Existing customers

Information for existing customers of NRAM holding CCA regulated loans.

What is the Consumer Credit Act?

The Consumer Credit Act (CCA) is a complex piece of legislation that is designed to give protection to consumers by requiring that all businesses who lend money, or offer goods and services to customers on credit are licensed by the Office of Fair Trading (OFT) until 1 April 2014 and thereafter by the Financial Conduct Authority.

The CCA regulates the way in which a business conducts the process of lending money or offering credit. For example, there are rules on advertising, pre-contract disclosure, credit agreements and post-contractual information, such as letters and statements.

In the case of loans taken out before 6 April 2008, the CCA only applies where the amount we agreed to lend you (the amount of credit) was £25,000 or less.

Is my loan CCA regulated?

If your loan was taken out before 6 April 2008, it will only be CCA regulated if the amount we agreed to lend you (the amount of credit) was £25,000 or less.

We wrote to affected NRAM customers following the 2012 review, providing specific details about the impact on their loan account which may have included the amount of redress, revised monthly payments and revised term end date where applicable. We have also written to customers affected by the 2014 review.

Is my loan affected by these issues?

If your loan is CCA regulated, this does not necessarily mean that you have been affected by these issues. This depends on whether you have been sent any communications that did not comply with all the requirements prescribed by the CCA.

We wrote to affected NRAM customers following the 2012 review, providing specific details about the impact on their loan account which may have included the amount of redress, revised monthly payments and revised term end date if applicable. We have also written to customers affected by the 2014 review.

If you hold more than one loan with NRAM, you will have been sent a specific letter for each loan affected by these issues.

Please note - if you hold an unsecured personal loan with a 16 digit account number, we can confirm you were NOT affected by these issues. Our review determined that the communications sent to you during the term of these loans followed the exact format prescribed by the CCA.

Has my mortgage been affected by these issues?

The majority of mortgages that were taken out with the former Northern Rock plc were not affected by this issue. However, you could be affected by these issues if you took out one of the following mortgages:

  • Lifetime mortgage - certain types of equity release mortgage are regulated by the CCA.
  • Together mortgage (that combines a secured loan with an unsecured loan) - the unsecured loan element is potentially regulated by the CCA
  • Personal loan (secured against your property) - these accounts are potentially CCA regulated

We wrote to affected NRAM customers following the 2012 review, providing specific details about the impact on their loan account which may have included the amount of redress, revised monthly payments and revised term end date if applicable. We have also written to customers affected by the 2014 review.

Please note - if you took out a further advance on your mortgage, this type of loan was NOT affected by this issue.

My loan was for home improvements, why does that mean I'm not entitled to redress?

Loans for home improvements are specifically exempt from CCA regulations, therefore you were unaffected by this and you are not entitled to redress.

What if I have more than one loan that was affected?

You will have been sent a specific letter for each affected loan.

What is the impact?

If the 2012 review found that your existing loan is CCA regulated, and that you were sent any communications that did not comply with the requirements prescribed by the CCA, then we will have already sent you documentation containing the correct CCA wording and information. You may have also been entitled to redress.

Where redress was required, we corrected your account balance* to reverse the consequences of charging you interest during the period of non-compliance.

Your account balance will have been reduced* by an amount equal to the interest that you were charged over this period. If any default charges were applied to your account during this period, these will also have been refunded via the reduction in your loan account balance.
* We wrote to affected NRAM customers following the 2012 review, providing specific details about the impact on their loan account which may have included the amount of redress, revised monthly payments and revised term end date if applicable. We have also written to customers affected by the 2014 review.

How does this affect any arrears on my account?

If the redress amount is greater than the amount of arrears on the account, applying this amount removes all arrears outstanding for this specific account only.

If the redress amount is less than the amount of arrears, the arrears balance simply reduces by the amount of redress.

Does such redress affect my credit file?

Where redress reduces arrears on your account then this lower arrears figure will be reported to the Credit Reference Agencies going forward, but there will be no retrospective amendments of recorded defaults on your credit file.

What if NRAM registered a CCJ or Charging Order against my property?

Following the application of redress to your account, the CCJ or Charging Order on your property automatically reduces to the revised, lower amount.

How does this affect any shortfall on my account?

Redress is applied to the outstanding shortfall on your account and the shortfall balance is adjusted accordingly.

Following these changes you are welcome to contact us on 0845 603 5509* to discuss the next steps for your account.

If I have received redress, will there be any tax implications?

If you have used the original amounts of interest paid to calculate your tax liability, you may need to check your calculations to make sure that you have paid the right amount of tax. Your advisor or HMRC will be able to help you if you need to amend a tax return because of changes to interest paid, or if you need to make a payment on account of any additional taxes.

What should I do now?

You do not need to contact us, or anyone else about this issue.

We wrote to affected NRAM customers following the 2012 review, providing specific details about the impact on their loan account which may have included the amount of redress, revised monthly payments and revised term end date if applicable. We have also written to customers affected by the 2014 review.