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Written by Emma Lunn

The long-awaited court case over increased tracker rates by West Brom building society began on Wednesday.

The lender is accused of illegally ramping up rates for about 6,200 buy-to-let customers.

In December 2013 West Brom upped rates by two percentage points on some tracker mortgage deals aimed at landlords despite no change in the Bank of England base rate.

Customers were told their rate had been hiked because of ‘market conditions’ and to ensure it was running its business ‘prudently efficiently and competitively’.

Property investor Mark Alexander took the case to the High Court on behalf of 350 other disgruntled landlords.

Alexander said their tracker rates should be protected under the terms of their mortgage agreement while West Brom claimed it was able to override these terms if it was deemed necessary.

Barrister from Cotswold Barristers Mark Smith, representing the landlords, told Mr Justice Teare that the building society’s actions were unfair and that the clauses in the mortgage contracts used to justify the rate hikes are ‘inconsistent’.

The West Brom claimed it had only used its discretion to vary the tracker rate for customers who own a portfolio of three or more buy-to-let properties.

If West Brom win the case it could give the lender, and others, the go-ahead to up rates on other tracker mortgages for both landlords and owner-occupiers.

After the hearing Alexander Tweeted that the judge had been “tough on both sides”. He described the case as a “cliffhanger” but added that “consensus amongst attendees was that our closing arguments were stronger.”


 

Comments

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    West Brom are the tip of an ugly greedy bunch of unscrupulous lenders.
    Don't hold your breath for a favourable decision for the hapless borrowers.
    The lily livered government we have in the UK could have done something about this scandal years ago but instead does nothing as so many of them have vested interests involving the self same Shylock lenders.

    • 23 January 2015 12:31 PM
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    Mark...

    Don't expect much... These people (lenders) get away with absolute murder. However this will be landmark for how other lenders will treat us all.

    I wonder if a complaint went to the financial ombudsman too? Probably and as always they would have sided with West Brom, after all the ombudsman is just a expensive customer services department of lenders and insurances companies, designed to wear us down.

    I hold no hope here for the consumers, but do worry for the future.

    I bet its costing a fortune too...

    Also the judge was tough on both sides? WHY? These consumers took out an agreement and the crooks at West Brom changed it... So why be tough on both sides?

    AS consumers, can we make the same changes or is that only a one way road?

    • 23 January 2015 10:33 AM
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    I will wait to see where it goes with west Bromwich in court as I have a mortgage with them as I also have a mortgage with T.M.B and they have done the same when interest rates go up they put it up but when there go down they keep it the same
    Regards
    Mark

    • 23 January 2015 10:11 AM
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