Openplan flexible mortgage
Barclays Bank Plc, trading under the name of Woolwich
What did we think was unfair?
There were four terms in this contract that allowed Barclays to vary their Woolwich Openplan Flexible Mortgage without specifying valid reasons for doing so.
Why did we think it was unfair?
We thought this caused an imbalance in the rights and obligations of Barclays and their customers, to the customer’s detriment.
What has the firm done?
Barclays deleted term 2 of the old terms listed below and replaced it with a revised term 2 effective from July 2006.
The remaining three old terms that we thought were unfair, were either amended or deleted when Barclays introduced new terms and conditions that came into effect in March 2007.
For existing customers still subject to the old terms (or other Woolwich mortgage contracts containing the same term or a similar term with the same effect) the firm has agreed the following.
- To only rely on term 1 below in circumstances where:
- the firm becomes aware of, or suspects that information the customer has provided in their application (on which the firm has based its lending decision) is incorrect or misleading and, in such circumstances, it would be against the firm's obligations of responsible lending and good faith to continue with the application; or
- a customer asks for a variation to the loan amount.
- To rely on term 2 below by varying or withdrawing the offer only if the firm later finds that information provided by the customer to enable the firm to make its lending decision is incorrect or misleading.
- Not to rely on term 3 below.
- Not to rely on the potentially unfair part of term 4 below, which states the firm may alter its terms and conditions for 'any other valid reason'.
Old term
(1) Condition 1.6 of the Woolwich Mortgages from Barclays, Openplan Flexible Mortgage Facility Conditions (December 2003 edition)
'If your requirements or circumstances change for any other reason we may re-issue, revise, amend or vary your Mortgage Offer at any time before completion….'
(2) Condition 2 of the 'Supplementary Mortgage Conditions'
'This Offer may be withdrawn or varied on any grounds that the Company thinks fit, notwithstanding previous acceptance by you'.
(3) Condition 4(3) of the 'Mortgage conditions – Daily interest, England & Wales (September 2001 edition)'
(4) Condition 10.1 of the Woolwich Mortgages from Barclays, Openplan Flexible Mortgage Facility Conditions (December 2003 edition)
The term states that the facility conditions and certain other terms and conditions can be altered for a variety of reasons. The unfair part is where the firm can alter for 'any other valid reason'.
New term
The revised term 2, which has been effective since July 2006, states:
‘We can vary, or withdraw, this Offer if it subsequently transpires that any of the information you have provided to enable us to make our lending decision is incorrect, or misleading.'
Condition 21(2) of the new terms, issued in March 2007, replaces Condition 10.1 of the old terms.
It lists valid reasons when the firm may alter its terms and conditions and no longer states the firm may alter its terms and conditions for 'any other valid reason'.
What next?
Read more agreements from firms – see Unfair contracts.
Read more about Mortgages.
Read more about our work on Unfair contract terms.