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Posted on 24th August 2014 |
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The situation described in this BBC story is utterly outrageous. A court has just ruled that mortgage customers of the Bank of Scotland were unfairly double-billed when they fell into arrears, although the bank plans to appeal. What the bank did, when customers fell into arrears, was what is called capitalisation: the arrears amount (including and surcharges for being in arrears) were added to the capital amount owed. This standard practice has the obvious effect of increasing the amount that customers owed, and the time it would take to pay it back. This all seems perfectly fair. The problem was that the bank then continued to pursue the arrears as unpaid charges (presumably including additional late fees) and in some cases even started repossession action against the borrowers. The judge seems to have been quite scathing in his judgement, and rightly so. I suspect that the bank may appeal on technicalities, because as far as I can see, there is no way to see this as anything other than double-billing. | |