Mortgage giant still holding tight over pay-outs

Halifax is still refusing to pay compensation to borrowers who lost out due to its dual interest rate policy.

Despite an adverse ruling from the Financial Services Ombudsman and the example of rival Nationwide which is offering to pay out to all customers who suffered from a similar scheme, Britain's biggest mortgage lender is sticking to its hard line.

It is ignoring recompense requests and, in some cases, fobbing off customers who have sent letters asking for a deadlock letter so they can appeal to the ombudsman.

The Halifax says that only those who made an official complaint before February 1, 2002 qualify for a payout.

And that, says Halifax customer Anita Akinbayo, puts her in a "Catch 22" position.

"They say I don't count because I did not ask for a transfer to the lower rate. But when I asked once before about a different deal, they told me I would have to pay a 4% exit fee - around £1,840 on my £46,000 loan. So what was the point of asking," says Ms Akinbayo, 40, a housing association worker from Croydon. She has had a Halifax mortgage for 12 years.

"I was a great Halifax fan. It helped me out of a negative equity situation ten years ago and I remortgaged my flat with them in 1999 on to a five-year loan capped at 6.5%. But my view has changed ever since Halifax ignored my complaint on their dual rate structure based on the letter Jobs & Money printed earlier this month," she says.

This asked Halifax to move customers straight to a deadlock so the ombudsman could be involved.

She received a letter back stating the ombudsman decision was on an individual basis, and that she should have applied previously for the lower rate which would have saved her 0.75% in interest.

"As the Halifax never told me about the lower rate, it would be interesting to know how I could have done this. Had I known they were planning this, I would have reconsidered my decision to move to a capped loan" she says.

It did send her £100 compensation as a reply to her letter. But she will not be banking this, in case "they deem this to be acceptance of their offer."

The Halifax also sent a three page "summary" of the ombudsman decision. But a Halifax spokesperson admits that "there is nothing in this briefing which explains how we arrived at our decision not to compensate those who applied after January 31."

Halifax shrugged off her written demand for a deadlock letter based on Jobs & Money's "sample".

"So I phoned this time and the Halifax told me I would have to write again. I did this but all I received was a letter identical to that with the £100 cheque but without the money or any reference to it this time," she says.

The lender says that sending the letter twice was due to "human error". It promises her a deadlock letter.

Ms Akinbayo will no longer look at Halifax loans as she starts home hunting.

"I need to move to somewhere bigger and that is going to cost me. I shall need at least a £100,000 mortgage but I shall not go to the Halifax - there are attractive deals at Nationwide and Britannia to think about," she says.

Mortgage experts say the Halifax will lose out as a result. They calculate that it would cost Halifax around £250 extra to compensate her fully on top of the £100. And £250 is below the cost of signing up a new £100,000 customer.

Abbey National customers are still waiting for a dual rate decision. Abbey is telling customers to hold off and wait rather than appeal to the ombudsman on the grounds there will be a final decision before complaints reach the ombudsman.

What the Halifax says

"We launched our dual mortgage rate because we wanted to improve the deals available, in particular, for existing customers and that remains our policy. Our policy has been very successful. In the last 18 months, over 450,000 existing customers have switched to better deals with many taking advantage of our lower variable rate. Many are saving significant amounts of money and the number of customers who are already benefiting is more than the total mortgage book of most other lenders. Following the ombudsman's ruling, we have had a close look at all of the principles underpinning that case and have decided how we will implement them. In doing so we are providing clarity and certainty for our customers. The bottom line remains the same though - Halifax is one of the few lenders which has actually sacrificed profits in order to provide customers with a better deal."