Legal challenge to Skipton Building Society SVR mortgage rate hike

Legal_Beagle

I am a homeowner affected by the Skipton Building Society reneging on its pledge to never have its Standard Variable Rate set more than 3% above Base Rate. This guarantee was stated twice in the T&C's of my Skipton SVR mortgage and repeated in March 2009 by the Chief Executive of Skipton, David Cutter. Less than a year later, in January 2010, Skipton tore up this guarantee and hiked the rates on my mortgage citing "exceptional circumstances" due to the economic downturn.

I wish to challenge the SVR rate hike by Skipton at court. To this end, I would like to get in touch with other borrowers similarly affected by this unjust rate increase by Skipton. There is strength in numbers so if you are a current Skipton borrower affected by the SVR rate hike or you were an affected Skipton borrower (you may have since remortgaged or sold the property), I would like to hear from you.

Even if you were formerly affected but have since remortgaged or sold the property, you could still benefit from a win at court as a court would award overpayments backdated to the date of the SVR increase.

This is essentially a call to arms for all Skipton borrowers who have been cheated by the Skipton Building Society reneging on the terms and conditions of the SVR mortgages that we signed up to prior to January 2010. The only way to obtain redress for this injustice is through the courts. I have a roadmap in mind to achieve that redress.

Please get in touch if you have been affected by this unlawful rate hike.

ACG

Legal_Beagle wrote: »

The only way to obtain redress for this injustice is through the courts. I have a roadmap in mind to achieve that redress.

Have you tried the Financial ombudsman? Court may not be the only option and the FOS is more likely to look at things from a moral perspective than a legal one. If you fail with the FoS you still have court to fall back on. If you fail to win at court then you do not have the FoS to fall back on.

antrobus

I believe that a website known as property118 is already seeking to organise a class action against Skipton, although there was a firm of solicitors that tried and (presumably) failed to get an earlier attempt to organise one off the ground.

Thrugelmir

Leon Kaye were the solicitors.

Leon Kaye Solicitors – Skipton Action Group Press Release 17 March 2010

We have now received Counsel’s advice regarding the potential claim against Skipton Building Society (‘Skipton’) for its refusal to honour its Guaranteed Standard Variable Rate (‘SVR’).

Skipton had guaranteed approximately 65,000 people that its SVR would not be more than 3% points above the Bank of England base rate. However as of 1st March 2010 Skipton increased its SVR to 4.95% claiming that the SVR of 3%:
“was not sustainable in the long term particularly in view of the cost of attracting retail funding.

Fundamentally, it is in reaction to the impact on the UK savings market of the Bank Base Rate plummeting to such an unprecedented level of 0.5%”.

As a result of the above Skipton argue that the “exceptional circumstances” clause in borrower contracts is triggered allowing Skipton to not honour the “Guaranteed” lower rate.

Having received Counsels advice we feel that those borrowers who contracted to Skiptons Guaranteed SVR have a potential claim pursuant to the Unfair Terms in Consumer Contracts Regulations 1999.

We have been approached by over 100 people who are interested in making a claim against Skipton. We are in the process of running four test cases both with the FSA and the Office of Fair Trading and are considering issuing a Class Action claim in the High Court with a view to obtaining relief in the form of a declaration that the “exceptional circumstances” term is unfair under the 1999 Regulations and thus unenforceable, together with a claim for the sums overpaid to date by Skiptons borrowers.

We have contacted Skipton, who are represented by DLA Piper, with a Letter Before Action and expect a full response within the next 30 days.

No more was heard.

Never gained traction with little more than a hundred people joining the action group. Whereas some 64,000 borrowers were affected.

Mark_Alexander

I have had a good look at the PR which lead to several media articles mentioning the efforts of Leon Kaye solicitors to raise the profile of the campaign against the Skipton and I have to say that I think they did a great job on that.

Where I think they could have done much better was in terms of motivating and directing the 100 or so borrowers who signed up.

The legal action campaign group organised by Property118 against West Brom raised nearly £500,000 and is going ahead yet it affected only 1 tenth of the number of borrowers in comparison to the Skipton case. The reason it succeeded is that the original core of borrowers were encouraged to become an integral part of the sales and marketing process to recruit additional support. Once that was achieved the group became an unstoppable marketing machine.

Legal_Beagle

Mark,

Apart from the lapse of time (4 years since the Skipton rate increase) compared to the 6 months or so with the West Brom rate increase, do you have any theories or ideas why more affected Skipton borrowers aren't joining together to challenge the Skipton rate increase? Apparently over 64,000 Skipton borrowers were affected compared to 6,700 borrowers West Brom borrowers yet the West Brom borrowers have raised almost £500,000 to challenge the rate hike in court.

What can we do as Skipton borrowers to achieve the same success in raising the money to fund a court case? I believe Property118 is now organising a class action against Skipton in a similar fashion to the class action it organised against West Brom?

Mark_Alexander

Legal_Beagle wrote: »

Mark,

Apart from the lapse of time (4 years since the Skipton rate increase) compared to the 6 months or so with the West Brom rate increase, do you have any theories or ideas why more affected Skipton borrowers aren't joining together to challenge the Skipton rate increase? Apparently over 64,000 Skipton borrowers were affected compared to 6,700 borrowers West Brom borrowers yet the West Brom borrowers have raised almost £500,000 to challenge the rate hike in court.

What can we do as Skipton borrowers to achieve the same success in raising the money to fund a court case? I believe Property118 is now organising a class action against Skipton in a similar fashion to the class action it organised against West Brom?

That's a great question!

The success of the West Brom campaign belongs to its members.

The campiagn started with just a few people who took it upon themselves to make as much noise as possible and to encourage others to join. They lobbied MP's, journalists, posted on Facebook, Tweeted, attended events and so the list goes on.

They asked all the right questions of their legal team and once they were satisfied that the costs and the efforts were worthwhile they became the marketing arm of the campaign. Their enthusiasm became contagious.

The initial phase of the campaign has nothing whatsoever to do with raising money. It's all about spreading awareness and motivating others to participate in further recruitment. Once the momentum gets going an unstoppable army is built.

We are gathering names of interested parties at Property118 right now. For details search Google for "Property118 Skipton Building Society Legal Action"

Slawit

Legal_Beagle wrote: »

Mark,

Apart from the lapse of time (4 years since the Skipton rate increase) compared to the 6 months or so with the West Brom rate increase, do you have any theories or ideas why more affected Skipton borrowers aren't joining together to challenge the Skipton rate increase? Apparently over 64,000 Skipton borrowers were affected compared to 6,700 borrowers West Brom borrowers yet the West Brom borrowers have raised almost £500,000 to challenge the rate hike in court.

What can we do as Skipton borrowers to achieve the same success in raising the money to fund a court case? I believe Property118 is now organising a class action against Skipton in a similar fashion to the class action it organised against West Brom?

I am one of the affected West Brom customers and and also part of the legal action against them. Just to re-iterate the above point. From a base of 6700 customers we have raised £500,000 in a short space of time.

With a customer base of 64,000 this should be easily achieved. The most important part is to have a central focus, a hub in to which everyone can feed. For us it was property 118. Through this forum we were able to co-ordinate actions, delegate responsibility, generate support. With the right motivation and some key characters to drive the movement then you have every chance of success. All the best.

BeetrootMike

This sounds like another clear cut case of a financial institution flexing their muscles and riding roughshot over their customers. When will the people in charge of these organisations learn that treating customers badly is bad for business? Eventually, it all catches up with you and I very much hope that that the time of reckoning is fast approaching for Skipton. I wish all the borrowers affected by this rate hike the best of luck in pulling the numbers together to put up an effective challenge. If you are one of those affected Skipton borrowers reading this forum now, don't hold back, sign up now. Good early momentum builds more momentum later on and you can use the current excellent West Brom class action publicity to your advantage too!