High exit fees - should I complain

lisyloo

First - Sorry if this has been discussed elsewhere.

I am with A&L.
I will have to pay £300 to leave them for them to send out the deeds and close my account.
The fees were about £160 when I joined them, so they have nearly doubled.

Do I have a case for complaining?

They are allowed to vary the fees to cover reasonable costs, but is £300 reasonable? especially as it has doubled.

I would be interested in any views, but particularly those of mortgage brokers who might have a better view of the work the lender has to do.
Any complaint would have to be on the basis that the fees are not reasonable for the work involved.

Is it worth making a complaint? I guess it's easy to write a letting but I'm a bit loathe to waster time if it's flogging a dead horse.

I would be interested in any opinions.

dougk_2

Write and complain. Argue that one of the reasons why you took the mortgage was because of the fees being reasonable, and now you feel they are not.

You have nothing to loose but a 30p stamp and 5 minutes to write the letter (by the time you have finished reading the the replies to this thread you could have done the letter )

lisyloo

Yes you are right.
That is usually my pragmatic approach.

I am just not sure that they will have any "loyalty" towards customers who are leaving.
So if there isn't something very strong e.g. threat of a legal action, then they have no motivation to reduce it.

I don't have a feel for how strong the case is, but as you say, there's no harm in trying.

lisyloo

My research has turned up this excellent article and standard complaint letter.
Posting it here in case it's of use to someone else.

http://www.thisismoney.co.uk/mortgages/mortgages/article.html?in_article_id=399772&in_page_id=58

mrcow

I had a similar issue with C&G last year. They now charge £199 for any "changes" to a mortgage for existing customers (ie. if you want to amend the term, or switch to a new deal etc). When I took the mortgage out two and a half years earlier, the charge was £60, more than tripling in this time, an increase that to me seems completly out of proportion.

Their argument was that they keep their charges low for new customers, and they had to pay for their new computer system (!)

My argument was that by doing this they were penalising existing customers, in the same way that they keep their better rates for new customers only.

It finally ended up with the fees being waived. My point is that many of these lenders put up their fees and customers don't realise by how much until they have you over a barrel. I only noticed by how much it had increased as I had an out of date charges leaflet in my mortgage file.

C&G and A&L are by no means alone in this, you sign up to their T&Cs and this includes any amendments to associated charges.

Complain for sure, if everyone did then they'd had to have a rethink about the fairness of this.

lisyloo

Seriously, in the name of this site, move lender.

There are a couple of problems with this.
1) All lenders are doing it, so quite difficult to escape it it. At best it will reduce choice.
2) I save several £ks on my mortgage each year by getting the best deal. Should I sacrifice several £ks of savings to get a few quid off the fees. Of course not. Doesn't make it fair though.

Personally I think it's worth the letter for £50 plus it will cause them some cost and hassle and if enough people do it they'll have to re-think.

lisyloo

I am definitely going to do it IF I have to leave my current lender.
It all depends on whether they can do me a deal to make it worth my while staying.

mrcow

Hi Scott,

I know, I know!

The background of it was that they were trying to charge me £199 to switch my interest from annual to daily.

Incidently, daily interest was not available to any customers when I took the mortgage out, and now all new customers of C&G get offered it as standard. Any EXISTING customers have to pay the £199 to switch (if they had advised existing customers when they implemented the change, it would only have cost £60 as they have subsequently tripled the charges). Disgusting!

Anyway, I'm a sucker for a deal really, as I eventually got them to waive the fee (after two weeks of complaints and a letter) and they also put me on a low rate tracker for life of the mortgage (-0.01 followed by 0.45) so I was actually happy with it, as it's better than new C&G customers get (it's exclusive to Lloyds customers).

It's just unfortunate that obviously customers that are more accepting than I will get hit with this fee for amendments to mortgage terms which should be really simple to implement.

Anyway, I'm veering off topic, good luck with your complaint lisyloo.

Rik_S

I`ve mentioned this problem with A&L elsewhere on these forums.

I`ve written a letter complaining, using the template on the `this is money` site as a guide. I think the A&L have got it badly wrong with this stealth charge. I`ve previously had 3 A&L mortgages, i`m a shareholder, my kids have their pocket money accounts with them, however I will never use another A&L product because I do not know what charge that they may introduce.

When A&L began charging customers excessive amounts to leave, I presume that this was an effort to `persaude` customers to stay. However its had the opposite effect with me as I no longer trust them.

A&L have replied to my complaint with a letter reffering to the included leaflet ...that wasn`t included. I phoned them so they could explain the increase & they sent a letter with an included mortgage statement...that wasn`t included.

In general the customer service has been nothing short of abysmal.

lisyloo

good luck with your complaint lisyloo

I may not necessarily be making a complaint because A&L just might offer me a deal to stay with them - in which case I pay no exit fees and have nothing to complain about.

If I do have to pay the fees then I will definitely complain and will update here (but probably not for a few weeks).

MarkyMarkD

Lisy

A&L will let you switch to any "new customer" product on the same terms as a new customer, except that there will be a switch fee of £250. As this is less than the costs you would incur remortgaging (and the £250 is less than the £295 redemption administration charge in any case), it's not a bad option to consider.