First Direct fixed to tracker complaint

famousfive_2

Hi all,

Just wanted some opinion to see if its valid for to raise a complaint with First Direct after moving early from 10 year fix (5.xx) to base +1 tracker for lifetime of mortgage this week

When we took out our mortgage in 2001 we were sent a letter that mentioned this guaranteed tracker but nothing when we took the 10 yr fix out in 2006.

When I spoke to bank in 2009 about coming out early and the ERC (around 4k) the default tracker was not mentioned as a potential deal and to stick with what I had. The bank have already admitted this week that I should have been told this then.

I feel lucky that I called again this week to check when fixed period was up and the great advisor made it clear what rate I could get if I came off the fixed rate. I'll have covered the ERC in 6 months of interest payment savings!

Now my argument to them is that 1. The fixed rate agreement doc should have mentioned this when we moved to fixed in 2006 (it does not) and 2. It should have made clear to me in 2009 what my full options were as they did this week.

So, with all that in mind I'm looking to go after the financial difference between paying the ERC in 2009 as iwould have come off then and the reduced interest that I would have saved (around £15k) and my question is do you think I have a valid case...and should I be lowering (or raising) my expectations.

Also it's worth you fixed mortgage people out there checking what rate you'll be put onto as like me you might start saving a few bob!

Thanks in advance

F5

Thrugelmir

Hindsight is a wonderful gift if you are lucky enough to be born with it.
For the majority however, there's no going back.

famousfive_2

Thrugelmir wrote: »

Hindsight is a wonderful gift if you are lucky enough to be born with it.
For the majority however, there's no going back.

:T To paraphrase Oedipus, Hamlet, Lear, and all those guys, "I wish I had known this some time ago.” ... c'est la vie!

_Andy_

"saved (around £15k) and my question is do you think I have a valid case"

No.

michaels

So the OP called up and asked what the ERP would be on his fixed product, he was givne the correct answer but was not advised what the variable rate he woudl be eligible to go on to was. Should this not have been covered in the key facts document when he took the mortgage out?

amnblog

Key facts do not cover the other options available. They are designed to overview one product.

The OP was not given advice he was given information [as is the case with all direct to lender deals] and (back the Shakespeare) 'there's the rub'.

michaels

Surely the key facts would quote the follow on rate at the end of the fixed period even if this did not specifically mention whther or not this rate would also apply if the fix was terminated early.

(Although given this If I were the OP I would have asked whether I was eligible for the original follow on rate as part of any conversation over ditching the fix early as that would of course impact on the cost/benefit analysis)

amnblog

Is not the OP's argument that he was paying a fixed rate when he could have swallowed an ERP and then get on a much lower tracker rate.

This is not covered in the Key Facts.

The OP seems to be of the view that the lender should have told him a lower rate was available some time ago.

Presumably, once off of the fixed rate if the tracker increases the OP will complain about being exposed to rate rises.

holly_hobby

Key facts as discussed, deals with the terms of the product selected - which appears the OP self selected in 2006, a 10 yr fixed product, which would have reverted to the lenders SVR/BMR at the end of the product term.

I think OP what you're saying is in 2006 (when you were choosing your product), FD should have advised you that there was also a lifetime tracker deal available .... and because FD failed to disclose this info, you instead proceeded to effect the 10 yr fixed product, which you now feel was not appropritate ?

But if your 2006 purchase was execution only, they really had no business "pushing" other deals, given that you had self selected (after examining their (then) range of products), a 10 yr fixed - which is what they duly actioned for you.

Fast forward 3 yrs later to 2009, if at that point you merely asked how much the ERC was to exit the product at that time - to which FD told you, but you did not ask for advice regarding their (then) range of products and whether it was worth incurring the ERC to switch to one of those - I really don't see how the lender has been negligent, as advice was neither sought nor provided, at either the time of your 2006 purchase or 2009 ERC enquiry.

If however, you have proof that you asked for advice, at either point, and/or the bank actually advised you to effect the 10 yr fixed, and/or then later told you not to exit the same product early, as there was nothing they had on offer to better it/make it worthy of absorbing the ERC - I would argue that this would certainly be stepping into the realms of advice territory, as oppossed to they simply providing information on their (then) product range.

It all comes down to what service you requested, and/or what they actually said and in what terms. Which may not be the same as what you think or recall they said, or interpreted their comments to mean.

Hope this helps

Holly

amnblog

By definition Holly the Bank does not advise they provide an information only service as OP will see in box 2 of the original KFIs

holly_hobby

Amnblog, whilst the lender may not provide an advice service, this may be inadvertently breached by comments made/language used by the lender's rep during communication with the consumer, in what ever format used.

Which is why, as stated, the OP would need to prove that the lenders comments, when made to a layman, would be accepted by them and constitute advice.

That'll be the tricky part of them, if there are no longer any tele recordings held on file for the period.

Hope this helps

Holly