Does First Direct discriminate against Armed Forces?

betmunch

But its only discrimination if theres a different rule for forces personnel than there is for say an office worker on a fixed term

If the office worker contract stated an end date and they let him take a mortgage past that date then you have a case for discrimination against the forces client

abijanzo

Thanks all for the responses.


Whilst I appreciate that it may not appear discriminatory as the policy only affects those with fixed term contracts, this means it DOES apply to ALL Forces personnel.


Every Serviceman/woman joins up for a period of between 6 and 22 years, depending on their trade, Corps/Regt, commission etc. This means that FD policy will not lend to ANY Service personnel for a 25 year term (although I currently have a 25 year mortgage with them - go figure).


To add insult to injury though, if you do a full 22+ and get your immediate pension and lump sum, they will not take the lump sum into account as a means to pay off a chunk of the capital. So they penalise you for being in the Forces for a fixed term, but they will not accept the commensurate benefits that this fixed term provides!


I had another very lengthy chat with their customer relations dept yesterday and they are absolutely adamant that they will not lend beyond the 'contract' or engagement. However, they are happy to review the mortgage you may have with them as your circumstances change e.g. if you move onto a new engagement after promotion etc.


So this leaves the potential (and very probable scenario):


Soldier A wants a mortgage but is on a 12yr engagement, so his affordability criteria is based on 12yrs of guaranteed income. Result is he has to squeeze 25yrs of payments into 12yrs so the monthly payments increase significantly. Too expensive, fails affordability model - refused mortgage.


Soldier B buys a much cheaper property but is on same terms as soldier A. After 8 years he gets promoted and his engagement increases to 22 years. He decides to move up the property ladder and buy a reasonably sized family home. FD say he only has 14yrs left to serve so base his borrowing on that. Again, he fails affordability model and is refused a mortgage.


Soldier C does all of the above, then is commissioned - taking him to 55yrs. He commissioned at his 20 year point aged 40. He wants a nice posh officer's house for his cocktail parties etc. He applies for a mortgage and can only have a 15yr term - back to the 2 bedroom flat it is for you, sir!


You can play around with the figures and timescales, but the principle remains the same throughout. Once we are in a position to move up the ladder we will not have the time left in that particular job to satisfy FD's policy. The annoyance is that many Service personnel go on to serve 25+ yrs, get out and fulfil another career. We do not simply retire at 55 as much as some of us would like to.


In the past I have always answered "age 65" when asked about retirement age. I have not mentioned age 55 or Armed Forces pensions etc. This time I did and it shot me in the foot. A lesson learnt by me. ;-)

lovinituk

Or soldiers A, B and C all take their custom elsewhere and get a mortgage over 25 years.

abijanzo

lovinituk wrote: »

Or soldiers A, B and C all take their custom elsewhere and get a mortgage over 25 years.

Exactly. Which is what this Soldier A is doing.

Paully232000

Surely FD, or any company could say, without being unlawfully discriminatory, we wont lend to anyone in the forces, anyone who is a builder, rockstar, any other profession if they wanted to, and therefore you are going to get nowhere with your complaint.

If they said, we are not lending to women, men, disabled people, homosexuals, then you would have a case with them being a protected characteristic.

adouglasmhor

amnblog wrote: »

Wots a 'Siggy' Steph?

Someone in the Royal Corps of Signals?

Correct equivalent but better than a Private, Sapper, Gunner etc.

abijanzo

Paully232000 wrote: »

Surely FD, or any company could say, without being unlawfully discriminatory, we wont lend to anyone in the forces, anyone who is a builder, rockstar, any other profession if they wanted to, and therefore you are going to get nowhere with your complaint.

If they said, we are not lending to women, men, disabled people, homosexuals, then you would have a case with them being a protected characteristic.

And that is the point... although they may not be unlawfully discriminating they are still discriminating, which is their prerogative. (Although I am pretty sure that not lending to someone based on their profession would open up the floodgates to all sorts of litigation cases).


The Government recently introduced the Armed Forces Covenant to identify areas in society where Service personnel are being disadvantaged due to the nature of their profession. e.g. constantly moving home so unable to register with dentists, schools etc. Poor credit ratings due to
numerous addresses. Higher home insurance premiums due to prolonged absences etc. A large number f industry partners have subscribed to this covenant to ensure Service personnel get a fair deal - this is not to say we are being given special treatment; just so we are not adversely disadvantaged due to the contributing factors of our work i.e we don't have the same freedom of choice as a plumber or taxi driver or banker in where we go or for how long.


It would seem that the issue of mortgage terms has not been taken up in the same spirit... at least by FD anyhow.


I wonder if you asked a professional football player, an MP, or an actor - all of whom work on fixed contracts - if they had a long-term mortgage, what the response would be. I would be very surprised if hey were only ever offered 1-4 year terms (not that most of them would need a mortgage anyway).

TrickyDicky101

I'm with Annisele - it is discrimination but it isn't unlawful discrimination.

That's not to say I think it's fair or reasonable - I think it sucks and it would serve FD right if it means a lot of people dump them and their discriminatory, albeit lawful, policies.

lovinituk

abijanzo wrote: »

Exactly. Which is what this Soldier A is doing.

Job done, move along, nothing more to see here

Seriously though, don't stress about it. I'm sure you have more important things to focus your energy on if you are due to be deployed. First Direct will just lose business from a large section of the population and other providers will gain that business. Just make sure you tell all your colleagues so they can avoid FD too.

Thrugelmir

audigex wrote: »

The latter certainly is, because 55 is not his retirement age, it's just the date he will leave his current employer. That potentially gives him 11 years at his current employer

I sure as hell won't be with my current employer in 11 years. Yet they're perfectly happy to lend to me because my contract has no specific "end" date? Despite the fact I actually have less job security than the OP?

This definitely seems discriminatory.

Leaving the Army at 55 and establishing a new career that generates a similar level of income will be the challenge. Many people in their 50's find themselves going back down the ladder a few rungs for any number of reasons. Still in work yes, albeit at a lower income. Lenders take a macro view not a micro when writing mortgage business. Also can only base their decision as at today. Not on what might happen to an individual years hence. Finally borrowers are overly optimistic with regards to their own future finances.