Solicitors say the Skipton 'in breach'

Skipton Building Society may have breached consumer contract regulations when it increased its standard variable mortgage rate for 64,000 borrowers, says a firm of solicitors.
By The Newsroom
Published 18th Mar 2010, 10:36 BST
Updated 18th Mar 2010, 10:36 BST

London-based law firm Leon Kaye Solicitors said it had received advice from counsel that customers affected by the move may have a potential claim under the Unfair Terms in Consumer Contracts Regulations.

The group said it had been approached by more than 100 borrowers interested in making a claim.

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It is considering launching a class action in the High Court, while it has also taken up the issue with City regulator the Financial Services Authority and the Office of Fair Trading.

Skipton announced in January that it was increasing its standard variable rate (SVR), the rate customers revert to when their existing mortgage comes to an end, from 3.5 per cent to 4.95 per cent from the beginning of this month.

The group had pledge its SVR would never be more than three per cent above the Bank of England base rate, except in "exceptional circumstances".

A Skipton Building Society spokeswoman said: "If any legal action were taken, we would deal with it through our normal procedures."

Related topics:LondonHigh Court