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Santander to contact 270,000 borrowers over unclear SVR hikes

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Santander UK is to write to over 270,000 borrowers and invite them to complain after the lender failed to make it clear to customers about when it would increase the cap on its mortgage standard variable rate.

The FCA has agreed the deal with Santander after the regulator found that letters the lender sent to customers in 2008 ahead of increasing the SVR cap were unclear.

In December 2008 Santander increased its SVR cap from 2.5 per cent plus Bank of England base rate to 3.75 per cent plus base. The regulator says borrowers may not have understood what the increase meant for them, and their options, and says that some borrowers did not receive any letters at all.

Santander will start writing to affected borrowers next week, and will be contacting customers in batches until the autumn.

The FCA says only a minority of borrowers will be entitled to redress, which will depend on whether borrowers could have moved to a better mortgage rate.

Santander has since increased its SVR cap further to 4.99 per cent plus base. It informed customers of the move in August, while at the same time announcing plans to increase its SVR from 4.24 per cent to 4.74 per cent. The higher 4.74 per cent SVR came into effect in October.

A statement from Santander says: “Some customers who had an SVR-linked mortgage with an early repayment charge with Santander at the time we increased the cap margin may not have been aware that they could have repaid their mortgage ERC-free for three months after the increase affected their mortgage.

“Following receipt of our letter, if a customer contacts Santander we will record and review their case on an individual basis and, depending on the customer’s personal circumstances at the time the cap margin affected their mortgage, consider appropriate next steps.

“The majority of our mortgage customers would not have suffered any detriment as a result of any lack of clarity in the original communication in December 2008.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. This is no surprise to me. Santander is the most hapless of lenders with the integrity of a starving snake.

  2. Yet another example of banks screwing the customers who are already hard pressed. Not making enough profit ? No problem, just move your variable rate ! Disgusting !!!

  3. Banks will NEVER make enough money, greed gone bonkers!!!
    A real s-d you attitude to most ordinary folk.

  4. Is this the same Santander (Abbey for Intermediaries) who were runners-up in the Money Marketing Awards?

    Just a thought

  5. Another nasty little trick playing on their existing customers from this truly appalling lender

    Still the MMR and TCF will put pay to that ! FCA wont let that happen that’s for sure !

    Got to go now matron is here to give me my medicine !

    hahahahahahahahahahahahah!

  6. Break up the banks, they are too big and too clumsey to treat customers fairly.

    They have no interest in ‘providng best’, dismantle them, disect them, divide them and decimate them.

    Make them small and competitive, ban direct sales !!!!

    …..that is all……

  7. Wonder what Alan Lakey thinks of Santander ; )

  8. I was on a fixed rate at the time and according to their letter received 5 years after the event I was not effected.

    I refute that it had no effect on me for this reason; my mortgage automatically reverted to SVR from a fixed rate in September 2011 .. I was only made aware of an SVR change in August 2012 .. First via the press and then through a letter. To my knowledge this was the first time they had done this, and i recall it was met with much disapproval in the media. Betwix 2011 and 2012 the equity on my home had further reduced limiting the mortgage deals on loan to value basis.

    When Santander announced they had changed the SVR I remember thinking how unfair that was, and also thinking well what can I do anyway I’m stuck…

    But if I’d have know in 2011 that they had already started to mess with the SVR would I have made a different choice of mortgage lender, given that I would have had more equity in the house.

    Tomorrow they will be hearing from me ..

  9. stephen lucas 23rd May 2013 at 4:07 pm

    Can someone please advise.
    Had a mortgage with santander part svr part fixed, fixed ran out in July 2009. Had I known about the rate rise I would have moved my whole mortgage somewhere else and paid the release fee, now in Jan 2009 my house was in a fire and was uninhabitable this meant I couldn’t move the mortgage. And we ended up selling the house at a lose can we claim for this loss now.
    Thanks

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