MSE News: Thousands of Santander mortgage holders could get payouts after blunder

almond

TJI999 wrote: »

I have received a reply from Santander rejecting my claim which I find odd as when I initially spoke to someone they implied I may well have a claim.
I had a 2yr fixed rate mortgage in 2008 at 5.84%. They are saying the margin increase affected my mortgage when the mortgage reverted to the SVR. My issue is that I was not made aware of this increase as I received no notification of it.
As I have not changed mortgages since, they have decided that on the balance of probabilities I would not have changed at the time. This isn't the case though as I definitely would have looked at other options at the time had I known and fully understood, particularly as I got married in 2009 and circumstances changed.
Is it the case that if on reversion to the SVR you didn't immediately change mortgages, you do not have a case?? I'm very confused about just who is able to claim with this.
I'm considering going to the ombudsman - does anyone think it's worth it?

looks like the same letters are being sent, I haven't had time to get my head round this but intend to take it further , wonder whether its worth us all drafting the same letter and sending it to them

TheMightySwordfish

Nothing received here, yet. Think a standard response would do no harm. Thanks for your replies.

almond

shall we wait till Wednesday to see if anybody else gets the same letter, then draft a standard reply

almond

Two_steps_forward... wrote: »

Happy to help out but a standard response seems tricky. Don't you think all of our circumstances are different? I am keen to keep telling them EXACTLY how their actions were, and continue to be, to our detriment.

I think we have had a standard letter sent out and dates etc have been changed to fit with our details, I will scan mine tomorrow

KiwiCoop

I'm another in the M001 camp but haven't complained as yet; kind of waiting to see how things unfold.

My argument to Santander's suggestion that someone probably wouldn't have moved at the time because they haven't changed since is that it was clear by Dec 2008 where the house market was heading (esp. here in Northern Ireland) and that many coming out of a fix in the future were likely to be in negative equity and therefore SVR mortgage prisoners for a long time.

An ERC-free escape to another lender at the time could have been just the ticket.

almond

the reason I haven't moved is since coming off the fixed rate I am £50 a month better off, I intend selling the house in a couple of years , it was easy getting a mortgage back in 2008 but things have changed now

almond

fishing_mad wrote: »

If I read you correctly, you are saying that Santander has "decided on the balance of possibilities (you) would not have changed at the time".
This sounds like an arbitrary decision - hardly a defensible argument and based on tenuous financial speculation.

I agree with Two steps' comments that the bottom line is that they failed to notify customers of the increase in the cap margin.

As a result, customers were denied the chance to consider action which would have been in their own - and not Santander's - interests.

and breach of contract, I am going to try and start the letter today

TJI999

Thanks for your thoughts everyone.
Yes what they've said is that because I have not changed mortgage since (ie have continued on the SVR rate for the last few years) then I would not have changed at the time even if I had known.
I don't think this is fair and definitely received no notification of the increase. I guess I should have paid more attention to the SVR rate and worked things out but its my first mortgage and to be honest I'm a bit green in these matters.
I am definitely going to go to the ombudsman. Not sure how to word things though.

TJI999

By the way - if this helps here's the letter:-

Having conducted a thorough investigation I regret I am unable to uphold your complaints as considering your circumstances at the time as well as the action you have taken with your mortgage since 3 Sept 2009, on the balance of probabilities I do not consider you would have switched to an alternative mortgage.
When you initialy chose the mortgage product you were on in 2008, you opted for a 2 year Fixed Rate of 5.84%. The Cap Margin would not generally have been promoted as a specific benefit of your mortgage product and I believe you would have chosen this rate as it met your overall requirements at the time, which could have included the type of interest charged and the amount of time the introductory rate lasted for.
The margin increase affected your mortgage when your initial fixed rate expired and you reverted to paying interest at the SVR. You were free to remortgage to another lender at this point if you were unhappy with the rate you were being charged. Prior to reverting to the SVR you were informed about the specific rate and payments you would be making. As you subsequently remained on the SVR for 45 months it is reasonable that, on the balance of probabilities, you were happy with the rate of interest you were paying and would therefore not have been motivated to move to an alternative product as a result of the margin change. As a result you are not entitled to redress.

This implies that only those who reverted to another mortgage on commencing the SVR rate (after the fixed period ended) are entitled to redress.

crusaderstyle

I've been reading this thread with interest and have had many telephone conversations with Santander on the matter.

I did receive the 'affected but unaffected' letter from Santander (M003) and they begrudgingly sent me a questionnaire.

In 2006 I had signed up to a 5 year fixed rate at 5.19% finishing in 2011.
From the letter I received and from looking at the 2004 Standard Mortgage Conditions, I don't think those with a fixed rate mortage had three months where they could exit without paying ERC's, so unfortunately, I don't think I can hold this against them without them rejecting the 'complaint' automatically. I'd like to be wrong though but I have made Santander clarify this point at least three times!

I agree that they do also seem to be 'writing off' those that never switched their mortages when they went onto the SVR and I would fall within this category but this is where I have really detailed my personal circumstances - three pages of it!!

The way I see it is they were in breach of contract - of that there can be no denial from them. I think this would automatically make them liable for some form of compensatory payment for all of the 270,000 customers that weren't informed about the cap margin increase so I would sugest that all those rejected refer the matter to the Ombudsman. I thin k Santander are banking on this and hope alot of us don't bother!

Mine is a complicated situation whereby redundancies etc caused me to need to go to interest only in 2009. I had made enquiries in 2008 about paying the ERC's (out of redundancy payment) to get out of the fixed rate and benefit from lower rates elsewhere but I made the decision that I would be paying much less anyway when it converted to the SVR rate. This was misguided of course as I was not aware of the margin increase and based my calculations on the rate detailed in my contract.

By 2011 my credit rating had been negatively affected and I have been unable to move to another lender since and as the housing market has not been great it looks as though I missed the opportunity to sell at a good price which was another avenue I explored in 2008. I continue to pay the interest only payment whch is of course based on their current SVR. Awful situation to be and will not change for a while yet. :eek:

Who's to say things wouldn't have played out the same way had Santander advised me of the increase in the cap? But Santander took away our ability to make well informed choices and they need to recognise that.

Good luck guys - don't give up. That's what they're hoping for! :T