Northern Rock Suddenly withdrew overpayments

Stevepm

Hi,

From 2006 to 2008, after depositing and withdrawing over-payments made against my NR mortgage, they decided that I wasnt entitled to withdraw any of my over-payments. My Mortgage statement said I had about £22,000 of over-payments available to withdraw. The next quarters statement said it was Zero and reduced the balance on my unsecured loan. I initially had a secured loan of £90,000 and an unsecured one of around £20,000. This was all arranged through an IFA. When NR refused me any of my £22,000 my business went downhill, I ended paying things on credit cards which spiralled out of control. My IFA basically advised me to max out my credit cards and then she said she would start a process of trying to wipe out the whole debt by putting into place a claim against all the banks when they were clearing debts because of not being able to produce the original application. This was stopped sometime later and I was left with a huge debt. My IFA subsequently didnt want to know me and never answered any calls, text or emails. I wrote to Northen Rock to complain about the way they withdrew the money I had deposited which caused me financial ruin. They wrote back to say they had done nothing wrong and withdrawing the money was in their T & C's and part of their efforts to be responsible lenders. I made a complaint to the Financial Ombudsman but they agreed that Northern Rock had actually done nothing wrong. If anything I had received bad or no advice from my IFA who now will not communicate with me (even though we originally paid her £1995 for a lifetime of service!). Can anyone offer any advice? Should I write to my IFA and claim bad advice, but what do I claim for, compensation? I am now at my wits end if anyone can help. Unfortunately I am now unemployed and struggling after having quite a bit of money and a good business few years ago.

Keekles

With regards to Northern Rock - they haven't done anything wrong, as you've been told. Overpayments are a feature of the product which they're well within their rights to remove; sounds like they notified you also so you haven't really got a leg to stand on, unfortunately.

In terms of your IFA, I would imagine this is a case to speak to a solicitor with. Being a mortgage broker and not an IFA my understanding isn't anywhere close to some others on here, however, on the face of it I can't imagine anyone advising you to max out your credit cards and look to put a claim in later is going to be justified and acceptable.

If I were in your shoes I'd be cataloging any and all correspondence between yourself and your IFA, particularly around this time; and seeking out legal advice with regards to a claim in this situation.

When it comes to the Ombudsman, you have to demonstrate that it's the fault of the IFA in which you have suffered a financial loss.

Hopefully someone else with a better insight will have more knowledge for you. Best of luck.

Thrugelmir

NR in case you missed the news was nationalised in February 2008. Hence the change in the way it operated.

What did NR do to send your business down hill? They had nothing to do with your credit card spending or profitability of your business.

Stevepm

Hi Thanks for your replies.
I do understand what has happened to Northern Rock since we originally took out our mortgage. We now deal with NRAM.

The reason I feel so aggrieved with NR/NRAM is that they did not inform me of any changes they made to requesting over payments back. The figure available to me on my statment read over £22K but before next quarters statement arrived I asked for £10k back. To be denied and told that none of my over-payments were now available was disastrous. I had to try and find £10K within a few weeks to pay staff/suppliers etc. Thats when the panic set in. I thought I was covered but apparently not. Therefore i had to use credit cards to pay things which spiraled out of control. Whether it is down to my naivety/miss-informed/took bad advice I ended up in a financial mess.

Maybe I have to put this down to my mistake for not finding out the exact details and T&C's but I am wondering if my IFA has anything to answer for especially since I paid £2000 for a lifetime of financial advice and paid £6000 for PPI when I was self-employed 6 months later at which time my IFA knew about it?

Thanks