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14:00 PM, 2nd April 2014, About 10 years ago 34
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In 2010 the Skipton Building Society broke a promise to over 60,000 mortgage account holders.
The basis of that promise was that their mortgage rate would never exceed 3% over the Bank of England base rate – it did – CONSIDERABLY!
The hike in monthly payments for a person with a £150,000 interest only mortgage has been around £181.25 per month!
Affected borrowers include both home-owners and buy to let landlords.
At the time a small group sought legal advice but insufficient funds were raised to challenge the matter in Court. Looking back at what happened I can only assume this was due to lack of marketing expertise within the campaign group which set out to challenge Skipton.
Given that the rate hike occurred over four years ago the Skipton probably think they have got away with this and are home and dry. Several borrowers have sold their properties or refinanced onto different deals but this makes no difference, they all have a potential claim for compensation.
Saqib Mahmood – affected borrower
Saqib Mahmood, a non-practising Barrister was affected by the rate hike to his personal mortgage and another on a buy to let deal. Mr Mahmood was part of the initial campaign group and admits “the campaign got nowhere due to lack of marketing expertise. The case we had was strong and Skipton have already capitulated for one borrower to avoid Court Action. I am delighted that Mark Alexander and his team at Property118.com have picked up the gauntlet on this one. I am also affected by the West Brom rate hike”.
Mr Mahmood was also keen to point out what he refers to as ‘the Gerald Ratner moment of the Skipton CEO’. This dates back to 5th March 2009 when the Bank of England base rate fell to 1%. At the time the Skipton chief executive David Cutter told FT Adviser “We have pledged our residential SVR will never be more than 3 per cent above base rate and, even with this at its lowest level for 315 years, we will honour our promise.” – LINK
On the back of organising a successful campaign which raised over £450,000 to mount a legal challenge against the West Bromwich Mortgage Company (whose borrowers are affected by a similar issue) Property118.com has sought Counsels opinion on the conduct of Skipton Building Society. Counsel is so confident that he can get the Skipton’s decision reversed if the matter goes to Court that he is willing to work on a “no-win-no-fee” basis to achieve this. His objective will be to get the terms enforced and claim compensation backdated to the date of the increase. However, this will be subject to recruiting borrowers with a minimum combined total of 500 affected mortgage accounts.
NOTE – No-win-no-fee agreements are also known as a CFA (Conditional Fee Agreement) or a DBA (Damages Based Agreement).
The case will be run on similar terms to the legal action against West Bromwich Mortgage Company, i.e. one borrower will represent all those who instruct Counsel to challenge the legality of the rate hike. Any Court order will only apply to the mortgage accounts represented by the legal action. In other words, there will be no free rides.
There will be two representative legal challenges, one on behalf of consumers (i.e. homeowners and landlords with only one buy to let mortgage) and the other on behalf of landlords with two or more buy to let mortgages.
The Barrister we have engaged is Mark Smith of Cotswold Barristers. This is due to his experience in these matters having taken on the UK’s largest ever direct access barristers case against the West Bromwich Mortgage Company.
Cotswold Barristers will administer the action, Innovative Landlord Solutions LLP (the owners of Property118.com) will be responsible for driving the campaign and associated marketing.
We are not asking anybody to part with any money at this stage. However, to fund the campaign, at some point, we will need to begin fundraising to pay for administration and marketing. We will let you know more about this in due course.
Once an initial target of 500 instructions has been obtained, pre-action protocol proceedings will be initiated and papers will be served to the Courts 90 days thereafter. This 90 day period will be known as the Countdown period.
Mark Smith (Barrister-At-Law) will earn nothing unless he wins the case or arranges a settlement for the clients he is representing.
During the Countdown period Counsel will also organise ATE insurance or litigation funding to protect claimants against adverse costs in the event of the legal action failing and the others sides legal costs being ordered to be paid by the group. The case will not proceed if this risk cannot be mitigated, either by these routes or by self-insurance, a model that has worked with great success in the West Brom case.
The objective of the legal action is for the 3% interest rate cap to be Court ordered and backdated to the commencement of the affected mortgages. In other words, those who sign up to this action could receive a lump sum refund (less costs) and lower mortgage payments moving forwards. If the barrister fails to achieve this objective he will be paid nothing for his efforts. If the case succeeds a percentage of the overpayment will be retained to pay ATE insurance, other expenses, and Counsels fee.
For more details please search Google for “Property118 Skipton Building Society Legal Action”
To register your interest please complete the form below.
CB’s next major project. http://t.co/C82JbXvbtI
— Cotswold Barristers (@Cotswoldbrief) April 3, 2014
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The Man From Nowhere
12:57 PM, 3rd April 2014, About 10 years ago
The Skipton BS (rather arbitrarily!) defines "exceptional circumstances" under each of two separate tests, which have been defined by the Society's Board as follows:
1. Base Rate is less than or equal to 2.7%;
OR
2. Base Rate minus the UK average Instant Access savings rate (as published monthly by the Bank of England) is less than or equal to 2.25% for each of the three preceding months.
Skipton states that the circumstances will remain exceptional for as long as either one of these tests continue to be satisfied.
Skipton has "promised" to track the performance of these two tests and advise when they no longer prevail. When this happens, Skipton claims it will voluntarily reinstate the ceiling for customers who had the benefit of it under their mortgage terms, "provided no other exceptional circumstances have arisen in the meantime".
Does anyone even believe the Skipton's promises anymore?
http://www.skipton.co.uk/mortgages/svr/ourSvr.aspx
Mark Alexander - Founder of Property118
9:41 AM, 4th April 2014, About 10 years ago
Have we managed to start rattling cages already?
Thomas Dickson
14:35 PM, 4th April 2014, About 10 years ago
It's unbelievable that Skipton chief executive David Cutter can go on record on 4 March 2009 pledging that their "residential SVR will never be more than 3 per cent above base rate" and that "even with this at its lowest level for 315 years, we will honour our promise". To then rely on some small print in their terms and conditions, that I doubt any of the 15,000 borrowers ever read, and remove that cap is a classic example of treating customers unfairly.
That decision has cost me personally and many of our clients, thousands of pounds whilst Skipton continue to post millions of pounds profits every year - £36.4m in 2012 increasing to £102.5m in 2013.
I'm delighted this action is being taken now and Skipton is being held to account.
Mark Alexander - Founder of Property118
9:47 AM, 14th April 2014, About 10 years ago
17 affected borrowers have now completed the expression of interest form above.
If each of you now manage to recruit just two more affected borrowers we will be on a roll.
To achieve this it is important to add comments to this discussion thread. These will be picked up by journalists and internet search engines which is great for spreading the message. You don’t need to use your real name but you will need to become a member of property118, which is free, in order to post comments.
Saqib Mahmood has sent an email to Leon Kaye solicitors who looked into this case four years ago. They signed up around 100 people and given that Leon Kaye aborted their project we are hopeful that they will write to the clients who instructed them and suggest they take a look at this campaign. The more of us that send similar request, the more likely they are to help. We are not asking Leon Kaye to provide details of their clients. All we want Leon Kaye to do is to write to or email their clients to suggest they have a look at this campaign and the success we are having with the similar campaign against West Bromwich Mortgage Company.
Saqib has also written to his MP to seek support. This was a strategy we used in the West Brom campaign and it worked well. An early Day Motion was submitted by a members MP and since then another 52 MP’s have supported it. This has attracted significant press interest. We hope to achieve something similar for this campaign and then to ask every member to lobby their own MP to gain support. More about that in due course. Perhaps Saqib would be happy to share the email he sent to his own MP so that others can use it as a template to send to their own MP’s?
The success of the campaign will belong to its members. There is only so much we can do at Property118.
The more members we get, the wider and faster the message will spread
The reason the West Brom campaign has been so successful is because the members have done the following things:-
1) Lobbied their MP’s
2) Contacted Newspapers
3) Used Twitter, Facebook and LinkedIn to share the message
4) Contacted their local radio stations and offered to be interviewed on air
5) Requested Subject Access Reports to glean further information from their mortgage lender and to cause significant disruption (more on this strategy in a later report)
6) Started an online petition
7) Published blogs
8) Searched for and/or started related discussions on other internet forums and linked back to this page
9) Contributed to a marketing fund
10) Contacted mortgage brokers in their area and asked them to advise any clients they arranged mortgages with Skipton and/or Amber Homeloans to take a look at this discussion thread.
You may not be cut out to do some of the things on this list but the important thing is that each and every one of you needs to do something if you feel passionately about this and think you deserve a refund of payments which have been taken out of your bank account unfairly.
To get the ball rolling please leave a comment below with a pledge on what you are going to do to help drive this campaign forward.
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Paul Norris
19:11 PM, 14th April 2014, About 10 years ago
I have a Skipton BTL mortgage, the deal I originally had came to an end a month before they forced the rate rise. I will be supporting this campaign and have already contacted the broker that introduced me to Skipton with this mortgage. I gave him the link to this page and asked him to pass it on to any other clients he knows who may be affected. I am also planning to contact my local MP about it and will also be emailing http://www.thisismoney.co.uk, The Mail on Sunday's financial paper online.
Is it worth complaining to the financial ombudsman?...if so anyone got contact details?
Anyone considered contacting BBC watchdog? They're supposed to be consumer champions!
Kevin Jeffery
21:09 PM, 14th April 2014, About 10 years ago
Interestingly the initial fixed rate BTL mortgage deal I have with Skipton came to an end AFTER the increase and my rate DROPPED at its completion, thus I didn't realise that they had made this alteration. Nor did I read about it at the time in the press. I wonder how many other people also fell into this catagory hence there was not a bigger upset at the time?
As I'm now two for two, (being with West Brom as well), I have already got in touch with my broker and solicitor asking them to spread the word with a link to this page, I will be emailing my MP tonight and generally commenting and posting a link to this site on any sites I come across that others may visit.
Time to make some noise........
Mark Alexander - Founder of Property118
14:49 PM, 15th April 2014, About 10 years ago
Reply to the comment left by "Kevin Jeffery" at "14/04/2014 - 21:09":
Welcome on board Kevin, we now have 22 members signed up.
Message to Saqib "The Man From Nowhere" - has your MP responded yet?
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The Man From Nowhere
14:57 PM, 15th April 2014, About 10 years ago
Reply to the comment left by "Mark Alexander" at "15/04/2014 - 14:49":
Hi Mark,
I have arranged a meeting with my MP for 10 May. To assist other affected Skipton borrowers to speak to their MP's about this issue and to garner their support, below is a suggested template with which to write or email your MP.
(Please feel free to amend the template to your circumstances. If you would like a copy of the PDF, both myself and Mark Alexander will be happy to provide you with it).
[NAME]
[ADDRESS]
[TELEPHONE]
[EMAIL]
[DATE]
Dear [YOUR MP],
My name is [YOUR NAME]. I am a borrower with the Skipton Building Society. I am seeking your help to gain publicity for a campaign I am working on to redress an injustice that has been perpetrated against me and a further 65,000 homeowners that have mortgages with the Skipton Building Society and its subsidiary company Amber Homeloans.
I have attached a PDF document from an article which has been published on the Property118.com website. The links in the PDF are functional and provide useful background and evidence of claims made.
I must point out that unlike the legal action currently being taken by Property118 members against the West Bromwich Building Society in relation to tracker mortgage rate hikes, this particular issue is NOT confined to landlords.
I would like to arrange a meeting with you to discuss the matter and to present evidence.
To assist our discussion I have penned the following draft EDM for you to consider.
That this house calls for an investigation into the arbitrary decisions made by Skipton Building Society to determine the “exceptional circumstances” which have affected the mortgage rates of some 65,000 mortgage borrowers despite the CEO of Skipton Building Society openly pledging in March 2009 that their mortgage rates would not exceed 3% over the Bank of England base rate and then reneging on that promise.
Ideally, I would like the matter to be debated in the House of Commons, and for an investigation to follow into the hollow promises of the Skipton Building Society CEO and the unilateral variation of a contract. A contract that was arbitrarily and cynically varied, safe in the knowledge that ordinary, decent, and hardworking people would lack the necessary funds to challenge it in the courts. Further, I would also like to see the treatment of complaints associated with this matter by the FCA (formerly the FSA) and the Financial Ombudsman Service to be investigated, perhaps even by judicial review.
I look forward to hearing from you soon.
Kind regards
[YOUR NAME]
Mark Alexander - Founder of Property118
15:11 PM, 15th April 2014, About 10 years ago
Reply to the comment left by "The Man From Nowhere" at "15/04/2014 - 14:57":
Nice one!
Good luck with your MP and please report back after the meeting
Here's a link to the PDF >>> https://www.property118.com/wp-content/uploads/2014/04/PDF-Skipton-Building-Society-Legal-Action.pdf
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Anne Nixon
21:06 PM, 16th April 2014, About 10 years ago
Reply to the comment left by "The Man From Nowhere" at "15/04/2014 - 14:57":
Thanks this is really useful and it will help me with my contact with my MP (co-incidentally the MP for the Skipton & Ripon constituency!)
I'll keep you posted, thanks again.