- 13
- Jun
Debt campaigners have accused Northern Rock of being too hard on customers who fall into loan arrears and called for the bank to soften its line on bad debt customers, as the bank was accused of being one of the most aggressive banks on the high-street for repossessing borrowers’ homes.
Despite the fact that Northern Rock now owes the tax payer almost £35bn the bank still refuses to negotiate with borrows who are unable to make their monthly repayments. The bank often moves very quickly to repossess properties rather than to allow arrears to build up.
Feedback from debt counsellors to the Consumer Credit Counselling Service has shown that the bank was one of the most aggressive lenders when it came to dealing with its customers who were finding it difficult to pay their bills.
Northern Rock has for often placed a heavy emphasis on the strength of its loan book as well as its low arrears figures. The industry average for arrears is 0.8% of customers, however in the case of Northern Rock that figure drops to 0.4%.
The CCS has claimed that Northern Rock as a rule refuses to accept debt management plans and routinely rejects individual voluntary arrangement (IVA) schemes, which are five year repayment plans.
Instead of offering these debt plans the bank instead offers customers further loans to repay the debts over a longer period, however the bank has denied that this is its policy.
The CCCS chairman, Malcolm Hurlston has called Northern Rock “one of the least charitable on the high street.” However, as a business and not a charity, perhaps at last Northern Rock is offering its shareholders a less risky future.
