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Nationwide axes dual pricing after watchdog&#39s ruling

Nationwide Building Society is refunding a total of £90m to 400,000 mortgage customers affected by the Financial Ombudsman&#39s ruling that its dual-pricing policy was unfair.

In January, the ombudsman dismissed Nationwide&#39s appeal and upheld its ruling in the case of a borrower wanting his discount mortgage to be linked to Nationwide&#39s lower base mortgage rate of 4.74 per cent rather than the standard variable rate of 5.24 per cent.

The building society has now decided to move all special deal customers from its SVR to its BMR, which is always 50 basis points lower, and backdate the financial benefits to March 1, 2001.

It is completely withdrawing its SVR and will operate a single BMR from April 1 to end criticism of dual pricing.

Nationwide is denying this is a reversal of former chief executive Brian Davis&#39s strategy on mortgage pricing as it will still ensure its products are available to all new and existing borrowers. It claims this is not the case with any other lender.

The society claims that Halifax, which has so far decided not to apply the ombudsman&#39s decision against its dual-pricing strategy to all relevant customers, must now decide if it will follow suit.

Nationwide chief executive officer Philip Williamson says: “We believe the complainant was getting a fair deal and was not disadvantaged which is why we were disappointed with the ombudsman&#39s decision. But we have decided to apply the spirit of the decision to all similar borrowers and accelerated our move to the BMR as our single variable mortgage rate.”


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