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TSB Whistletree ‘mortgage prisoner’ trial set for next year

Paloma Kubiak
Written By:
Paloma Kubiak

A long-awaited case to decide whether TSB Whistletree borrowers were financially exploited is set to be heard at the High Court next year.

TSB and law firm Harcus Parker have agreed to a High Court hearing next year which would “let a judge rule once and for all whether its Whistletree mortgage customers were financially exploited”. However, the dates have yet to be disclosed.

The case centres on claims by mortgage borrowers under TSB subsidiary Whistletree that they have been trapped into paying high rates by the group.

Whistletree was set up in 2016 to manage Northern Rock mortgages acquired from the Government’s holding firm UK Asset Resolution (UKAR).

TSB purchased the £3.3bn of mortgages held by approximately 200 homeowners. 

It has been claimed that the mortgage holders have overpaid £50,000 in interest as they allege Whistletree has almost doubled the rates since the loans were bought. The group also claim that until recently, borrowers were not allowed to transfer onto TSB rates. 

Harcus Parker represents over 6,500 former Northern Rock mortgage prisoners and more than 1,200 claimants with TSB Whistletree mortgages.

But after it was confirmed last year that a legal claim had been brought against TSB worth up to £800m, the law firm said up to 27,000 customers could potentially make a claim. 

Following the agreement for the High Court showdown next year, a two-day hearing on the group litigation order application that had been scheduled for this week has been suspended.

Case could set legal precedent

Damon Parker, senior partner at Harcus Parker, said the step forward was welcome, but urged other mortgage prisoners to sign up to the claim, noting that legal time limitations may curb the amount of compensation they receive.

He said: “The fact that we will now have a trial to decide if TSB has breached the terms of my clients’ mortgage contracts is very positive news.

“It means that the whole process can be expedited. We are confident in our contention that Whistletree customers were unfairly trapped on high interest rates and that they should be repaid back the extra money TSB unfairly charged them.”

Parker said that he hoped to “set a legal precedent” for all mortgage prisoners across the UK.

‘Whistletree customers are not mortgage prisoners’

A TSB spokesperson said that it had agreed with Harcus Parker that they would work together to find a date after 26 June to attend a hearing to decide how the case would be managed going forward.

They said that this may involve the court making preliminary decisions on legal points at the appropriate stage, but any decisions would not be made until next year at the earliest.

The spokesperson added: “Whistletree customers are not mortgage prisoners. Since we took over the management of these mortgages, over two thirds of Whistletree customers have either moved to a new mortgage or closed their mortgage with Whistletree. We write to every customer, twice a year, to remind them that they can switch.”

It is understood the firm has invested over £1m and introduced the ability to switch to new Whistletree products and better rates.

Product transfers are available for those who are in arrears and may have negative equity, and customers can move to other lenders if they meet affordability and credit check criteria.