Your consumer champion Barclays charged me £30k to leave a £1m mortgage that I didn’t want in the first place

QLast year my wife and I were looking to remortgage our property, so my mortgage broker applied for a rate from our then lender, Barclays. In the end we found a better rate elsewhere and decided to go with that. So imagine my surprise when Barclays said I had to pay an “early repayment penalty” of £30,000. This is because it claims I initiated the new mortgage, which was for nearly £1m, and then cancelled it after just a few days.

I am absolutely livid, as I did no such thing. At no point did I sign a new mortgage contract and I had no direct dealings with the bank whatsoever. I was horrified to receive an offer letter stating that I needed to take no further action and that the mortgage would automatically start.

This is absolutely not what we asked for. We asked for a rate that we could compare with other deals on the market so we could make a decision about what was best for us.

I have made many calls and sent numerous letters and emails to Barclays, yet it has been unable to provide any documentation to show that I signed a mortgage offer. So how can it possibly maintain that I am liable for this early repayment charge?

A payment for nearly £5,000 has just been charged to my account for this mortgage. This has been going on for more than a year, which is totally ridiculous. Nothing I say seems to make any difference.

– CW, via email

A

Early repayment charges are designed by banks to protect the income stream they earn from the interest that borrowers pay. Such penalties are supposed to discourage borrowers from signing up for fixed deals and then changing their minds part-way through the term. This is just business.

But clearly here, where you never intended the mortgage to go ahead in the first place, an early repayment charge was completely inappropriate.

For a start, having signed on the dotted line with another lender, you had no idea this Barclays mortgage was even being set up. You employ a broker to handle your mortgage affairs and he had booked this Barclays rate before your old two-year deal expired. It was only supposed to be a fallback while he searched for better deals for you. This is standard practice in the world of mortgage brokerage.

After initially booking this Barclays deal for you, your broker found you a lower rate with another lender. You went ahead with this and were given a completion date on which you were expecting your loan to move across. This date was supposed to be the same day your previous Barclays mortgage ended, which was a Friday.

Unfortunately, because of administration delays the new mortgage didn’t go ahead on time and was not set up until the Monday. This meant the fallback Barclays mortgage automatically went ahead and, because it was a remortgage rather than a new one, it did not require a signature.

Instead of recognising this situation for what it was, which was an administrative bungle, Barclays decided to treat you as a customer who had knowingly walked out of a fixed deal early. To me, this attitude is quite clearly ridiculous.

Happily, following my involvement the early repayment charge has been removed and the £ 5,000 you were forced to pay has been refunded. Why it has taken a year, and the involvement of this column, for this to happen is beyond me.

A Barclays spokesman said: “We are very sorry that Mr and Mrs W have had cause to complain. We can confirm that the early repayment charge has been removed and that we are returning the monthly repayment that we received.

“The mortgage rate was switched following an instruction from their independent mortgage broker, which we now understand was made in error. We would like to apologise for the distress and inconvenience caused.”

US vitamin recall saw Amazon take $150k to refund my customers

Q

I run an Amazon US shop through which I sell various health-related products. In April the American authorities recalled some supplements I had been selling in large volumes, as they were found to potentially cause heart attacks. Obviously this was very upsetting. I had no idea they were harmful until the recall, after which I didn’t sell a single pack. In fact I stopped selling them last year, which was way before the recall.

I was shocked when Amazon refunded my customers for every pack I had ever sold, taking $150,000 out of my account to pay for it. This is a huge sum of money to me. I saw you dealt with a similar case in relation to Amazon forcing small businesses to pay for recalled Kinder Eggs, which went against the advice of their manufacturer, Ferrero. Can you help get Amazon in the US to do the same thing for me?

– DC, via email

A

After I contacted Amazon UK about sellers being unfairly penalised for poisonous Kinder Eggs they weren’t responsible for producing, it quickly capitulated by reimbursing them. It appeared the action was the result of an over- zealous algorithm, which it was happy to correct.

Now I have discovered that Amazon has a different policy in the US. Its terms and conditions allow it to refund customers for items sold and later recalled, effectively forcing sellers to pay for mistakes made by manufacturers. This strikes me as ludicrously unfair on sellers. It means that to guarantee dodging this trap you’ve fallen into, sellers would need to possess psychic powers that allowed them to predict product recalls.

I am no expert in American law, but frankly I don’t need to be to think that Amazon’s US policy lacks any fairness or common sense. You probably should speak to a lawyer, though. I wonder whether you and the other affected sellers could club together and start a class action against Amazon in America?

My advice to sellers in Britain is to think twice before you sell in the US, unless you can afford to refund all your customers in the event of a recall.

An Amazon spokesman said: “Our customers’ health and safety is of the utmost importance to us. We notified past customers alerting them to this safety notice and provided customer refunds. We made sellers aware that Amazon would be notifying and refunding consumers and seeking immediate reimbursement from them. This is in line with our safety policy.”

Insurer’s attempt to gag our reader backfires

Regular

readers of this column may remember the recent case of Tashi the dog, who lost a leg in a freak car accident. Tashi jumped out of the boot of her owners’ car and was dragged along behind it while still attached to her lead, resulting in her losing a leg.

Her owners’ insurer, Waggel, and its underwriter, Red Sands, refused to pay Tashi’s vet bills. This was because they said our reader had endangered her dog’s life while getting her into the car. Following my involvement in the case, Red Sands changed its mind and agreed to pay £6,000, but only if the customer signed a non- disclosure agreement. This would have prevented the story being told and the companies being named and shamed. Tashi’s owner bravely declined to sign, told her story on these pages and then asked the Financial Ombudsman Service to resolve the case.

Well, I’m pleased to report that the ombudsman has forced Red Sands to cough up £ 6,000. This was the right result. To say I’m satisfied that Red Sands’ attempts to buy this customer’s silence were thwarted is an understatement.

Companies that think gagging people to stop word spreading about their bad behaviour need to hear this: what goes around comes around.