MSE News: Northern Rock told to refund 40,000 over incorrect loan documents

Former_MSE_Helen

"More than 40,000 Northern Rock borrowers are set to receive compensation following a High Court ruling today..."

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Northern Rock told to refund 40,000 over incorrect loan documents




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joeblack066

I think that this affects me. Or should I say, I hope that it affects me!! Now I just need to find out how I go about it!

lennonc1

Great news to all us long suffering Nram customers...
Will take them a while to sort it out and refund people but still great news..

fermi

http://www.ukar.co.uk/media-centre/press-releases/2014/10-12-2014?page=1

High Court Decision – NRAM Declaratory Proceedings
NRAM plc v McAdam & Hartley

10 Dec 2014

NRAM plc

We note the High Courts decision today in relation to the declaratory proceedings brought by NRAM plc.

NRAM plc previously disclosed that it had commenced declaratory proceedings in the High Court to determine whether customers who took out unsecured loans above the Consumer Credit Act 1974 (CCA) regulated cap of GBP 25,000 and that were written on CCA documentation are entitled to similar rights and remedies as those who took out loans that were regulated by the CCA.

The High Court has today declared that the defendants to the proceedings are contractually entitled to the rights and remedies applicable to a regulated agreement under the CCA in force from time to time so far as capable of being applied to a non-regulated agreement. Accordingly NRAM was in breach of its obligations by issuing the defendants with statements which do not comply with the requirements set out in section 77A of the CCA and by not re-crediting to them the interest or default sums paid by them during the period of non-compliance.

NRAM is considering the impact of the declaration on all customers who took out unsecured loans for over GBP 25,000 which were written on CCA documentation and is also taking legal advice on whether to appeal the decision. Based on the High Court ruling, NRAM will make an immediate provision for the current cost to remediate the customer accounts concerned which is approximately GBP 261m, plus associated costs. All future interest accruing on these accounts, which currently amounts to approximately GBP 3m per month, will also be provided against until resolution is achieved.

Richard Banks, Chief Executive Officer of UKAR, commented:

“We brought this case to the High Court because we are determined to act in full accordance with the law and do the right thing for both customers and taxpayers. We are disappointed by the decision because no detriment has been suffered by customers. We are now considering the impact of the judgment and taking legal advice on whether to appeal. Customers do not need to act at this stage. If any redress becomes due, we will write to all those affected to advise on next steps.”

sax11

interesting as i took out my first mortgage, no deposit needed etc with northern rock. i shall keep an interest in this news.

cheapround

We were one of the Northern Rock Together loan customers, until we ended up in an IVA. Our IVA company who have been claiming back PPI for the last two years.....will love this. ;)

jimbo5661

Great news I think! My unsecured part of my NR loan was 26,400 so I missed out on the redress last time... I took it out in 2004 and redeemed in 2012. If this happens I wonder what sort of refund I could expect?

Mazehill

This is a bit of a long story & ALERT - it might send you to sleep! .


My husband and I took out a Together 2 year fixed secured mortgage and unsecured loan from Northern Rock in September 2003 on a 4.9% interest rate , our only chance of finding a place together in a small seaside town where flats were cheapish. The interest we paid we were told would rise after two years to the standard variable rate. The mortgage was for 15 years (we were in our early 50s.) In 2006, Northern Rock wrote to us to say the fixed deal was ending and offered us a different together deal with all sorts of complex bells and whistles attached - to sum up, securing a revised mortgage at 95% of the value of our home and the unsecured loan amount changed to £26,500. The cost of the secured loan therefore increased. We were told in documentation as we had been in 2003, with the original loan, that if the secured mortgage was paid off in full, the rate of interest charged for would rise to 8% above the variable base rate. We paid off the secured mortgage early in 2008 when we moved home, paying charges, - £3,600 or so early exit penalty and a further £1000 for something else, and another fee. The unsecured together loan was originally £30,000 in 2003, and in 2008 was de-linked from the mortgage and was still £26,824. Immediately my interest rates shot up to 8% above standard variable base rate making it a whopping 15.59%. I was paying £299 per month for it over 12 years. I got a good job for a while and paid off a lump sum of around £5000 reducing the monthly amount to £193 but it still takes ages to reduce the capital. Over the years, Northern Rock (then NRAM) failed to pass on the full recommendations of the Government and the Bank of England on interest rate cuts. It took about 5 years I think for the 15.59% to reduce to 13.25%. Today I checked my original offer and agreement. They said that my unsecured loan interest rates was regulated by the "Consumer Credit Act 1974".


They ignored my protests when I wrote letters and were quite snotty about the Government recommendations and the Bank of England


When Northern Rock (NRAM) state that the wording of their agreements was not to the" detriment of the consumer" I think they are wrong. Anything which is unclear is to the detriment of the consumer. Anything that states it is covered by the Consumer Credit Act 1974 and it isn't, is to the detriment of the consumer because it makes it seem all is above board and that the customer is covered if anything goes wrong and vice versa. Quite apart from this however is that the way Northern Rock behaved and NRAM has behaved as banks has been hugely detrimental to the taxpayer, to many individuals, to junior staff who lost jobs, and was extremely damaging to the country.

sax11

i knew i kept old paperwork for a reason

seems i have a together mortgage & an unsecured loan

no doubt the !!!!!!s will have already written to the ex about it

damn - just read the 25K part

booooooooo

Mazehill

What is the 25K part? I thought the current ruling includes applies to 25K -30K and the previous compensation ruling applied to 25K?

Mazehill

I think that they will appeal this, and it will drag out like PPI and if that fails, any compensation will not be direct but will be a change in how people repay their unsecured reduction of the say.
Unless, of course, the compensation amount is more than is left on the loan.