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

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Comments

  • gavman99
    gavman99 Posts: 50 Forumite
    lennonc1 wrote: »
    Hiya, they are applying the redress every week, lady I spoke to said so many every week, unless you have a complaint logged like me and many others! If you have stated you do not want this applied to loan they can't go against your wishes as they would be in more trouble.

    I sent my letter saying I want a cheque and they replied it will go on your account. I haven't and won't be taking it further. Your last sentence suggests I could now at the bottom of the pile as far as adjustments going on my account. Not that it matters I suppose. The longer it takes them to correct, the longer I get an interest free loan.
  • lennonc1
    lennonc1 Posts: 276 Forumite
    I thought this was interesting - nram remain profitable!!!!!!

    11 Dec 2012
    We note the Ministerial statement made today by the Economic Secretary to the Treasury regarding customers of Northern Rock (Asset Management) plc (NRAM) who have loan accounts which are regulated under the Consumer Credit Act (CCA).
    Following changes to the CCA implemented in 2008 before the separation of NRAM and Northern Rock plc, certain letters and statements have been sent to customers that do not comply with all the requirements prescribed by the CCA. This has been brought to light following the transfer of the NRAM loans onto the UK Asset Resolution (UKAR) IT platform.
    Affected customers are now entitled to redress, and will also be sent revised documentation that contains all of the compulsory account information and precise wording required by the CCA. 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 their documentation is non-compliant.
    The total cost to NRAM of remediating the interest charged is estimated at £270m. The remediation is not expected to delay materially the ultimate timing of the repayment of the NRAM government funding, which stood at £19.6bn as at June 2012. The Treasury continues to estimate that it will fully recover all the taxpayer support provided to NRAM.
    The OFT regulates the CCA and has been consulted on these administrative errors, as has the FSA.!HM Treasury, UK Financial Investments Ltd and legal counsel have also been consulted on the issue and our remediation plans, which are focussed on acting in full accordance with the law, and treating our customers and the taxpayer fairly.
    We are currently assessing the full impact of this issue and are writing to all NRAM customers who are affected to advise them on the next steps we will take. NRAM mortgages and standalone unsecured personal loans are unaffected by this issue.
    The UKAR Board has asked Deloitte to conduct an independent enquiry into the specific circumstances of this issue and to make recommendations on potential enhancements to the associated processes and controls.
    Customers do not need to take any action.!We are doing everything possible to resolve this matter and they do not need to contact NRAM, or anyone else about this issue.
    Chief Executive of UKAR, Richard Banks said:
    “NRAM is acting in accordance with its legal responsibilities and we are determined to do the right thing for customers and the taxpayer. We will be writing to all customers who are affected and advising them on next steps. We have not received any complaints or claims as a result of this matter and as far as we are aware it has not resulted in financial loss for customers."
    Update on Business Performance
    NRAM has continued to perform strongly and arrears levels have fallen by over 18% over the course of 2012.!
    Further repayments of the NRAM government loan have been made. In the eleven months to the end of November 2012, £1,370m had been repaid reducing the total funding balance to £18.5bn.!This brings the total NRAM loan repayments to £3,470m since the formation of UKAR.
    NRAM's interim financial results for the 6 months to June 2012 show a statutory profit before taxation of £305m, and NRAM is expected to remain profitable in 2012.
  • cot1198
    cot1198 Posts: 334 Forumite
    305m in six months, thats not bad.

    “NRAM is acting in accordance with its legal responsibilities and we are determined to do the right thing for customers and the taxpayer. We will be writing to all customers who are affected and advising them on next steps. We have not received any complaints or claims as a result of this matter and as far as we are aware it has not resulted in financial loss for customers."

    They would not have received any complaints or claims as no one knew except NRAM at that point.
  • lennonc1
    lennonc1 Posts: 276 Forumite
    I know, I wonder how many complaints are actually with them now!!
    Principles to be followed by business -
    Integrity - A firm must conduct its business with integrity
    Customers interests - a firm must pay due regard to the interests of customers and treat them fairly
    Communication with clients - a firm must pay due regard to the information needs of its clients, and communicate information to them which is clear fair and not misleading
    Customers trust - a firm must take reasonable care to ensure the suitability of its advice and descretionary decisions for any customer who is entitled to rely upon its judgement.

    There is so many more but these parts in perticular is what nram have definitely not followed!!
  • drussmonkey
    drussmonkey Posts: 52 Forumite
    It's also worth remembering that even if you've received redress and the letter informing you of the redress, the amount stated is less than the total you will receive, because statements have not yet been issued.

    Only when you receive updated statements for the account in question will the interest clock restart. For most of us that might mean and extra £20-50 off depending on the remaining balance on the loan.

    As a result of all this my unsecured loan will redeem next month, and I'm very happy.

    I was particularly narked to be shifted to NRAM, as while I had a Together Mortgage, I was elligible for many others from other providers and simply chose Northern Rock as it had the most appealing deal at the time.

    My major complaint against them now is that they've changed their consent to let charges from a fixed £100 a year to a flexible fee that can be up to £1200 depending on the remaining size of the loan. That is a cynical travesty designed to extract more money from customers, and to help compel them to shift their mortgage to a Buy To Let with a competitor.

    Loses on a Rental Account don't really matter though, as all loses are deferred for tax purposes, so if I'm £1200 down now against my rental income, that's just £1200 of tax I don't pay in the future when renting it out actually is profitable.
  • Hi all,

    I'm a newbie to all of this MSE forum stuff, so apologies if my quesstion has already been addressed in the previous 49 pages.

    I'm very happy with my redress, nearly 4.3k off my balance and as a company I'm so glad they have done this, however, the reduction in my term rather than reduction in monthly payment sits a little badly with me.

    It feels a little like their mistake is still going to benefit them as they are recouping their outstanding balance in a shorter time rather than over the same period I initially agreed.

    Is anyone here savvy enough to know what the small print says and if they are allowed to do this without my consent?

    Don't get me wrong, I'm very happy with the reduction in balance as they have not been compliant and have addressed it directly, and being only 5 and a half years into my 100% mortgage (yes, I bought just as the market crashed :o( ...) i might be somewhere near being possibly able to remortgage in the next few years.
  • cot1198
    cot1198 Posts: 334 Forumite
    blakeyt wrote: »
    Hi all,

    I'm a newbie to all of this MSE forum stuff, so apologies if my quesstion has already been addressed in the previous 49 pages.

    I'm very happy with my redress, nearly 4.3k off my balance and as a company I'm so glad they have done this, however, the reduction in my term rather than reduction in monthly payment sits a little badly with me.

    It feels a little like their mistake is still going to benefit them as they are recouping their outstanding balance in a shorter time rather than over the same period I initially agreed.

    Is anyone here savvy enough to know what the small print says and if they are allowed to do this without my consent?

    Don't get me wrong, I'm very happy with the reduction in balance as they have not been compliant and have addressed it directly, and being only 5 and a half years into my 100% mortgage (yes, I bought just as the market crashed :o( ...) i might be somewhere near being possibly able to remortgage in the next few years.

    Could be worth sending a letter saying you are not happy with the reduction in the term of the loan and would rather keep the term the same and reduce your monthly payments.

    I don't know what response you will get as I think you are the first to raise this question. what I will say though is that I think NRAM should be offering customers a choice in how the redress is given. Some are happy with the term reduced, you would like your monthly payment reduced, some would like arrears paid and others like me would like it paid directly.
  • lennonc1
    lennonc1 Posts: 276 Forumite
    Hi there, I think they really should have consulted us and arranged a solution that we could both agree with, but as the matter stands I still don't think they can change terms or any part of our agreement without consent.
    The small print does say they can change terms etc but only with prior notice of exact amounts and new terms, the only notice we have had is letter to say we are due redress and looking into it.
    They are doing this as quick as possible so many customers won't question their rights and accept as it is still a bonus to us, there are quite a few contesting their method of redress and you are quite within our rights to complain or question what best suit you.
  • cot1198
    cot1198 Posts: 334 Forumite
    lennonc1 wrote: »
    I know, I wonder how many complaints are actually with them now!!
    Principles to be followed by business -
    Integrity - A firm must conduct its business with integrity
    Customers interests - a firm must pay due regard to the interests of customers and treat them fairly
    Communication with clients - a firm must pay due regard to the information needs of its clients, and communicate information to them which is clear fair and not misleading
    Customers trust - a firm must take reasonable care to ensure the suitability of its advice and descretionary decisions for any customer who is entitled to rely upon its judgement.

    There is so many more but these parts in perticular is what nram have definitely not followed!!

    Where did you find these lennonc1?
  • nzmegs
    nzmegs Posts: 1,055 Forumite
    I am also concerned about the reduced term. As an interest only mortgage holder I will now be expected to come up with the full amount of my mortgage sooner.

    Am I right in thinking that the reduced term relates to the entire Together product (the loan plus the mortgage) or does it relate to the loan only?

    if it is the former we will need to sell our home to pay it off at the new date. We could not save enough to cover it all otherwise. given the reduced term.

    if we decided to overpay our mortgage with a view to getting it all paid off - how do we work out how much more we will need to pay? (sorry not directly related...)
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