West Bromwich Building Society Tracker Margins Legal Action

Reply to the comment left by "Mark Alexander" at "16/12/2013 - 17:56":

Agreed Mark, & well done for all your efforts.

From Anna Mikhailova Sunday Times:
"Thanks for this David. It's a very interesting area indeed. We have covered the Bank of Ireland and West Brom developments this year and I think we will write a story again on it when there is some development in the cases brought against them, and then it would be great to speak to you about these issues and include them in the piece."

I think there will more coverage in the nationals once the action goes live
David

Reply to the comment left by "Richard Adams" at "16/12/2013 - 19:17":

Or worse still, a pension or annuity. That very thought sent shivers down my spine as to what depths some financial institutions might sink to if we don't nip this nonsense in the bud right away.

Reply to the comment left by "David Lawrenson" at "16/12/2013 - 17:40":

The reply includes the sentence:

"the FCA did not think any other banks had imposed similar clauses allowing the lender to increase the differential between the base rate and a tracker rate."

It is very disappointing to read this wording. It shows that the writer has either missed the point, or is pretending to: a tracker with a variable premium is a contradiction in terms, a nonsense, an impossibility, therefore there could not possibly be such a clause in our contracts.

Reply to the comment left by "Richard Adams" at "16/12/2013 - 19:17":

No I wouldn't, but then they wouldn't provide the underwriting. That would doubtless be farmed out, so they'd not expose themselves to any risk...but you know, once again it was sort of tongue in cheek! I'm not being literal dear friend.

Reply to the comment left by "Incensed Landlord" at "17/12/2013 - 00:48":

I too am posting tongue in cheek but with a large portion of ironic bitterness thrown in!

Dear Team,
Apologies for our recent radio silence (busy time of year, fixing storm damage), but we have been keeping up with all posts. Well played to everyone who has joined the action and is campaigning on all our behalfs. I am still on standby to forward Press Releases to Scottish newspapers.

The following is going over old ground (more apologies), but it shows the up-to-date position that the West Bromwich is taking regarding our complaints. I wanted to share this with our group in case it sheds any fresh light which might help our campaign.

First, copy of the letter which we sent to Paul Field after the 1.9% rise letters arrived:

"Dear Mr.Field,
With regards to your letters of November 2013 (attached) informing us that, despite our former letters, you are planning to go ahead with a 1.9% rate rise to our 2 tracker mortgages.
Whilst we have no option but to allow you to take the direct debits for the increased amounts, we wish to state on the record that:
1. At no time were we told that you reserved the right to change the rate of interest above bank base rate for these loans. Not when we signed for the loan, when you converted it to a fixed rate, or when you canvassed us to revert back to a tracker.
2. Your broker, First Mortgage Dundee, ticked the box on your on-line “westbromforintermediaries” form to say that we had read and understood the terms and conditions. This is demonstrably untrue. The broker never showed us the terms and conditions, and ticked the box without informing us.
3. Your correspondence to us clearly states that the loans would be “0.99% above base rate for the life of the mortgages with no floor”.
4. We believe that we have been treated unfairly, not just in regard to this rate rise, but also that you have singled out a) Landlords with more than 2 rental properties, and b) Landlords who took out their loans through brokers. We believe that it is unfair that borrowers who dealt directly with the West Bromwich are unaffected by these increases.
We are currently taking legal advice in an attempt to have these grossly unfair and mis-leading rate increases overturned.
Yours faithfully,
......."

Now, extract from the reply received yesterday from Holly O'Sullivan dealing with our 4 specific complaints:

“Dear Mr.Law……………..
1. Please find enclosed a copy of the covering letter provided along with the mortgage offer document. As you will see enclosed in the pack was copy of the mortgage conditions (sic). You will also note we advised you to read through the information provided prior to signing the offer. Furthermore, the mortgage conditions are applicable to the loan itself and not the mortgage product. As you are aware during the life of borrowing you are able to switch the type of mortgage product you hold. Therefore, you will have conditions to support the loan and specific term the support the product (sic).
2. The use of an intermediary is the customers’ decision and we are unable to take responsibility for the information they have provided to you. However, by signing the mortgage offer and mortgage deed you have confirmed that you accepted the mortgage conditions which we have provided to you.
3. The conditions of the loan stipulate we are able to vary the interest rate unless specified as a fixed rate.
4. To provide clarification regarding the criteria in which our decision has been made I can confirm that we selected those landlords who are linked to three or more buy to let properties, this is a business decision. As you have advised you are aware we have chosen a specific customer segment to apply these changes to. As both a mortgage provider and an investment provider we make decisions relating to specific customer groups everyday i.e. offering an account for the over 65s or a mortgage product for residential customers only. Therefore, this is identifying a customer segment and making a business decision that applies to this area.
In relation to the legislation referred to in the Unfair Terms in Consumer Contract Regulations, as the name suggests, these apply in relation to consumers and contracts taken out under standard terms by them – whereas the rate change to be applied from December 1st 2013 is to be applied only to persons identified as landlords of multiple properties (i.e.non-consumers).”

Holly goes on to suggest we contact the FOS if still unhappy.
We've also had the standard reply from Sajid Javid MP referring us to the Money Advice Service.

Looking forward to receiving up-dates from Mark, Justin et al, and wishing everyone involved a very Happy Christmas!

Reply to the comment left by "Alexander Law" at "17/12/2013 - 12:20":

"non-consumers" - is there a legal definition of this abusive term ?

I suspect WB will argue that non consumers are those who do not live in the property/properties that are mortgaged.

If we all opened a savings account with the WBBS we would all be members. We could then attend next years AGM (July) and ask Mr Westhoff and his fellow Directors/Jackals, who was responsible for besmirching the good name of the members Society? As legal action may have started I am sure that the members would be interested in the topic.
Additionally could one of us stand as a Director with a policy of NO PAY OFF for Mr Westhoff and his fellow Jackals when they are forced to resign following their total defeat in the Courts?
I understand that as a mutual they are legally obliged to circulate details of
proposed Directors to all the members at the Society's expense. Perhaps "Property 118"could be mentioned in the manifesto. It may be read by the BTL customers who dealt direct with the Society.

Reply to the comment left by "Alexander Law" at "17/12/2013 - 12:20":

Thanks Alexander for sharing this correspondence. I think it does shed fresh light, and weakens WB even more.

1. The distinction she draws between the loan and the mortgage “product” is a novelty, and is very useful as regards paragraph 3.

We are protesting against their attempt to change the conditions of the current product, regardless of whether some of us switched to it or not.

2. The use of an intermediary came about because that is how WB promoted this product. WB pushed it through brokers. I did not contact my broker to ask what products WB had specifically. I asked him what was available in the market and he told me what WB were offering.

3. She repeats the claim that “The conditions of the LOAN stipulate we are able to vary the interest rate unless specified as a fixed rate.” However, the conditions of the PRODUCT stipulate that WB is not able to vary the interest rate except when the BBR changes, and only by exactly the same amount.

4. This is her longest paragraph but it still does not answer the second part of your paragraph 4:

“that [WB] have singled out Landlords who took out their loans through brokers”.

She has not addressed this discrimination, unless it is covered by the sentence “As you have advised you are aware we have chosen a specific customer segment to apply these changes to.”

This would appear to confirm your accusation. She certainly has not denied it, although she had the perfect opportunity to do so.