Northern Rock is too quick to repossess, it has been claimed.
Nationalised mortgage lender Northern Rock has been criticised by a leading debt charity over its approach to repossessions. Credit Action believes the bank is treating struggling customers too harshly as it rushes to pay back its government loan.
According to the charity, Northern Rock is twice as likely to repossess the home of customers who have defaulted on their mortgage repayments as other lenders. The bank was responsible for over one-fifth of the 19,000 repossessions carried out by banks and building societies in the first half of this year, the organisation claims.
"They are being quite aggressive in terms of their use of the courts in going for repossession, but for a lot of people they don't need to get to that point. If only Northern Rock would be more flexible with them in the first place," says Chris Tapp, director of Credit Action.
Northern Rock has strongly denied the claims. Its chairman Ron Sandler insisted that the bank's position has been completely commercial and not inconsistent with the way it has operated in the past.
Following the recent half percentage point cut in base rates by the Bank of England, Northern Rock announced that it would not be passing on the full reduction to its customers.
