Harcus Parker, the legal firm representing Whistletree customers in this case, said that it had agreed with TSB to a High Court hearing next year, which would “let a judge rule once and for all whether its Whistletree mortgage customers were financially exploited”.
It added that following the agreement, a two-day hearing on group litigation order application that had been scheduled for this week has been suspended.
The firm represents over 6,500 former Northern Rock mortgage prisoners and more than 1,200 claimants with TSB Whistletree mortgages.
It was confirmed last year that a legal claim had been brought against TSB worth up to £800m by customers for its subsidiary Whistletree.
The Whistletree brand was set up in 2016 to manage North Rock mortgages acquired from the government’s holding firm UK Asset Resolution. It purchased around £3.3bn of mortgage held by around 200 homeowners.
Mortgage holders claimed they had overpaid £50,000 in interest as they allege the firm had almost doubled the rates since loans were bought and until recently they were unable to transfer onto TSB rates.
Damon Parker, senior partner at Harcus Parker, said the step forward was welcome, but urged other mortgage prisoners to sign up to the claim, noting that legal time limitations may curb the amount of compensation they receive.
He added: “The fact that we will now have a trial to decide if TSB has breached the terms of my clients’ mortgage contracts is very positive news.
“It means that the whole process can be expedited. We are confident in our contention that Whistletree customers were unfairly trapped on high interest rates and that they should be repaid back the extra money TSB unfairly charged them.”
Parker said that he hoped to “set a legal precedent” for all mortgage prisoners across the UK.
A TSB spokesperson said that it had agreed with Harcus Parker that they would work together to find a date after 26 June to attend a hearing to decide how the case would be managed going forward.
They said that this may involve the court making preliminary decisions on legal points at the appropriate stage, but any decisions would not be made until next year at the earliest.
The spokesperson added: “Whistletree customers are not mortgage prisoners. Since we took over the management of these mortgages, over two thirds of Whistletree customers have either moved to a new mortgage or closed their mortgage with Whistletree. We write to every customer, twice a year, to remind them that they can switch.”
It is understood that the firm has invested over £1m and introduced the ability to switch to new Whistletree products and better rates.
Product transfers are available for those that are in arrears and may have negative equity, and customers can move to other lenders if they meet affordability and credit check criteria.
