be a correct contract in place!

Loss is about more than pounds and pence.

If that were not the position they wouldn't be making the payout, they aren't giving it out of generosity it is becuase they failed in the contractual obligations.

HHx

They are not doing it out of generosity, they are doing it out of their legal obligations, as you point out, and as is correct. Don't kid yourself that they would be doing unless they had to. However, you can argue as much as you like - there is no loss, no-one has been financially disadvantaged because of this. That is different.

claret_mike

Interest has been charged when the prescribed terms of the act state it should not be charged.

We have therefore been charged when we should not.

We have therefore suffered a financial loss as the money we have been paying should have been reducing our balance further. We have therefore been financially disadvantaged.

Not a difficult one to work out that is it?

Is your IFA status real?:eek:

GhIFA

claret_mike wrote: »

I fail to see what your point is - this thread is about NRAM stating that they have breached the prescribed terms of the CCA and that as a result they have to put things right.

Yes there are people on here getting perceived pleasure out of a situation which they feel is just deserts for charging what they do.

If you are that kind of person who sees life as what goes around comes around and you have been put through pain/stress because of someone or something then you have to take what they say in that context when they see a potential situation where they will have to suffer a bit of stress and pain too. That can be applied to a lot of situations in life. Will never change that unfortunately.

You personally have been trying to say is that you don't like the fact that NRAM will be forced to pay people from the public coffers when there has been no loss - I have explained why they have to do it and you try and deflect the point by coming up with this??

The fact is that I am yet to read about anybody that has not had the rules "not being applied" by NR or NRAM so why should they be afforded different?

I wonder if a freedom of information request could be made to see how many of these loans where £25k+ were taken which were sold/advised through a "professional". I wonder out of how many of those were told about their loan being non regulated etc..

The fact is that we are in a world where more people understand their rights and the internet makes it far easier to spread the information so people will naturally become interested and develop a sense of what am I missing out on.

I made my point a few days ago. However, there are many people who are inferring that they never would have signed if they knew they weren't covered by the CCA, when the plainly had no idea what it was until a few days ago, and probably still don't. Yes, people have more idea of what their rights are (although the Internet is full of a lot of mis-information as well), but as was mentioned earlier rights and responsibility go together, and there are a good number of people who didn't think about this responsibly in the first place.

I don't understand your point about "what goes around, comes around" - the people that have caused the NR situation aren't the ones that will pay for this error, in fact the ones that benefit are more culpable in it arising in the first place.

With regards to the only coming from the public coffers, you haven't explained anything to me as you have so condescendingly put it, I fully understand how it works thank you, doesn't mean I have to like it though.

The fact still remains that as it stands, only unsecured loans under £25k are covered by the CCA - If NR have used the wrong paperwork, it will still take a legal challenge to provide entitlement for those with loans over £25k. If that happens, then the rest of us that will have to pay for it will have to lump it won't we? Hardly right or responsible.

GhIFA

claret_mike wrote: »

Interest has been charged when the prescribed terms of the act state it should not be charged.

We have therefore been charged when we should not.

We have therefore suffered a financial loss as the money we have been paying should have been reducing our balance further. We have therefore been financially disadvantaged.

Not a difficult one to work out that is it?

Is your IFA status real?:eek:

Is that best you can come up with. Questioning my professional status? No need to be insulting.

Interest has been charged as prescribed by the terms of your agreement. The refund issue is a technical one based on presentation of paperwork. You haven't lost out, you have paid the interest you were supposed to, not a penny more, which the law now states you can have refunded due to this technical issue. There is no material loss to you.

Cknocker

Whatever the rights and wrongs, NRAM failed to fulfil a legal obligation, as a result they are not entitled to charge interest for that period. They did charge interest so now they have to pay it back.

If your electricity supplier sent you a bill without stating how much per unit they were charging you, they would be failing to fulfil their obligations and as such would have to pay any monies back received from "illegal billing", despite the customer having suffered no financial loss - they used the electricity after all.

These are checks and balances in place that are not optional, the companies do not get to pick and choose what they put on statements/bills.

As for NRAM, I have no love lost for them, I pay my Mortgage on time every time every month. I do not struggle to pay my mortgage, yet can I get my ex removed from the mortgage - can I hell, as they percieve it as increasing their risk - I would love to see them try and get money out of my ex, if I stopped paying!