The question of whether customers get treated fairly by our lending institutions was raised on a couple of separate issues in recent weeks.
The position of Northern Rock customers who are now part of Northern Rock Asset Management (NRAM) rather than Northern Rock plc was once again highlighted in the Daily Mail. Because NRAM no longer lend, customers looking to move and borrow more are finding that they face paying their Early Repayment Charges and moving to another lender to effect this.
This materially impacts on the portability of the product in practical terms. To combat this situation Northern Rock initially waived any ERC but that pilot has now sadly come to an end and unfortunately borrowers are finding that what they thought was a deal they could easily port and top up is actually going to cost them a fortune in ERCs. The initial waiver was very welcome and seemed to recognise that borrowers could be disadvantaged but it was never widely publicised and the removal of that waiver will hit some NRAM borrowers hard.
Late last week the Clydesdale and Yorkshire Banks hit the headlines when they managed to miscalculate the mortgage payments for about 18,000 borrowers over the course of a year or so. The response of the Bank was of course extremely apologetic but ultimately borrowers will have to repay the shortfall.
Whilst many will only see a modest rise in monthly cost other reports have indicated increases of hundreds of pounds per month to deal with as a result of the Bank’s error. There has been some talk of compensation but on a case by case basis. Surely the Bank needs a consistent stance on this so that all borrowers get the same deal.
It is this kind of approach that does nothing for the image of banking in today’s environment. Neither lender is doing anything outside original terms – NRAM will still port a mortgage but won’t top up whereas Clydesdale borrowers will now have higher payments having enjoyed a period of lower payments.
There just seems to be little give and take. If a borrower makes an error on their account then they would generally expect a charge. It would appear that if a Bank makes an error then a ‘humble’ apology will do, when a gesture of goodwill would certainly not go amiss.