Unfair Interest Rates based on Address?

bris

Once you go to a full application you will get what rate you get.


2.8%, 5.9, 7.5 is all irrelevant, your final rate will be decided when the application is live and accepted.

tizzwoz

robber2 wrote: »

What is your reason for believing that it would not be legal?


Rob

I think it would be discrimination. Why do people in a "better"neighbourhood get better interest rates than people in "poorer" areas?

tizzwoz

Uberior wrote: »

Have you cross-referenced the addresses with the deprivation score?


Can be interesting.

Was interesting. It is bang in line with the interest rates quoted.
First address, reasonably wealthy, best interest rate.
Second address, most deprived, worst interest rate.
Third address, less deprived, medium interest rate.

So the people who are already worse off pay more in interest to buy things. I could understand if other factors played a role, obviously income, employment, etc. But as said before, these interest rates purely differ because of the address entered. I believe that is unfair.

[Deleted User]

tizzwoz wrote: »

I think it would be discrimination.

All risk profiling is discriminatory. It has to be, by its very nature.

But they cannot discriminate on protected characteristics.

nick74

tizzwoz wrote: »

Was interesting. It is bang in line with the interest rates quoted.
First address, reasonably wealthy, best interest rate.
Second address, most deprived, worst interest rate.
Third address, less deprived, medium interest rate.

So the people who are already worse off pay more in interest to buy things. I could understand if other factors played a role, obviously income, employment, etc. But as said before, these interest rates purely differ because of the address entered. I believe that is unfair.

Arguably you are right, but who said it was supposed to be fair?
A lender can be as 'unfair' as they like as long as they don't discriminate based on protected characteristics:

https://www.citizensadvice.org.uk/law-and-courts/discrimination/protected-characteristics/

robber2

tizzwoz wrote: »

I think it would be discrimination. Why do people in a "better"neighbourhood get better interest rates than people in "poorer" areas?

Because the reality is that they are less likely to default or have trouble keeping up with payments and are therefore less of an administrative burden and additional cost for the lender.



Welcome to the real world.



Rob