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Last Updated: Friday, 22 October, 2004, 19:28 GMT 20:28 UK
Abbey withdraws leading mortgage
By Jennifer Clarke
BBC Radio 4's Money Box

Abbey bank
Abbey insists all other mortgages will conform to the requirements
One of the UK's biggest mortgage lenders has unexpectedly withdrawn a top mortgage deal shortly before new rules come into force which are designed to protect consumers.

Abbey has told BBC Radio 4's Money Box it is temporarily withdrawing its popular Flexible Plus Tracker mortgage just nine days before the Financial Services Authority will start regulating mortgage sales.

It has also pulled two other mortgages, its Deal for Life and Reward products.

Under new rules, customers will have access to a new complaints procedure and detailed information about their loan.

Abbey could not confirm when the deals would be reinstated, but said that its plans to make its mortgage range compliant were "well underway".

'M day'

The new regulations require lenders and mortgage brokers to provide consumers with much more detailed information in a standard format known as a Key Facts Illustration, or KFI.

Once the new rules begin, mortgages without a KFI cannot be sold.

Abbey has insisted that all other mortgage deals it will offer on 31 October - which has become known as Mortgage Day (M day) - will conform to the new requirements.

Around 200 customers whose applications are still being processed will be affected by the decision to pull the mortgages.

Abbey helpline: 0800 555 100
If you have an Abbey mortgage, or have applied for one, and are concerned this affects you, you can call the Abbey helpline for advice
Abbey told Money Box it was "confident" it could complete these before M-Day.

If it cannot, the applications will have to be rejected and customers would have to find alternative mortgages or risk losing their properties.

The bank would not say if the KFI had been prepared for these products, or why they have been withdrawn.

But it did acknowledge they had more complicated features than its "core" mortgages, and said it needed to do "further work" before they were reinstated.

Abbey added it had always planned to offer a "restricted mortgage range" when regulation began, and would "phase in the rest in the near future".

BBC Radio 4's Money Box was broadcast on Saturday, 23 October, 2004 at 1204 BST.

The programme was repeated on Sunday, 24 October, at 2102 BST.

Money Box



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