It is reported to me by many Insolvency Practitioners that Northern Rock has been a real thorn in the side of consumers and Insolvency Practitioners. Basically Northern Rock is refusing all or nearly all IVA repayment proposals submitted to Northern Rock to properly consider and vote on.

Maybe it would not be so bad if they would give specific reasons for refusal but they remain silent and stoic. A little birdie with inside knowledge at Northern Rock tells me that the folks at Northern Rock are trying to find any and all reasons to bat away IVA proposals. It's almost like a game there.

Northern Rock Rejects IVA Proposals With Record Profits

This message has been received loud and clear by IPs, who now routinely refuse to waste their time preparing IVA proposals for people with substantial Northern Rock debt since they know these proposals will not receive the honest review and attention they deserve, before being sent to the landfill. This means that debtors that could have otherwise resolved their financial problems with a binding IVA in five years are now either shoved towards bankruptcy or sent to repayment limbo in a 20 year debt management plan.

Worse yet, apparently the Northern Rock voting powers are fractured among several parties and this makes a crazy situation even more chaotic. When Myvesta UK  confronted Northern Rock through a client, about these unfair and unreasonable policies the response was not that they treat consumers fairly, but the they treat consumers similarly.

Debtors in the UK today that were unlucky enough to fall for Northern Rock marketing of easy credit may find themselves stuck in credit hell if they have financial problems. In cases where Northern Rock is the majority creditor, consumers are not even able to put forward a fair and reasonable repayment plan.

Don't even get me started about the useless British Bankers' Association, wink and nod Banking Codes. You know which banking codes I'm talking about right? The ones that the BBA says are "..standards for banks, building societies and other banking service providers." The Banking Codes that some creditors like Northern Rock seem to think need not to be followed. If you want to get a good laugh, read section 14 of the BBA Banking Code and then tell me how Northern Rock is abiding by the code or even the spirit of the code.

With such blatant disregard and corporate abuse of consumers it's time for you to write your government representatives and ask them to make the banking code law instead of the boy's club fake rules that they are.

Maybe Northern Rock Consumer Contracts Can be Cancelled and Voided

It seems to me that Northern Rock has now created a clear paper trail of bad IVA behaviour based on all the cold hearted rejections. Certain Insolvency Practitioners are accumulating such cases and they tell me that they want to file these in a super complaint with the Office of Fair Trading.

Northern Rock is out of step with most creditors policies when it comes to IVA acceptance and rejections. While some creditors still accept IVA proposals, others set stupid and unfriendly hurdle rates (yes HSBC, I'm talking about you), it appears the Northern Rock policy is an across the board 'NO' to as many IVAs as possible.

To make matters worse, Northern Rock is also playing unfair games with consumers that were unfortunate to get loans from Northern Rock above the equity in their home. As I understand it, Northern Rock is insisting that the portion of the loan, above that secured by the house, is not an unsecured loan and they treat is as a secured loan.

So here is what may be the weak point in the Northern Rock position that might just allow people to void their consumer credit agreements with Northern Rock and walk away from the deal all together. See what you think.

Northern Rock does not portray to the world that they will not accept or consider fair offers for repayment from Insolvency Practitioners through an IVA. Northern Rock portrays themselves to be participants in the BBA Fake Banking Code. Fake might be a bit harsh. Let's just stick with calling it the Wink and Nod Banking Code.

By claiming that Northern Rock participates in the code, but actually not honouring the relative sections of the code for debtors, Northern Rock might create several violations of European Union current and coming directives. Consider these facts.

1. Because Northern Rock fails to abide by the Banking Code and has a silent practice of routinely blocking fair and reasonable IVA proposals they have created a corporate lending practice, which is material to the consumer, but not disclosed in the agreement between Northern Rock and the consumer.

If people understood, before they signed an agreement, that Northern Rock was going to disregard there pleas for help if they got into financial trouble, some consumers would not enter into that agreement. This is nothing more than an intention by Northern Rock to appreciably impair the consumer's ability to make an informed decision, thereby causing the consumer to make a transactional decision that he would not have taken.

2. Northern Rock has created a commercial practice that misleads by omission. The directives say that a practice is misleading by omission if it fails to provide the minimum information or factual information that the average consumer needs prior to purchase.

3. Furthermore a practice is misleading by commission if it gives false information or deceives or is likely to deceive the average consumer, even though the information given may be factually correct, like we are members of the BBA and subscribe to the Banking Code, even though they disregard it when you get into financial trouble.

4. Finally, under EC directives, a contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.

These unfair terms include: Making an agreement binding on the consumer whereas provision of services by the seller or supplier is subject to a condition whose realization depends on his own will; Requires any consumer who fails to fulfill his obligation to pay a disproportionately high sum in compensation; Irrevocably binds the consumer to terms with which he had no real opportunity of becoming acquainted with before the conclusion of the contract; Enables the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract.

The Ultimate Northern Rock Corporate Joke

So all the IPs that are calling me and emailing me with complaints of bad behaviour by Northern Rock in its abuse of consumers would fall out of their chairs if they knew what I just discovered by accident today. Get this, Northern Rock has a charity, the Northern Rock Foundation, that actually has the nerve to claim that their mission is:

"To tackle disadvantage and to improve quality of life in North East England and Cumbria. To achieve these objectives, we invest in charitable activities that help those most disadvantaged in society, and that make our area a place for everyone to enjoy and celebrate." I've got breaking news for you, some of the most disadvantaged may be the Northern Rock customers that are not allowed to resolve financial problems with fair and reasonable IVAs.

The Northern Rock Foundation is funded with 5% of Northern Rock’s annual pre-tax profits.

So get the irony here. Northern Rock is screwing disadvantaged consumers by blocking, refusing or misleading them regarding their ability to get binding help in an IVA by Insolvency Practitioners. They then take 5% of the profit from those people and give it to their Foundation to help disadvantaged people. Sounds almost like a poor tax to me. Anybody heard of Blood Diamonds?

You can't make up this kind of stuff, nobody would believe it.

Northern Rock, I'll Be Fair and Reasonable, Even If You Won't

If Northern Rock wants to offer a response to these issues, I will gladly publish any communication I receive from them or their representatives here.

However, if I wanted to act like Northern Rock I'd claim that I subscribe to the article writers code that says I will carefully review all responses and then when they write me I'll just toss it in the trash and say that my unwritten policy is to not consider responses because the writers code is voluntary. And then I'll make them pay extra for the privilege of not posting their response.

Seriously, have a comment, rate this article and enter your comment below.

Related Links

Northern Rock Foundation
Northern Rock Annual Reports