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

mariechrisbulll

jonpeat wrote: »

We got our letter today saying we are due a redress. We took out a 24,000 loan over 35 years so I think we may be due a nice chunk. I had in my head it was going to be £2000 but after reading above it maybe about 5000. That will make my mortgage look a lot nicer. I'm so happy

Ditto!!.... Shame we can't have money direct to us :-( I just said to hubby we'd be glad of 1/2 t us 1/2 to lon ha ha ;-)

Glasgow77

I thought I would look more into my paperwork to establish exactly where I was and post my thoughts at this stage...

I took a mortgage out for £49,400 in sept 2004 over 25 years
I also took out a secured loan for £15,600 same time scales.


In August 2006 I took out another £10,000 loan unsecured over the remaining term of the mortgage.
So 1 mortgage 1 unsecured loan and 1 secured loan all paid in one monthly payment and split up by nram.


Eight weeks ago I got two letters with regards to both the unsecured and secured loan and the ongoing cca/redress issue we are all aware of, one letter for each loan being treated as an individual case.


This week I received replies to both cases with a different response. The first letter confirmed that my secured loan was regulated by the cca and due for redress. This would take up to another 12 weeks to work out the new statements and the redress amounts etc etc.
The second letter, with regards to the unsecured loan, stated that the nature of the investigation was very complex ad as such nram needed a further 12 weeks to assess if there will be any impact to this loan.


Both these loans we taken out prior to the 1st October 2008 and as far as I can see the only major difference is that one is secured and one is unsecured, so I look forward to the replies in 12 weeks.


To give an idea of sums to be redressed I looked at my statements (please don't take these calculations as fact as they are only my guess)


Currently on the secured loan that is confirmed as regulated I am paying roughly £52 a month on interest which is 4.78% as my agreement was made prior to 1st October 2008 the period of non compliance will have started on 31st October 2009 which works out as 39 months now that January has completed or approximately £2028. This is based purely on today's rate of interest and the amounts that I am paying today so I view these as worst case scenario figures in my opinion. The more months it takes nram to make a decision the more interest I would then be liable for so they can take as long as they want.
The second loan that the jury is still out on I pay £29 a month interest at 3.99% and I work that out to be £1131 should it be entitled to redress (personally I cannot see the difference between the two other than secured/unsecured)


I know this does not help the people who are ex nram or have paid loans off but I thought it would maybe give an idea of where many of you in my position currently stand. Anyone with a bit of financial expertise please feel free to correct me as my assumptions are only made from common sense with a little primary school maths :-)


One final question (if anyone has read this boring post top to bottom)
In the questions and answers number 15 nram suggest that there is no point involving a third party claim management company as this would slow things down and would encur a fee. My question is if a third party were to act on my behalf and recover a potential £3k and take a fee would I then be able to get access to the money less a fee rather than have the full amount redressed to nram?
My head says no but thought I would put it out there.......

Evenfields

Hi there, just looking through this thread and note that one of the consequences for Northern Rock/NRAM of not adhering to their obligations of issuing statements in the correct way at the correct time under the CCA regs, is that they would, as they have found out, be prevented from charging interest but also enforcing the agreement.
Just pointing this out as anyone who has been hounded by them and had their agreements ' enforced' in court via a county court claim or by further enforcement action after a CCJ means that they were prevented under this section of the CCA, from doing so. The same requirements and consequences apply from 1st October 2008 for running credit agreements (credit cards) too as well as fixed sum loan agreements. Did Northern Rock issue credit cards? They are also required to send Notices of Sums in Arrears every six months if customers are in payment arrears and if they breach this by not sending them at the appropriate times, they cannot charge interest or enforce the agreement until they have complied.
So i wonder what happens if NRAM or Northern Rock went ahead with any action or enforced the agreement for customers during this period when they haven't complied. The period of non-compliance only ends when they serve the correct statement or notice. So has everyone who has been notified, received the correct statements for this period?
If you are currently making payments, then if they take twelve weeks, that's another three month's interest etc if they haven't yet complied.
Hhmm interesting.........

Evenfields

Also, how come NRAM or Northern Rock are going to credit any of the affected loan accounts directly with this money? Is that right? I can't see how they can, as most fixed sum loans are front interest loaded, which means that the capital or balance doesn't start reducing until the end years of the loan. In the early years, the majority of monthly payments are normally made up of mainly interest and a small amount of capital. So when the affected people made their monthly contractual payments, the payment consisted of part interest and part capital repayment. It is the interest portion, they were prevented from charging as they breached the regs of the CCA. So there should be no argument that the refunded interest (it's not compensation) part of each payment should be sent directly back to the customer. Also how can Northern Rock or NRAM credit it back to the loan account anyway? On fixed sum agreements, surely that is going to alter the length of the agreement i.e. make it shorter as effectively it takes the loan balance down. I believe if they elect to credit it back to the loan accounts, it's because in effect for any current loan agreements which still have time i.e. years to run, there is in effect no immediate refund or impact on their cashflow i.e. hard cash being paid to the customer! it's then just figures on a loan balance. It spreads out the loss for them. Obviously for closed loan accounts, there is only one option. I would argue that as you have paid them your money i.e. real money every month, that as they were not entitled to the interest part during the period when they were in breach, that they pay it back directly to you in cash (well in a cheque). Doing it their way brings up all sorts of questions about altering the fixed contractual sums then due under the agreement & under the fixed time period.In fact it alters the agreement altogether. Food for thought!

Kodagirl

Yay,i got the 2nd letter today,saying i am entitled to redress,i wont get too excited though,i dont think it will be a lot,but its better than nothing!!!
Roll on,the next 12 weeks!!!:D

dsw8

No not my new born baby but the 2ND LETTER!!!
So happy and don't care if people think I am overreacting. 5 years of high interest fixed rate while baseline has been 0.5 has left me reeling. However this twist of fate is something to cherish and almost feels like a once in a lifetime thing.
Stuff like this never happens to us so I am really please for some good fortune at last.

Roll on 12 weeks and take your time NRAM we are happy to generate as much extra interest on the redress now its actually happening

:j

DSJS08

I too have got the 2nd letter confirming I'm one of the lucky few.

With my tax payer cap on I can't help but think the whole thing smells a bit fishy. Almost like a shuffle of balances to reduce the amount showing UKAR/NRAM appear to owe the tax payer. Thus giving someone, somewhere a good news story, and not us BTW, we're just a fortunate sideshow.

Especially considering just before this 'revelation' NRAM were actively seeking to sell on the unsecured loans.

I'll be honest, i won't complain. But the cynic in me says there is more than meets the eye to this.

lindseykim13

Can anyone tell me if the 16 digiit account number not being affected is correct? I can't find it on the nram website.
We had a 2004 unsecured loan which states it's cca regulated but i'm confused about the reference to the acount numbers.

amn_2

lindseykim13 wrote: »

Can anyone tell me if the 16 digiit account number not being affected is correct? I can't find it on the nram website.
We had a 2004 unsecured loan which states it's cca regulated but i'm confused about the reference to the acount numbers.

http://www.nram.co.uk/en/customers/cca-loans/existing-customers.aspx

Click on "Is my loan affected by this issue?" and the reference to 16 digit accounts is towards the bottom of the section in bold.

lennonc1

I was thinking could we go elsewhere for a loan to pay of northern rocks unsecured loan within the next 12 weeks then they will have to pay by cheque if loan is cleared!!!! Might be worth looking into! It would only be for the short term as over next year or so I will be selling the house and would then only have mortgage to pay off ad won't b stuck paying the unsecured loan a 15% as it jumps so high in interest, so if u have switched loans you are on a lower rate plus will have the 4k from cca interest payment, do I make sense or am I babbling lol. Thanks