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

Cknocker

Just a thought.....

I know its incredibly frustrating not knowing anything and when you see other people getting letters it adds to the frustration. However Northern Rock have said they are contacting all affected some 250,000 people, so no doubt their printers are in overdrive, so why not just leave them to it until say the end of January (Which is 8 weeks after this lot started - and lets be honest nobody expected this money in November). If they aren't being bombarded with letters and phone calls they may get the letters out quicker.

downhiller

They've said they sent every letter to those affected on the 12th of December. Even with the useless Royal Mail, I would have expected most to have their letter by now. However there does seem to a number of people who judging by the figures they're quoting, are impacted yet haven't received any letters. The uncertainty of those answering the phones at NRAM isn't particularly confidence inspiring, and it may well be that they've completely missed an entire chunk of people.

vivavilla

Well I've had a reply to my email but it seems to be a standard automated response -

"Thank you for your email following the recent announcement regarding loans that are regulated by the Consumer Credit Act (CCA).

At this time we are not able to give you any further information about the situation.
We are currently undertaking a thorough review of all documentation sent to customers who hold loans that are regulated by the Consumer Credit Act (CCA).
Once we fully understand the situation, in terms of who is affected and in what way, we will write to those customers with an update. We will do this in the next eight weeks.

In the meantime, ouu website will be updated regularly with all the latest information for our existing and redeemed customers.

Please note: if you hold an unsecured personal loan with a 16-digit account number, we can confirm you are NOT affected by this issue"

Now I appreciate what CKnocker says about having patience but when you are getting conflicting statements (ie it's just unsecured loans / no it's some secured loans too) it's very difficult and I have to say my confidence in NRAM actually getting the resolution right is none too high. I'll keep checking the NRAM website as they say to do however will keep a close eye on the situation too and if I don't hear by the end of January will again contact them - I just would like a definitive yes or no, not too much to ask is it?

Mr_Guy

vivavilla wrote: »

Well I've had a reply to my email but it seems to be a standard automated response -

"Thank you for your email following the recent announcement regarding loans that are regulated by the Consumer Credit Act (CCA).

At this time we are not able to give you any further information about the situation.
We are currently undertaking a thorough review of all documentation sent to customers who hold loans that are regulated by the Consumer Credit Act (CCA).
Once we fully understand the situation, in terms of who is affected and in what way, we will write to those customers with an update. We will do this in the next eight weeks.

In the meantime, ouu website will be updated regularly with all the latest information for our existing and redeemed customers.

Please note: if you hold an unsecured personal loan with a 16-digit account number, we can confirm you are NOT affected by this issue"

Now I appreciate what CKnocker says about having patience but when you are getting conflicting statements (ie it's just unsecured loans / no it's some secured loans too) it's very difficult and I have to say my confidence in NRAM actually getting the resolution right is none too high. I'll keep checking the NRAM website as they say to do however will keep a close eye on the situation too and if I don't hear by the end of January will again contact them - I just would like a definitive yes or no, not too much to ask is it?

Hi - I'm new to these forums but having read through I wanted to add my experience so far. I agree with your frustrations and echo them. I am an ex NRAM customer with a mortgage and secured personal loan that was redeemed at the end of 2011. From everything I have read it appears that the secured loan did not comply with the CCA regulations from 2008, however, no-one at NRAM can say anything - not even if the secured loan is covered by the CCA (which it should be).

Under the circumstances I decided to register a formal complaint with NRAM to ensure my case is given a full and considered response (as I am worried it might otherwise be kicked into the long grass). NRAM have 8 weeks to respond to what I believe, as most others would, is a very simple question - ie, having announced there is a problem, how is my account affected? I would expect they will give me this rather than paying the extra expense of sending my case to FOS.

Initially my complaint was met with the standard letter that others were sent on the 12th December, despite my requesting in the email for this to be recorded as a formal reportable complaint. I immediately followed this with another email insisting the complaint be registered and have now had confirmation that it has.

I would urge others to do the same, you can make a complaint via email and at least then you know NRAM have to take you seriously and start providing answers. The more people who do this the more likely we are to find out one way or another.

Cknocker

This is my understanding of the situation for those with together mortgages: -

1. All the unsecured loans were signed up for on the same paperwork regardless of size - this paperwork stated that the loan was regulated by the CCA.

2. In 2008 when the regulations changed with regards to what had to be on the statements, Northern Rock failed to update there paperwork, making their loans for the period from 2008 until they updated the paperwork non compliant with the CCA, meaning that the interest is not chargeable for this period, hence the refund that will be forthcoming. I think if anyone wanted the cash back as opposed to the money off the loan, they would have a very strong case, as the money is not and never was Northern Rocks.

3. If the loan was over £25,000, they have an even bigger problem, as the whole contract is effectively null and void, as they have told the customer that it is regulated by the CCA - when it is in fact NOT! I expect at the moment they have lawyers going through all sorts of case law to try and find a way out, but if this ends in court I expect that the outcome will be that all interest on these loans will be null and void - I think it is unlikely that a judge would rule the customer didn't have to pay the actual loan amount back as this would not be equitable.

mrsvanderkamp_2

I had another look at my paperwork and thought perhaps I wasn't affected irrespective of the loan amount because my statements have an opening and closing balance on them - but does this constitute the original amount borrowed which I understand to be at the crux of the matter? From reading this thread it appears it may not as others who had that info on statements have still had a letter.

In so far as the CCA and loans over £25K I really don't understand how NR can justify this - ALL the paperwork they sent and and still send to me refers to the act - even the statements post 2008 which clearly state they are sent in reference to the "new CCA 2006".

How they can then be suggesting that these loans are not affected as they are not governed by the CCA is beyond me!

They were happy to rely on this piece of legislation in order to obtain a CCJ against me, but now apparently my loan is not so regulated because it appears that that may mean that THEY owe ME money?? Go figure!!

I agree with post above - I think the lawyers are working overtime on this one!

swan1981

I had an unsecured Personal Loan with Northern Rock under 25000 taken out before 2007, I settled it in 2010.

I have not received a letter

From what they originally said I thought I woud qualify.

79buttonmoon

Hi,
Just wondering if anyone more knowledgable than me can help with the following...?

my husband took out a together mortgage with an unsecured loan of £14,000 in 2006. We think this will be included in the 'refund'

However, the following year he took it a £19000 secured loan against the property. Do you think this will be included? we keep reading different things regarding secured and unsecured.

this property has caused us nothing but problems as we are in negative equity (obviously with the amount of mortgage /loans taken out!) so any reduction of balance would be helpful to us.

Thanks in advance

natalie_1982

Hi there, I am sure this has been referred to earlier on in the thread but I couldn't find a response, and it was within the first few days of the mistake being announced so I am hoping somebody has more information now.

I have a together mortgage and have received a letter saying that I may qualify for redress.

I understand that any potential refund would be applied directly to my outstanding NRAM account; this will go some way to getting me out of negative equity. Also, as with most mortgages, we are able to overspend in order to withdraw the funds at a later date if we so choose.

My question is this, will the money they potentially apply to my account be included as an overspend?

Could I, therefore, withdraw it in order to pay off my one existing credit card debt, for which I am on a debt management plan with CCCS? My thinking is that by doing this I can pay it off (I've been paying £1 a month for 4 years) and then get it removed from my credit report and, in time, look at remortgaging for a better deal. It's all very well that NRAM will pay the money back to my account butI will never be in a position to remortgage while I have an awful credit card debt hanging over me.

Dominic_star

I used to work at Northern Rock until 2005 in the department that carried out statement production & restructuring of mortgage accounts (i.e. recalculating entire accounts where an interest rate was wrong, incorrect application of payment amounts etc). It is absolutely staggering how many payments and interest rates are wrong on an Offer of Advance or input incorrectly on completion and I would implore anybody to check their statements regularly to ensure they are being charged the correct interest rate.

As far as being able to take back the money from them goes, if memory serves, all Together mortgages have a drawback facility which you can use where you have made an overpayment. I don't know the legal ins and outs, but if I wanted the money back, I would be tempted to argue that the payment due should be considered as the original payment due minus the interest unlawfully charged, i.e. purely the capital and that all payment above that should be treat as an overpayment and therefore available for drawback.