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Monday, November 17, 2014

West Brom win first leg against landlords

The Financial Ombudsman Service (FOS) have starting sending out decision notices to complainants regarding last year's West Brom Building Society's rate rise.

The West Bromwich Building Society made a 2 percent rate rise on their BTL tracker mortgage - despite it supposed link to the Bank base rate (which has remained stuck at 0.5%).

Many of the 6,700 professional landlords affected by the rate hike back in December 2013 have been fighting cases against what they believe to be an illegal act, some individuals making complaints direct to the FOS, or a large group funding a group action fronted by which is due to hit the courts on January 21st, 2015.

The first leg of the tie has just gone to West Brom. 

Decision letters have just been sent out by the FOS, concluding that West Brom's rise was within the terms of their mortgage agreement.

The FOS has justified the decision pointing to a clause hidden deep in the mortgage agreement's small print. The clause states that West Brom could increase the mortgage rate to "reflect market conditions and to make sure its business is carried out prudently, effectively and competitively". 

The FOS have concluded that West Brom had legitimate commercial reasons to raise its tracker rate by 2 percent back in December 2013.


DD said...

We are not at all surprised that the FOS - who are part of the institution - would decide, after almost a year of procrastination, in favour of the WBBS! We're guessing those who had been advised to wait on this decision might well now decide to join us in advance the court date. We'll just wait to see what an INDEPENDENT commercial judge has to say about such blatant discrimination and misapplication of T&Cs which don't even apply to the product we bought (and btw paid a premium arrangement fee for)
As an aside I might ask every one of their customers - if not every holder of ANY KIND of a mortgage WITH ANY COMPANY - to consider why haven't ALL of the WBBS's customers been targeted? After all the clause in question is buried in EVERY one of their customers T&Cs so should WBBS get away with applying it in this first trial tranche of victims I suggest every single person in the UK with a mortgage had best stand by their beds!

Anonymous said...

It would be useful if this article reported all of the facts rather than just one side. You can hardly call this a win for West Brom when it is not part of the dispute. The dispute will be heard in the high court in January. It may have been worth including the important legal facts about the actual case to give a true reflection of the facts.