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Wednesday, 26 November 2014

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Bank's 'absurd' new mortgage rules hit Cumbrian customers

Cumbrians who take out a mortgage with HSBC will be forced to use a solicitor from outside the county or pay double under “absurd” new rules drawn up by the bank.

HSBC has created a list of 43 law firms that will handle all of its conveyancing work on residential house sales in the UK – none of which is in Cumbria.

In fact the closest is based in Lancaster.

If Cumbrians buying a new home with an HSBC mortgage want to use a local solicitor, they will have to pay twice.

HSBC says the decision was taken to combat conveyancing fraud, which is thought to be worth £1bn a year.

The bank says it is constantly reviewing the list and is encouraging law firms all over the country to apply to be on it.

The Law Society has called the new rules “absurd”.

Its chief executive Desmond Hudson said: “HSBC are leaving their customers in Cumbria with a difficult choice – either let the bank choose a firm, which won’t be in Cumbria, or choose your own solicitor and pay twice for your own and HSBC’s lawyers. That’s not really a choice.

“By spreading their panel of law firms so thinly across the UK, there is a risk that delays in the already delicate residential property market will ensue.

“Many people have used their solicitor for some time to handle all of their affairs, or they have decided to choose a solicitor based on recommendation, or because they used them when buying a home in the past.

“That choice is effectively being removed, or for those who stick with their solicitor, they will be unfairly penalised.

“I don’t doubt that those solicitors’ firms on the HSBC panel are of good quality. Our concern is that there are not enough of them and that customers will be denied using equally capable solicitors.”

Cornwall and Dorset also have no law firms on the panel and Wales has only one.

HSBC said in a statement: “HSBC has not previously had a conveyancing panel and in light of the growth of conveyancing fraud, we identified a need to manage the selection of firms.

“At that time we introduced a screening process for customers’ appointed solicitor/conveyancer.

“Where the solicitor/conveyancer met our criteria, we would instruct the same firm.

“If they did not, we would instruct our own firm at a cost to the customer – a process known in the industry as separate representation.

“We are reviewing the panel on an ongoing basis. The panel is not closed and firms are invited to register their interest so that they can be contacted as and when opportunities arise. There are limited opportunities in certain regions.”

Have your say

I'm not too sure of the ins and outs of this but i bet somewhere down the line hsbc are profiting from this by using there selected solicitors! Big companies like to dictate things to there customers and this is just another example of that!! totally disgraceful

Posted by Paul on 6 March 2012 at 12:53

Iain, I get your point about their mortgages and I don't know much about it so couldn't comment, but it's a bit harsh saying it would be better if they didn't do business here at all. I would like to point out that (as another reader already has done) HSBC were on of the banks that came out of the credit crunch intact. The very fact that it is not purely based in the UK and Europe means it is a safer bet with regards to savings.

Posted by KM on 5 March 2012 at 18:01

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