Bank Account, Credit Card & Mortgage Penalty Charges
There has been considerable press interest in succesful claims by ordinary members of the public for both unfair bank penalty charges and unfair mortgage exit fees. .

Mortgage Redemption Fees
Mortgage redemption fees are also known as exit fees, sealing fees, deeds fees and release fees. The idea is that they are to cover the lender's costs in closing down the mortgage and sending the deeds on elsewhere. However, these charges are often effectively a "hidden tax" in that the charges usually far outweigh the true cost. These fees have increased significantly in recent years. Amongst the biggest increases in fees are Cheltenham & Gloucester from £50 to £225 in 5 years and Abbey & Natwest from £85 to £225 in the same period.

	Exit Fees
Mortgage Provider	10 Years Ago	5 Years Ago	Now
Abbey	£50	£85	£225
Alliance & Leicester	£90	£150	£295
Bank of Scotland	£50	£150	£195
Bristol & West	£50	£100	£195
Cheltenham & Gloucester	£35	£50	£225
Halifax	£55	£125	£225
Nationwide	£67	none	£90
NatWest	£65	£85	£225
Northern Rock	£75	£150	£250
Royal Bank of Scotland	£80	£75	£225
Woolwich	£50	£95	£275
Yorkshire Bank	none	none	£195

Source: Moneyfacts.co.uk

What's happening now?
While bank and building society profits keep increasing, these charges are now being viewed as unfair. The FSA have said that where the fee has increased during the lifetime of the mortgage, the borrower should only have to pay, the fee that they agreed to at the beginning of their mortgage. Northern Rock was the first to respond saying that they will set aside £15 million towards such claims.

How do I get a Refund of Exit Fees?
Many people will be able to reclaim at least part of the fees they have paid. You need to check out what fees were in place at the beginning of your mortgage, and what you actually paid at the end. Then write to your mortgage provider in simple terms setting out the facts, including the address of the mortgaged property, your account number and how much you are claiming. The mortgage provider then has eight weeks in which to deal with your application for a refund. If they do not reply, or refuse your claim, you should send them a "Letter Before Action" and then issue legal proceedings against them in the County Court.

Whilst Northern Rock are the first to set aside funds to meet claims for unfair exit fees, it is expected that Abbey, Alliance & Leicester, Halifax, Natwest etc will all be forced to set aside funds to meet claims for repayment of these exit fees.

More about reclaiming unfair bank charges.

NOTE: This website is for information only and should not be relied on for making financial decisions.

© CoolBlue - Unfair Mortgage Exit Charges