Mortgage Company charging for insurance not taken

Gibsy

Hi

We are in the process of moving our mortgage from Nationwide to Platform having come to the end of our fixed term deal with Nationwide.

We have a very good offer from Platform but I am concerned by one of their conditions. The mortgage seems to be linked to a buildings insurance policy with Legal and Genral. We do not need this as we are leasehold and the management company arrange buildings insurance for our building.

Platform want to charge £30 for us NOT taking the insurance. It is an administration fee but I cannot understand what admin is involved in not supplying a service. This seems completely unethical to me but I believe Platform offer mortgages from the Co-op who have a mandate for ethical banking.

Given that we are paying a £950 arrangement fee it seems wrong to then charge extra for a service I don't want and didn't ask for in the first place.

I know £30 is not a lot of money but it is the principle. Has anyone else experienced this?

Thanks

Leon_W

It's pretty standard. The £30 will cover the costs of them checking that the insurance policy meets their requirements, not yours.

Platform do not want any property they lend on being insured by some shonky outfit who wont pay up.

kingstreet

Many lenders don't charge for this on leasehold property as you have no choice but to be insured by the freeholder's block policy.

However, this is applied in all cases by Platform.

If it's a major concern, find a lender which does not make such a charge.

ACG

Platform are part of co-op.
Charging a fee you dont think they should be charging doesnt mean it is unethical - it just means you dont agree with it.

They are a business and do need to make money. Having worked for co-op mortgages i can say they are proud of their ethics and it is something they do promote a lot internally.

With regards to their ethics, its more about what they invest in. If your going to talk about their ethics, you should at least know what they are.

The Co-operative Bank’s Ethical Policy is based on extensive consultation with customers and reflects their ethical concerns surrounding how their money should and should not be invested. It also informs the The Co‑operative Bank's choice of partners and suppliers.
The policy covers the following issues:

• Human Rights
• The Arms Trade
• Corporate Responsibility and Global Trade
• Genetic Modification
• Social Enterprise
• Ecological Impact
• Animal Welfare

Anyway, the admin charge is something charged by a lot of lenders. Having worked for co-op bank, i do know that they do spend time/money ensuring buildings on their books do have Buildings insurance in place, so its not just a fee that goes into their back pocket - which might go some way to helping you accept the fee.

The other options are to ask if they will waive it as the management company have it in place or look for another lender - but platform do have some good rates at the minute. Its likely to cost you more than £30 to move elsewhere.

kingstreet

FWIW Co-Op inherited Platform. It was Britannia's off-balance sheet subsidiary.

Gibsy

I've been banking with Coop or smile for 13 years now so I am completely aware of all of their trading ethics, what they invest in and how they operate. This is exactly why it seemed so strange.

The explanation from Leon W makes sense, the Platform documentation simply does not explain why they levy this charge so it is not easy to understand and seems unjustified. Smile and Coop documentation is always crystal clear but perhaps that hasn't filtered through completely to Platform yet.

We provided full information on our buildings insurance to the solicitor acting on behalf of Platform.

Like I say, £30 is not a lot of money in the grand scheme of things when it comes to mortgages. I simply didn't understand the charge and what it was for.

kingstreet

The don't get commission, if you don't buy their insurance.

They charge you £30 to make up for it.

That's what I've always thought.