Mortgage Introducer was contacted by a broker who said his client had been charged £25 by the lender to set up a GI policy, despite the fact it had been indicated the client would be using another provider.
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John Watson, operational director at Northern Rock, refuted the claim this was against the Financial Services Authority’s ‘Treating Customers Fairly’ initiative.
“A one-off charge, which is currently £25, will be payable to Northern Rock for accepting an alternative buildings insurance policy, when the cover offered by Northern Rock is not taken. This is clearly and transparently detailed in our mortgage tariff and Key Facts Illustrations issued to applicants.”
In a separate issue, Northern Rock has also been accused of preventing clients from gaining the best remortgage deal.
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Steve Roberson, principal at Mortgage Man, said he had contacted his client towards the end of the deal but was told they had already agreed to one of the three options sent to them by the lender.
Roberson said: “The client thought they had to choose one of the options and now they are locked into a product with a large early repayment charge. This was a non-advised sale which has left the client worse off. We’ve had to extend the life of the mortgage and make some of it interest only to help them cope.”
Watson responded: “We value our customers, whether direct or introduced, and make every effort to retain their business in a compliant and fair manner. We operate a successful retention policy for borrowers reaching the end of their current deals and offer the same, best deals from our portfolio to existing as well as new customers. This stance represents a unique and first class illustration of a lender treating its customers fairly.”
