Hundreds of mortgage prisoners demand compensation from TSB as they are ‘trapped in expensive home loans’
BORROWERS locked into loans with high interest rates could be in line for thousands of pounds of compensation after a law firm brought a claim against TSB.
London-based Harcus Parker is bringing the £800million case against the major bank and initially representing 200 customers, although around 27,000 in total could end up joining the claim.
It comes six years after TSB bought £3.3bn worth of mortgages from Northern Rock, which collapsed following the 2008 financial crisis.
The mortgages were administered under TSB's "Whistletree" brand.
Harcus Parker claims since TSB bought the loans under the Whistletree brand, it has charged its customers almost double the rates charged to its other customers.
It also says TSB refused to allow customers access to fixed-rate mortgage deals, which would have protected them from rising interest rates.
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A spokesperson for TSB said it would ";robustly defend its position" in the case.
They added: "TSB took ownership of the Whistletree mortgages in 2016 and subsequently created access to product transfers for customers who did not previously have access to them.
"Since then, over two-thirds of Whistletree customers have either transferred to a new Whistletree product or closed their mortgage with Whistletree.
"We write to customers twice a year to remind them about the opportunity to switch."
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TSB offers the product transfers to customers even if they are in arrears or have negative equity.
However, Harcus Parker said many of the 200 borrowers bringing the law suit had good payment track records, but were unable to move to a different lender because they didn't qualify under new, stricter affordability requirements.
The case is named a group action, and is similar to one launched for EasyJet customers who were targeted in a cyber attack and had personal details stolen.
There's no guarantee the Harcus Parker lawsuit will be successful, as it depends on the High Court's decision.
And usually in suits such as this, the law firm will take a cut of the compensation if the claim is successful.
What is a mortgage prisoner?
A mortgage prisoner is a borrower who is trapped on an expensive mortgage deal and unable to switch to a cheaper one because they don't pass affordability tests.
An affordability test assesses whether a borrower can afford monthly payments on a mortgage or re-mortgage and whether they should be offered a loan.
Having a large mortgage or being on a standard variable rate (SVR) mortgage, which will change depending on your lender, can make it hard to pass an affordability test.
If you think you might be eligible for a payment under Harcus Parkers' suit, it's worth speaking to a free mortgage broker to see what your options might be.
Some options could include London and Country or Trussle.
Any customers who bought one of Whistletree loans is eligible for a claim.
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And those who took out a "Together Mortgage" may be able to seek additional compensation.
To join the claim, you can go . You could be in line for £50,000 in compensation or more.