TONY HETHERINGTON: RBS can't erase its disgrace over mishandled current account mortgage switch with paltry £350 offer
Tony Hetherington is Financial Mail on Sunday's ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.
Mrs M. C. writes: Some years ago, my husband met a Royal Bank of Scotland representative who assured him we needed an RBS current account mortgage. We duly switched to this in 2004, but it quickly became apparent it was not a good idea as our photographic business became a victim of digital photography.
We constantly asked RBS to change our mortgage, but unsuccessfully. I told the bank manager we were in difficulties, but he answered that he could only do something once we went into arrears. We borrowed from the family and over the next few years we paid £74,000 in interest alone. Finally, in despair, I rang a different department at RBS. It immediately offered a better deal, based on the information the bank had held all along.
Loan disgrace: Royal Bank of Scotland
There are two parts to your tale. First is a horror story of just how badly RBS mishandled your loan. Second is a sad account of what happened when you involved the Financial Ombudsman Service.
First RBS. You behaved exactly as the banks and building societies advise. When you realised you were getting into difficulties, you told the mortgage lender. In fact, you visited your branch frequently over three years. Not only did the bank fail to offer any help or advice, or to put you in touch with the bank’s own credit review team, which was there to do exactly that – but worse still, RBS failed to keep records, so now cannot even say who on its staff knew what.
In the end, it was your own efforts that set you on the road back to financial recovery. A call to RBS’s main mortgage department brought a better deal that the branch had failed to mention or perhaps did not know about.
When you complained, RBS claimed the adviser who recommended the mortgage had not really been offering advice at all. He was ‘off duty’ when he said the current account loan was just what you needed, so the bank took no responsibility for him.
Though you were strictly past the deadline, I got RBS to agree to allow the Ombudsman to investigate. The bank admitted it got it wrong by failing to behave responsibly when you warned you were in trouble, and the Ombudsman agreed that ‘RBS was at fault in this case’. But disappointingly, it said: ‘Because of the passage of time, it isn’t easy now to say what would have happened had things gone as they should have done.’ You might have got a cheaper mortgage, but it could have been a more expensive one.
RBS offered £350 as compensation for its mishandling of the situation, and the Ombudsman says this is enough. It is rare for me to disagree with it and I accept that we can’t turn back the clock. But you were originally paying more than £600 a month in interest, compared with hundreds of pounds less under the mortgage you found for yourself. Even the stress caused by the bank over several years should be worth a lot more than just £350, but the Ombudsman’s official view is that the scheme is there to handle financial complaints and not to compensate for other factors.
With or without the Ombudsman’s involvement, I find it impossible to say RBS behaved fairly. It treated you disgracefully, and £350 comes nowhere near what is needed to erase that disgrace.
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Will Fidelity ever accept my identity?
M.W.B. writes: I decided to cash in my Fidelity Isa to give my children a bumper Christmas. Fidelity then found I now live in Thailand. Despite speaking to my financial manager who has full power of attorney, it decided this was not enough.
I sent documents confirming my identity, but it rejected them because its ageist policy says a retired police inspector is a non-person. It wanted documents notarised by Thai lawyers. I sent them. It then decided Thai lawyers were not to be trusted and I had to have the same papers certified by the British Embassy in Bangkok, but at 72, I am reluctant to make the 300-kilometre journey.
Months after closing my Isa, Fidelity has my money in a no-interest account.
I asked Fidelity to look into your complaint, and I am sure it is coincidental that four days later the money was released to your account.
Fidelity was perfectly reasonable in expecting you to prove your identity, rather than find later it had sent your savings to an impostor.
But officials admitted: ‘We gave Mr B some incorrect information and insufficient detail about the documentation we required. When each verification document Mr B submitted came back to us, it was decided they were insufficient. This confusion caused unnecessary delays, for which we are very sorry.’ On top of your Isa savings, Fidelity has added £97 as interest and £500 for the inconvenience. It will also cover all expenses involved in providing the certified documents.
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, Room 301, 2 Derry Street, London W8 5TS or email. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.
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