Several banks sold fixed rate commercial loans in their thousands during the period from 2006 to 2012 and to a very large extent, they failed to explain, or adequately explain that the loans carried the potential for very high redemption penalties (“break costs”) in the event any of the loan terms were varied, or the loan was repaid early. These break costs came to be extremely high, somewhere between 25% and 50% of the loan outstanding. The banks involved include Clydesdale/Yorkshire Banking Group, Lloyds (and particularly its subsidiary the Agricultural Mortgage Corporation) and Barclays.
Often banks “almost hid” the existence of break costs (according to a Financial Ombudsman Service adjudication). Some provided examples of the potential size of break costs, but the calculations were wrong, so the examples gave a false impression of the potential problem.
When borrowers realised the extent of these break costs, or were informed of them by relationship managers when they requested loan redemption amounts, they often made repayment impossible, given the size of the break cost.
We have been tackling these break costs since 2011. We have handled over 100 cases, and unless the bank “times-out” a complaint, we have been successful in getting a rebate of historic interest paid, as well as a conversion of the fixed rate loan to a cheaper, variable rate loan.
If necessary we take the cases through to the Financial Ombudsman Service. We handle the complaints from beginning to end, and can be confident (given our experience) in the likely outcome, and the potential amount of redress.
There any many thousands of these loans out there. We have helped farmers, GP practices, buy-to-let landlords, Vets, as well as on-line retailers. The difference our intervention and help has made has changed lives and business fortunes.
If you have a fixed rate loan, or are an accountant that has a client with one of them, we can help. We don’t necessarily charge up-front fees, as we can work on a contingent basis. We provide initial advice without charges.
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