Northern Rock – so what’s changed?

12 months is a pretty long time for anyone – anyone or any company.  In the last year we’ve seen a prince break his girlfriend’s heart, whilst his brother secretly recaptures his;  the first US Black President elected, and the reluctant admission that Britain really is in a recession.  Who knew hey?! 😉

A year is a long time – 365 days of playing the chance card – throwing the dice to see if you’re luck is in; turning on the news to see if it’s going to be a good day, or bad?  7 days a week of counting the pennies and working out how long they’ll last.  24 hours a day to panic about the post waiting for you when you get home.
A year is a long time.
It’s now coming up to Northern’s Rocks one year anniversary as Britain’s first nationalised bank and many of us feel it is time to review their progress and evaluate how far they’ve come, and in whose interest.
September 14, 2007 saw thousands of British savers rush to Northern Rock, take out their money and wonder if they’d got their in time before the bank went under.  People were set to loose thousands that had taken years to save.  In nearly 150 years, Britain hadn’t experienced a crisis like this.  The Bank of England, in partnership with the Government, made the only decision they saw viable…to rescue the damsel in distress.  The said “damsel”  (Northern Rock) then married her “prince charming” (The Government), thus becoming the first ever UK nationalised bank.  As a matter of fact, I think we (the public) paid for the ring 😉
A year on, Northern Rock are making good, if not slow, progress.  Their public persona is often perceived as a safe haven to many consumers due to its connection to government funding and protection.  Not necessarily an accurate account of its stability, but this has helped the bank enjoy an increase of client accounts.
In its first year of marriage Northern Rock has also confirmed their decision to offer more attractive mortgage lending options to homeowners.  However in doing so, we ask, will they fall foul of their own repayment plan to the Government – I wonder what their own Debt Management Plan is? 😉  Despite this, the decision is expected to prove popular with the “crowds” as they also confirm a less aggressive approach with current clients coming to the end of their fixed term agreements.
As ClearDebt, our relationship with the Rock is less to do with what they have lent and more to do with who they lend to – and the bank’s willingness, or lack of, to help these borrowers when they fall on hard times.
As we’ve continued to assist our clients in IVA and Debt Management Plans, we noticed a considerable increase in complaints about the rising number of IVA proposal rejections being received from Northern Rock.  By summer 2008, these complaints were stacking up and we knew something had to be said.
Although other creditors would approve IVA proposals, time and time again, Northern Rock rejected them stating reasons that, as Chairman of the Debt Resolution Forum (DRF), I considered to fail to adhere to IVA protocol.  It was quite shocking that a bank which had been saved by the tax paying public, was now working against them when they needed their support the most.
As the amount of declined IVA proposals increased from Northern Rock, consumers in debt were forced into a situation where they then had to consider taking out a debt management plan.  Debt Management Plans work well for clients, but they’re not a first choice when you know, and we know, that you’d qualify for an IVA and this would suit you better.   Overall, Northern Rock approved just 60% of cases submitted, claiming the remaining 40% failed to meet their protocol.  Their refusal to address my concerns, failed you, the public, and my own company, CleartDebt – who were desperately trying to assist clients keen to address their debt.
After an escalation of heated emails, clashes of opinions and rejected IVA proposals, I finally got Northern Rock to meet me and, after much debate, we finally received agreement they would re-assess their criteria for agreeing IVA proposals.
As we see the first anniversary of this nationalised bank, I can gladly say, the proposals signed off by them has increased to an average of 85-90%.
In a time when debt continues to loom over us like a black cloud, I can’t help but ask, why was it such hard work to get a state funded bank to support the taxpayer who funded it, and help them help themselves create more stable and sensible finances?  At which point does a state project prioritise commercial interests over consumer ones?

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