FOS rule West Brom Tracker Rate Hike is fair - Mark Alexander
21 November 2014
The FOS (Financial Ombudsman Service) have done it again! 
In the past the FOS have controversially agreed that rate hikes applied by Bank of Ireland, Skipton Building Society (Amber Homeloans) and also the Danske Bank (formerly National Irish Bank) were fair. Therefore, is it really that shocking that FOS would also rule in favour of West Bromwich Mortgage Company?
Following a judicial review in the case of Millar & anor -v- Financial Services Ombudsman [2014] IEIC Mr Justice Garard Hogan recently ruled that the Irish FOS were wrong in their contractual interpretation in a rate hike case that the Millars brought against Danske Bank [source1].
This supports the Property118 members’ lack of confidence in the UK FoS decision making process, and hence the decision for Property118 to raise funds to enable their members legal team to stand toe to toe on 21st January 2015 with the West Brom legal team at the Commercial Courts in the Rolls Building.
Property118 members have raised nearly £500,000 and these funds are set to grow as a result of people who complained to the FOS realising that Property118 were right all along to take a representative action to the Courts.
The National Landlords Association initially recommended its members to pursue the FOS route and await the outcome of that before considering legal action. Many of those who followed this advice are enquiring about joining the representative action organised by Property118 as a result of the FOS finding. **West Brom has indicated through its legal team that it will apply the finding of the Court across the board to all affected borrowers**, so all additional support to ensure the right result is achieved is essential.
The Property118 representative group are happy to welcome all who have received the FOS rejection letter. The same financial commitments to those who joined prior to the deadline will apply, plus a small price for the administration costs associated with Cotswold Barristers applying to the Courts to have the names of the newly represented participants added to the claim. A new deadline of 19th December has been applied, this will definitely be the final deadline for legal reasons.
Newcomers are interested in joining the fight in the full knowledge that sufficient funds have already been raised and that the case will be heard on 21st January 2015.
Each member has paid £1,000 into an escrow account held by BARCO (The Bar Council’s Escrow service) plus a further £500 to Property118 and Cotswold Barristers to cover legal costs and associated running and marketing costs of the campaign for each represented mortgage account. Some members have a dozen or more represented mortgages, most have one or two. In the event of the case being won the majority of funds will be returned, plus of course a refund of any over-payments to West Brom and the satisfaction of their terms being upheld as per the borrowers understanding of the tracker rate mortgage contracts they entered into.
Every newcomer to the Property118 reduces the financial exposure to the funds already raised on the basis that all costs are shared pro-rata to funds committed.
** Beware false promises! **
Back in 2009 the CEO of the Skipton Building Society went on record that they would honour an interest rate cap [source2] just one year before that promise was reneged upon [source3]. However, insufficient funds were raised to take the case to court and borrowers have been left high and dry by the FOS and the FCA who decided the rate hike was fair despite the promises made. Perhaps that’s why West Brom borrowers want the certainty of being represented in the Property118 vs West Brom Court case, whilst it is still such a cost effective option?
