It is understood that TSB Bank is facing a legal action worth up to £800m, brought by customers who claim they were locked into mortgages with ‘excessively high’ interest rates.
Today, six years to the day since TSB bought £3.3bn mortgages from Northern Rock, approximately 200 homeowners whose mortgages have been administered by TSB’s ‘Whistletree’ brand have issued claims for around £50,000 each in overpaid interest.
Harcus Parker, a law firm of specialist group action solicitors which is bringing the case in the High Court, confirmed this morning that up to 27,000 people could ultimately join the Whistletree claims litigation.
Since TSB bought the loans, the lawyers said it has charged its Whistletree customers almost double the rates charged to its other customers.
“Until recently, it had also refused to allow these ‘mortgage prisoners’ to access to ‘ordinary’ TSB fixed-rate deals on the same basis as its other customers,” a statement shared with this paper read.
“Many of these borrowers have unblemished repayment histories, but have been unable to move to another lender because they would not qualify under new, stricter affordability requirements imposed by regulators.”
Anybody whose mortgage has been administered by ‘Whistletree’ is eligible to claim, the firm stressed.
Customers who took out a ‘Together Mortgage’, which allowed borrowers to access lending of up to 125 per cent of the value of their homes, may be able to seek additional compensation.
“At a hearing at the Chancery Division of the High Court will be asked to make a Group Litigation Order, consolidating the claims and making it possible for anybody who has ever had a mortgage administered by ‘Whistletree’ to seek compensation,” according to the statement.
in response to the action TSB said “it is aware of potential action proposed by Harcus Parker and will robustly defend its position.”
A spokesperson shared: “We are committed to treating our Whistletree customers fairly. 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.”