Debt charity criticises Rock
Article Category: IVA (Individual Voluntary Arrangement) Help and Advice
A debt-charity has criticised soon-to-be nationalised Northern Rock for the way it treats hard-pressed borrowers.
Malcolm Hurlston, chairman of the Consumer Credit Counselling Service (CCCS) said in an interview with Channel 4 News that the high street bank had a "poor reputation" among debt counsellors.
He said that they were particularly concerned about the group’s Together Mortgage, which combined a mortgage and an unsecured loan.
The practice of "bolting" on unsecured lending on to secured debt meant that sometimes the total amount owed by people was often more than the value of their property.
In addition, the way a single payment was taken to cover both loans meant that sometimes part of the secured loan, which should be the priority, was misdirected to the unsecured debt.
There are concerns that Northern Rock is also unwilling to enter into individual voluntary arrangements (IVAs).
Mr Hurlston said: "You would burnish your reputation by reviewing these dubious policies."
The government has said that it hopes the nationalisation of the Northern Rock will be a short-term measure.
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