3 recent cases for fixed rate loan complaints have been for farmers based in Wales. One was against Nat West, and the other two were against Lloyds Bank, and all three were taken through to the Financial Ombudsman Service, after the bank failed to provide the redress that we sought for our clients.
The outcome for the first was that the bank “almost certainly hid” the existence of break costs. The Ombudsman’s Final Response was for the original, 25-year fixed rate loan to be reverse-engineered into one of only 5 years. Redress for our client meant roughly £40,000 shaved off the outstanding amount of the loan, and approximately £60,000 awarded as cash interest rebate. The loan is now on variable rates (Base Rate, currently 0.10%) rather than the 6.50% fixed that is was on.
The outcome on the second case was also to change the loans (there were three of them) from 25 years to 5 years. The result was worth around £95,000 redress in cash, and cancellation of £90,000 break costs that had been added to the loan.
The third case has secured an offer to change the fixed rate loan term from 25 years to 15 years. This would mean the return of a break cost paid and redress of over £200,000. We have decided to fight on, as we believe there is decent chance of a more equitable conclusion, which would mean cash redress of over £300,000.
We dislike these fixed rate commercial loans. They are unfair, and we not explained in appropriate terms. They render the loan inflexible, and for many of the borrowers (individuals, partnerships, SMEs) the need for flexibility on the loans was spelt out at the origin.
We have run over 100 cases successfully. If you have one of these, or know someone who has, get in touch so we can help.