Mis-selling Could Affect You!

Forest How Guest House is situated in the beautiful Eskdale valley in Cumbria.  It sits within 5 acres of countryside and provides guests with a natural wildlife show daily.  You can often share your breakfast with red squirrel, deer and a host of different birds!

Our clients own and operate the Forest How Guest House and found out the hard way how costly a mis-sold loan can be. After re-assessing their financial outgoings our clients decided they wanted to refinance their business, it was only then that they found out just how much money the bank wanted to charge them to repay their loan early.  As a consequence they were stuck in a situation where their business was incurring high interest charges which affected their profitability and that it would cost them thousands of pounds in redemption penalties if they were to refinance.

During the recent recession many small business owners were encouraged to take out Fixed Rate Business Loans, business owners were advised that fixed rate loans were a condition of lending and that it would protect against interest rates going up.  Unfortunately what they didn’t say was that if interest rates went down they would be paying a premium for their loan and they would incur substantial redemption charges should they choose to switch their loan to a standard variable interest product.

Fixed-rate loans often have high breakage costs. These breakage costs are in fact complex derivative products which were usually unsuitable for SMEs and were mis-sold to them. These types of loans are referred to as Hidden Swaps (or sometimes embedded swaps) and there has been much discussion in the media recently about this.

After careful consideration our clients decided that a standard variable commercial mortgage would be better suited to them and asked that Stewart Hindley & Partners refinance on more favourable terms.

The refinance was only the first step… once the new mortgage was in place we advised our clients to seek advice on a mis-selling claim which they have now done.  They are now in the process of making a claim against their previous lender for the fixed interest portion of the loan together with consequential loss, the costs involved in changing lenders and the costs of seeking expert advice.

A comment from Deb Edwards:-

“What can I say? I stumbled across Stewart Hindley’s website at a time when we were completely disillusioned with the services (or lack of them) being offered by our existing lenders, a popular High Street bank. We had made the decision to refinance and an email was sent to Stewart Hindley requesting that they contact us which, very promptly, they did. Chris made the journey up to Cumbria and we were immediately put at ease by him and had every confidence that he would find us the finance we needed. We were asked to request a redemption figure from the bank which we duly did and, after numerous phone calls to chase the information, we were finally given the figure plus the ‘break cost’ required to terminate the loan early.We were horrified as, being totally naïve in the world of commercial finance, we had no idea that we had signed up to a loan with such excessive break costs attached. Chris immediately liaised with the bank on our behalf and, to cut a very long story short, the decision was made that we should continue with our refinancing plans (which Chris successfully arranged) and, at the same time, pursue a claim of mis-selling against our original lenders.  

Throughout the whole, very stressful, procedure, Chris and Carol were calm, professional and helped us far beyond the call of duty and I cannot praise them highly enough. I would not hesitate to recommend them or to use their services again (watch them diving for cover and blocking my phone number and email address!!). Carol particularly was so patient, listening quietly to my rantings over the phone when I needed to let off steam to someone who knew what we were going through and I can’t thank her enough for that.   

Deb Edwards


If you would like to discuss refinancing or mis-selling call us now on 0845 272 4000


Stewart Hindley

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