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&#39Watchdog price ruling is threat to the market&#39

The financial ombudsman&#39s decision to end dual pricing by Halifax, Nationwide and Abbey National will destroy competition and product innovation in the mortgage market, warns analyst John Wriglesworth.

The Financial Ombudsman Service last week threw out appeals from Halifax and Nat-ionwide against its ruling to uphold complaints from individual customers that new borrowers were being given lower standard variable rates than existing borrowers.

Abbey also lost its initial case with the FOS but says it is considering appealing against the recommendation if its borrowers should be switched on the same grounds.

The move could affect up to one million borrowers alth-ough the ombudsman can only respond to individual complaints and cannot force len-ders to make changes across the board. But Halifax has removed the discount variable rate of 5 per cent and is putting all new customers on a single variable rate, currently 5.75 per cent.

The Building Societies&#39 Association has reacted angrily to the ruling and is consulting with lawyers as to whether lenders can challenge the ombudsman on human rights grounds.

BSA director-general Adrian Coles says the Ombudsman is not allowing adequate consultation time. He says there is no proper means to appeal as the only way to challenge a final decision such as for Halifax or Nationwide is through the courts.

Wriglesworth consultancy managing director John Wriglesworth says: “This is a travesty of justice and a shameful decision set to turn the clock back. Halifax and Nationwide were trying to make the market fairer and the Ombudsman has destroyed competition in favour of a few greedy customers who decided to go for it looking for a discount as well as a lower variable rate.”


IHT information for IFAs

Scottish Mutual International has produced an IFA information pack explaining the basics of inheritance tax and highlighting the importance of estate planning.The company says IFAs have a vital role to play in offsetting their clients&#39 potential IHT liabilities.SMI says the Treasury takes in £2.3bn a year through IHT and much of that amount could be […]

Clerical Medical – Capital Investor

Thursday, February 7, 2002.Type: Offshore bond.Aim: Growth by investing in up to 18 Clerical Medical with-profits andunit-linked funds.Minimum investment: Lump sum £15,000.Place of registration: Isle of Man.Investment split: Choice of sterling offshore with profits, US offshorewith profits, Euro offshore with profits, building society deposit, CMIsterling currency reserve, CMI Euro currency reserve, offshoredistribution accumulation, CMI UK […]

Teather & Greenwood Investment Management – UK smaller Companies Fund

Tuesday 5 February, 2002Type: Oeic. Aim: Growth by investing in Aim-listed companies. Minimum investment: £500. Investment split: 100 per cent invested in Aim-listed companies. Isa link: Yes. Pep transfer: Yes. Charges: Initial 5 per cent, annual 1.4 per cent. Commission: Initial 3 per cent. Tel: 020 7426 9003.

Standard Life – 5 Year Buy-To-Let Fixed

Fixed term: 5 yearsFixed rate: 6.15%Minimum loan: £40,000Maximum loan: up to 80% of valuation subject to maximum £400,000 on single property, £500,000 on up to 5 rental propertiesIncome multiples: income must equal at least 9% of loan amount, subject to minimum principal income of £20,000 or £30,000 jointArrangement fee: £350 for single mortgage, £500 single […]


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