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Northern rock loan over £25,000

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  • kaybo69
    kaybo69 Posts: 43 Forumite
    edited 3 April 2013 at 10:38AM
    I have drafted a letter to send to NRAM and UKAR. I don't think it will result in any direct action but hope it will help pile on the pressure for them to address our complaints with something more than a standard letter:

    I have previously raised a complaint against the terms and conditions of my Together Mortgage with regards delinking.
    However I do not feel your response was adequate nor addressed my key concerns. Therefore I am raising my complaint again, alongside an additional complaint on a topic which has become an issue to me since your last correspondence.
    A copy of my complaints will be sent to the UKAR Chief Executive (Richard Banks) as well as BBC Watchdog to support the increasing awareness of UKAR/NRAM’s unfair conduct.

    My complaints are on the following topics:

    Increase in interest rate when delinking
    Non regulation of unsecured loans over £25k


    Increase in interest when Delinking

    It is my view that the hike in interest rate when delinking is unfair and is causing undue financial loss to myself and others bound by the terms and conditions of the Together mortgage.

    The clause was enforced when Northern Rock was able to offer new products. Therefore there would be no need to delink as there was the option to remortgage with Northern Rock.

    Now that NRAM has been set up and no new products are being offered, it is wholly unfair to continue to enforce these terms.

    The clause also conflicts with UKAR’s main objective which is to wind down the ‘bad’ mortgage book of Northern Rock and Bradford and Bingley’s.
    This is because ‘customers’ who don’t need to move house or remortgage will just hang on to the mortgage on SVR indefinitely, whereas if these terms were removed they may jump at the opportunity to remortgage elsewhere, and in effect speed up the run off of these mortgages.

    My suggestions and related consequences to avert unfavourable publicity and expensive legal costs, as well as remove any further pain from customers who are already in a bad position with these mortgages, are as follows:
    • Remove the terms and conditions which increase interest rates on delinking.
      • This would create more likelihood of customers redeeming their mortgages early, speeding up the delivery of UKAR’s main objective.
      • It would also give UKAR the opportunity to make customers sign new agreements and address those agreements over £25k not being regulated by the 1974 CCA.
    • Convert the increase in interest to capital instead.
      • Whilst it still would create the additional cash flow pressure to your customers who delink as an increase in interest would, it would help speed up delivery of UKAR’s main objective whilst at the same time benefit the customer by way of reducing their debt quicker.
    • I also suggest that whether or not any action is taken to change these terms and conditions, that the current interest rates are capped against any increases in the Bank of England base rate. The Base Rate is guaranteed to increase during the next 3 to 5 years and so it would be even more crippling to customers who have no choice other than to delink as they would incur the interest rate hike as per the terms and conditions and then incur further increases as result of an increase in the Base Rate.

    I do not believe that these unsecured loans become more risky when delinked as they are already unsecured in the first place. By increasing the interest rate your organisation is effectively making them more risky as it will ultimately create additional financial pressure on your customers as well as attracting unfavourable media attention which will lead to your management being pressurised by external parties.

    It is my view that a full review of UKAR’s main objectives should be carried out which includes a focus on minimising the pain for their unfortunate customers who had no choice but to migrate when they were moved to the bad bank and subsequently have no offerings of new products, yet are bound by the same terms and conditions which are now irrelevant and wholly unfair.


    Non regulation of unsecured loans over £25k

    As a result of the recent redress relating to loans under £25k it has come to my attention that although my loan is over £25k my loan documents say that it is regulated by the Credit Consumer Act of 1974, whilst I believe that this is incorrect.

    I therefore suggest that I have been misled during the application process for this Together Mortgage.
    If I had known that the loan was unregulated I would not have borrowed over £25k as I would not have wanted to enter into an agreement which was not regulated by the 1974 CCA especially with regards Part IX of the act, Judicial Control.
    I therefore see this as negligence on your part and that my loan agreement is unenforceable. I am happy to repay my loan over the remainder of the term, however I challenge paying interest on it and being bound by its specific terms and conditions, especially the one relating to the increase in interest when delinking.


    I hereby conclude my complaints and hope to achieve the following objectives:
    • UKAR reviews its overall objectives taking into my above points and taking action to reduce unfavourable impact on its customers.
    • The terms and conditions of delinking are removed or improved as suggested above
    • Positive action is taken in relation to the misleading regulatory information I was given when applying for the Together Mortgage i.e the 1974 CCA.
    I anticipate that if no positive action is seen to be taken which may benefit all parties involved, external action will be taken that is detrimental to the performance and reputation of UKAR and its management team.

    I look forward to hearing your response to my complaint and hope it is not another of your standard letters. As momentum is building with external action groups and media awareness of the way you conduct your business is increasing I would suggest favourable action is made in response to my complaints.


    Kind Regards
  • lennonc1
    lennonc1 Posts: 276 Forumite
    Great info thanks, can this be used for website etc.
  • kaybo69
    kaybo69 Posts: 43 Forumite
    No problem, I'd be happy for you to extract my main points, observations and suggestions should you wish
    Cheers
  • Mthomas1986
    Mthomas1986 Posts: 10 Forumite
    kaybo69 wrote: »
    No problem, I'd be happy for you to extract my main points, observations and suggestions should you wish
    Cheers

    Yep I like this.

    Just registered for Lennonc' site as well.
  • I received a reply to my complaint yesterday, saying that they do not currently know the answer to my question. I have posted before, as I am in a slightly different position, having been offered a loan for £30k, but only taking out £22k. My question was which group do I fall in to, over 25k or under, with my paperwork stating it is CCA regulated nonetheless. I thought they would know the answer to this but I think it is quite telling that even with this they don't know where they stand.
  • lennonc1
    lennonc1 Posts: 276 Forumite
    kaybo69 wrote: »
    No problem, I'd be happy for you to extract my main points, observations and suggestions should you wish
    Cheers

    Thank you very much, I am trying to compile a letter of action to go to UKAR on behalf of NRAM Action Group. If you have any ideas please feel free to share.

    C
  • I've been following this forum with interest since the start of the year but haven't yet filed a complaint with NRAM around my £30k unsecured loan which I took as part of a Together mortgage in July 2007.

    I am cheesed off about two main points with NRAM:

    1. Even though all of my statements have included the same incorrect information as everyone else, because my loan is over £25k I am not entitled to any redress because it turns out my loan isn't CCA regulated even though all of my documentation says it is! Thanks for telling me that my loan wasn't covered NRAM!

    2. The fact that after having had to move my mortgage to fix it as they wouldn't offer me another mortgage I obviously faced the 8% interest rate rise on the unsecured loan and have been paying this extortionate rate ever since! We don't have enough equity in the house to drop the loan to £25k and move it elsewhere so we are stuck with NRAM! Now when I took out the Together mortgage I understood that if I delinked the mortgage and unsecured loan the interest on the loan would increase but naively expected to be able to move to another fixed rate Together mortgage when the initial fixed rate ended! It annoys the hell out of me that I suffer financially and am stuck with this massive loan over my head (that I pay about a pound a year off!) when I had no choice but to move the mortgage in order to continue to have a fixed rate mortgage (I need this for my peace of mind).

    Anyway, now I've got that lot off my chest I wonder if you guys can give me some advice please about the best way to complain about all this to NRAM? I have been holding off as I wanted to word it correctly and in a way that they wouldn't be able to easily fob me off so any letter templates/wording suggestions would be greatly appreciated.

    Thank you :)
  • IainHL
    IainHL Posts: 227 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Hello Chinny, and welcome to the MSE forums. I would suggest you adapt the words of Fizzy Fish's complaint to NRAM from post #303 in this thread to your circumstances: http://forums.moneysavingexpert.com/showpost.php?p=59454715&postcount=303.
  • cramg
    cramg Posts: 88 Forumite
    I've been following this thread with interest.
    We took out an unsecured loan, £30K in 2007 with Northern Rock.

    Having read the info on the NRAM website about loans over £25K having no issues, we thought no more.

    Then, reading through our latest mortgage & loan statement, the bottom of the page displays two paragraphs and states they are extracts from our CCA and we should refer to our CCA for full details regarding the mortgage and loan.........

    I think we will write direct to the FOS and bypass NRAM and see where that takes us.
  • IainHL
    IainHL Posts: 227 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    cramg wrote: »
    I think we will write direct to the FOS and bypass NRAM and see where that takes us.
    The simple answer to that is nowhere. From the FOS website (http://www.financial-ombudsman.org.uk/consumer/complaints.htm):

    how to complain

    1. complain to your bank, insurance company or finance firm

    It's important that you complain first to the business you're unhappy with – and give them a chance to look into your problem. They have eight weeks to do this.
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