Northern rock loan over £25,000

claret_mike

You need to lodge a complaint with NRAM. You can do so by emailing or telephoning or writing.

It can take 8 weeks for them to state that they feel you have not got a valid complaint. They will then give you a final response which allows you to escalate your complaint to the financial ombudsman FOS.

Fizzy_Fish

It's been over 8 wks since my initial complaint to NRAM, and all I've had back to date is the same holding response that others have received. I've therefore now drafted up my complaint to the FOS on their form, in case this is of help to others - see below. I'll be posting this off in the next few days.

Annoyingly it seems that you are limited to the number of characters that you can put on the FOS form, so if cutting & pasting from this post you may need to first remove the line breaks to get it to fit into the form.

BTW thanks to others who have previously posted letters/complaints - I've taken some bits from these. I ran out of space to fit in the useful points about the FSA Principles, though included this in my original complaint to NRAM, which I'll be submitting alongside the FOS form.


FOS Complaint Form - 'Please tell us what your complaint is about' section

We currently hold an unsecured loan with NRAM, which was taken out in conjunction with a Together mortgage in 2004. The initial loan value was £30,000. The contract that we originally signed indicated that the loan was regulated by the CCA 1974, and subsequent correspondence from Northern Rock/NRAM (including the latest statement that we received on 17 Dec 2012) has reiterated this fact.

However the NRAM website indicates that NRAM are now disputing that the loan is CCA regulated, since the initial loan value was for more than £25,000.

We queried this with NRAM on 14 Dec 2012, and lodged a formal complaint on 22 Dec 2012. As yet we have not had a decision about the status of our loan, however there are others in a similar situation who have been informed by NRAM that their loans are not in fact CCA regulated.

We are therefore escalating our complaint to the FOS for the following reasons:

1. The original contract and subsequent communications significantly misrepresented the product that was apparently sold to us.
2. NRAM is in breach of contract by failing to fulfill the obligations surrounding the CCA regulations, as promised in the loan contract.
3. We are suffering a financial loss as a result of this breach of contract as we are not being afforded the same protection as those with loans under £25,000, or receiving financial redress for non-compliant paperwork


FOS Complaint Form - 'How do you want the business to put things right for you' section

To afford us with protection/rights equivalent and identical to those which would be the case if our loans were regulated by law under the CCA1974 - as promised in the original contract. This would include the financial redress currently being offered to those with similar sub-£25,000 loans.


Alongside the complaint form, I'll be including copies of the original loan agreement, other correspondence mentioning the CCA 1974, and the latest statement from NRAM. Also my original complaint to NRAM (see below) and their holding response letter.


Initial Complaint to NRAM:

Summary of issues

I currently hold an unsecured loan with NRAM, which was initially taken out in conjunction with a Together mortgage in 2004. The loan account number is xxxxxxx, and the loan was initially for £30,000. The contract that we originally signed indicated that the loan was regulated by the Consumer Credit Act 1974, and subsequent correspondence from you (including the statement that I received last week) has reiterated this fact.

Based on the latest communications on your website, you are stating:

• In the case of loans taken out before 6 April 2008, the CCA regulations only apply where the amount we agreed to lend you (the amount of credit) was £25,000 or less.
• With your loan, the amount we agreed to lend you exceeded £25,000, therefore your loan is not regulated under the CCA.
• We are aware that some customers with loans of more than £25,000 have been sent documentation in the past that contained references to the CCA.
• If this applies to you, we apologise for any uncertainty this may have caused.
• We will be writing to all customers with loans of more than £25,000 to explain the situation and to provide updated documentation.

So you have now decided that despite our paperwork stating the loan was regulated under the CCA, that is not the case and you "apologise for any uncertainty". This is not acceptable and I wish to lodge a formal complaint based on the following:

• The original loan paperwork was misleading, as were subsequent communications that indicated the loan was regulated under the CCA
• NRAM is in breach of contract by failing to fulfill the obligations surrounding the CCA regulations, as promised in the loan contract
• We are suffering a financial loss as a result of this breach of contract as we are not being afforded the same protection as those with sub £25,000 loans, and we will not be receiving financial redress for interest accrued during the time the paperwork was non-compliant.

Further detail behind this complaint

I believe that I entered into a regulated loan agreement which prescribed to the terms and conditions of the Consumer Credit Act 1974. As part of this belief, I should have been afforded certain rights and protection, which you are now indicating that I no longer have. If this is the case then I have been mislead by Northern Rock/NRAM to a significant degree, both when taking out the loan initially and in subsequent communications. I would not have knowingly taken out an unregulated loan, without the protection afforded by the CCA 1974.

My reasons for believing that my loan is regulated by the CCA 1974 are outlined below.

• The consistent message provided in the original contract and subsequent communications from Northern Rock/NRAM is that my unsecured loan is CCA regulated and accordingly confers CCA rights to the borrowers. There is nothing on any documentation received that specifies to the contrary:
• The original credit agreement was headed 'Credit agreement regulated by the CCA 1974'
• The original credit agreement included CCA text in the signature box 'This is a credit agreement regulated by the CCA 1974. Sign it only if you want to be bound by its terms'
• On the back of the original agreement it states: 'Your rights - The CCA covers this agreement and lays down certain requirements for your protection which must be satisfied when the agreement is made. If they are not, we cannot enforce the agreement against you without a court order. The Act also gives you a number of rights. You have the right to settle this agreement at any time by giving notice in writing and paying off all amounts payable under the agreement.'
• Letter in 2009 'The new CCA 2006 requires us to provide a statement to each customer party to the mortgage. We will now provide you with duplicate copies of your statement in the same envelope'
• The annual statement which I just received from NRAM on 17 Dec 12 again reiterates that my loan agreement is regulated by the CCA. The document has also changed format to meet the new requirements prescribed by the CCA amendments in 2006.
• A new section has been included on the statement, headed 'The following paragraphs relate to your CCA regulated credit agreement'. Within this are sub-sections about settling your credit agreement early, paying less than the agreed sum, and dispute resolution. Although it doesn't show the amount of credit provided, there is a note on the back saying 'This statement does not contain all the information which you are entitled to receive from us about your agreement...[explains how you can request this if needed]...The information which is missing is the amount of credit provided under your fixed-sum agreement'.

I have become aware that refunds of interest are being made to those who are in the same situation as me but whose loans were for less than £25,000. My statements also failed to include the required information, so given that my loan was apparently regulated by the CCA 1974, I believe that I should also be afforded the same rights to a refund of interest for the specified time period. By denying me these rights, you are causing me financial loss as a direct result.

I feel strongly that I have been misled, and the agreement that I was led to believe to be in place has been misrepresented.

It is not reasonable to expect the average consumer to be aware of the full details behind the CCA, and to recognise that any communications implying CCA protection are invalid due to the loan being for greater than £25,000. What is however reasonable is to expect that a bank (which employs legal professionals) to provide clear and accurate information in important documents such as loan contracts.

Even if the loan is technically outside the scope of the CCA, principles of fair treatment and adherence to contract would reasonably imply that NRAM should treat those with loans over £25,000 in the same manner as those with loans under £25,000.

I refer you to the following FSA Principles, which I believe to be relevant in this case:

• Principle 1 (integrity)
  "A firm must conduct its business with integrity."
• Principle 6 (customers' interests)
  "A firm must pay due regard to the interests of its customers and treat them fairly."
• Principle 7 (communications with clients)
  "A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading."

Required response

I look forward to your response within eight weeks. If this situation is not resolved to my satisfaction, I will be referring this complaint on to the Financial Ombudsman.


I hope that's of help, and any comments/thoughts are appreciated.

Lippyx

Excuse me if this sounds a bit thick, but I was looking on Nram's website last night and read the following statement regarding these loans:

In the case of loans taken out before 6 April 2008, the CCA regulations only apply where the amount we agreed to lend you (the amount of credit) was £25,000 or less.
With your loan, the amount we agreed to lend you exceeded £25,000, therefore your loan is not affected by this problem

I'm a little confused? How can my loan of over 25k taken out in 2004 NOT be affected by this CCA problem?

Lippyx

Also, I have never recieved a letter from Nram regarding this issue. Now I no longer am with the ex, and have no contact with him, but Nram do have my address and have been able to send me threatening letters about legal action as my ex has been missing payments!

Fizzy_Fish

Lippyx wrote: »

Excuse me if this sounds a bit thick, but I was looking on Nram's website last night and read the following statement regarding these loans:

In the case of loans taken out before 6 April 2008, the CCA regulations only apply where the amount we agreed to lend you (the amount of credit) was £25,000 or less.
With your loan, the amount we agreed to lend you exceeded £25,000, therefore your loan is not affected by this problem

I'm a little confused? How can my loan of over 25k taken out in 2004 NOT be affected by this CCA problem?

You're not alone in thinking this, which is why this thread is now up to 16 pages!

Most of us have loans of over £25k initial value, which apparently shouldn't be regulated by the CCA since at the time of being taken out the CCA only covered loans under £25k. The problem is that we were not made aware of this at the time, and contracts/paperwork from Northern Rock/NRAM all said that our loans were CCA regulated.

If you are in the same situation, I would suggest that you lodge a complaint with NRAM in the first instance. If they are unable to resolve your issue, you can escalate to the Financial Ombudsman - see earlier posts for more detail.

dw1982

Hi,
We took out a Together Mortgage in sept 2007, the unsecured loan part was approx £15000 although we can borrow up to £30000 at any time( without any credit checks), does anybody know how this affects the under/over £25000 issue,can't find the original paperwork and as of Today still no letter.

Thanks

Chrisb80

Just in case anyone is interested...

I have sent my complaint into the FOS and already had a response in writing back from them (I asked for an email copy of their letter as well as a hard copy in the post). They state that they have contacted NRAM for their evidence and once received one of their adjudicators will begin to investigate. They confirm that they will be in touch within 12 weeks to introduce themselves and discuss my complaint in more detail.

At least now that the FOS are involved NRAM will be forced to actually address our issues and take them seriously. I wonder if they have just tried to sweep them under the carpet thinking that we wont bother getting the FOS involved. Oh well, lets see!!

I will update on this forum when I know more....

NikkeiPositivity

I'm going to be writing my complaint to NRAM today. Just out of curiosity, did anyone query the fact that NRAM have been made aware by many customers in the past that they've been quoting cca1974 on statements etc and that they have failed to correct the issue (I've seen posts from 2009 on forums quoting this) They could have cleared up this error years ago but failed to act and continued to mislead customers!!!!

Fizzy_Fish

NikkeiPositivity wrote: »

I'm going to be writing my complaint to NRAM today. Just out of curiosity, did anyone query the fact that NRAM have been made aware by many customers in the past that they've been quoting cca1974 on statements etc and that they have failed to correct the issue (I've seen posts from 2009 on forums quoting this) They could have cleared up this error years ago but failed to act and continued to mislead customers!!!!

An interesting point. Maybe they were afraid to draw attention to it??

tinystar2001

dw1982 wrote: »

Hi,
We took out a Together Mortgage in sept 2007, the unsecured loan part was approx £15000 although we can borrow up to £30000 at any time( without any credit checks), does anybody know how this affects the under/over £25000 issue,can't find the original paperwork and as of Today still no letter.

Thanks

I also have this issue. We were offered £30000 but only took out £22000. I previously asked the same question but nobody seems to know. I was waiting for the letter from NRAM before acting, but as yet have not received any correspondence from them, so will soon be writing to ask them the same question. Would be good to know if you hear anything though.