When Northern Rock Asset Management acquired the accounts of hundreds of thousands of Northern Rock customers in January this year those customers lost the ability to switch their mortgage to an alternative provider.
The bank did agree to reduce, or waive altogether, early repayment charges for some ? but not all ? of its customers until the end of June. Northern Rock claimed their customers had been treated fairly.
Mortgage adviser Ewan Barrowclough of Selkirk, told the BBC Money Box programme on Radio 4 that Northern Rock had demanded ?1,500 as an early repayment charge when one of its customers wanted to move house: “The original mortgage terms were fully portable but I’ve now been advised that the product is not portable, Northern Rock Asset Management can’t lend any more money and we can’t even transfer to Northern Rock Plc without paying the early repayment charge.”
Mr Barrowclough?s client was even more annoyed upon hearing that early repayment charges had been waived for customers who met certain criteria.
Those criteria were not elucidated by a Northern Rock spokesperson, who said: “For a limited period, and as a gesture to some customers leaving us in order to obtain additional borrowing with an alternative lender or taking a new product with Northern Rock plc, we provided a refund of some or all of the early repayment charge or helped with costs.”
Northern Rock Asset Management does not lend money for mortgages (Northern Rock Plc does). The former?s website contained this statement from chairman Richard Pym: “Economic conditions remain challenging and have placed increased financial strain on many households, and we remain committed to the fair treatment of all our customers.”
Publicly owned Bradford and Bingley has waived all repayment charges since 1 February 2010 and anticipates no immediate change in this regard.
