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TSB Bank mortgage borrower interest rates lawsuit overview:
- Who: Former Northern Rock mortgage borrowers with accounts now being managed by TSB Bank have joined a complaint filed against the financial institution.
- Why: The complaint accuses TSB of locking former Northern Rock mortgage borrowers into contracts with “excessively high” interest rates.
- Where: The lawsuit was filed in the High Court.
TSB Bank allegedly locked former Northern Rock mortgage borrowers into contracts containing “excessively high” interest rates, according to a lawsuit.
TSB took over around 27,000 mortgages worth a total of £3.3 billion from the government in 2016, This is Money reports. The mortgages, which originally belonged to Northern Rock, were being managed by the government after Northern Rock collapsed during the 2008 financial crisis.
Mortgage borrowers claim, however, that they have now been locked into contracts with inflated interest rates under TSB’s Whistletree brand — going so far as to call themselves “mortgage prisoners.”
Around 200 mortgage borrowers have joined the TSB lawsuit so far, while Harcus Parker, the law firm representing the plaintiffs, says a total of 27,000 borrowers could eventually make a claim, This is Money reports.
The former Northern Rock borrowers, who argue they have been charged almost two times as much interest as other Whistletree customers, seek around £50,000 in compensation for interest they allege was overpaid.
TSB lawsuit claims bank denies former Northern Rock mortgage borrowers access to fixed-rate deals
Further, mortgage borrowers argue that, up until just recently, TSB declined to grant them access to fixed-rate deals on the same base level as other Whistletree customers, This is Money reports.
TSB, meanwhile, denies the allegations, arguing that — since taking over the mortgages in 2016 — it has allowed its customers to transfer to less expensive products when they previously couldn’t have.
Mortgage borrowers who would like to file a claim to join the TSB lawsuit must only have been administered a mortgage loan by Whistletree, while borrowers who took out a “Together Mortgage” may be able to seek further compensation, This is Money reports.
In related banking news, Tesco Bank agreed earlier this year to issue hundreds of refunds to customers it said it mistakenly overcharged for its no claims bonus protection service.
Have you been locked into a mortgage contract containing an excessively high interest rate? Let us know in the comments!
The plaintiffs are represented by Matthew Patching of Harcus Parker.
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