ICTIMS of a mortgage scandal that has blighted the lives of thousands of pensioners have drawn up plans to fight for justice. People travelled from all over the country for a council of war.
More than 100 members of Samvic – Shared Appreciation Mortgage Victims – gathered at a Derbyshire hotel to hear legal opinion on their fight for compensation. Among them was D-Day veteran Frank Cooksey.
More than 15,000 elderly couples bought Sam deals from Barclays or Bank of Scotland during 1997 and 1998 – a move they have come to regret.
Sams offered older homeowners loans against their houses in exchange for the lender sharing any increase in the property’s value. But the deals had no get-out clause, condemning those who had signed up to live in the same property for the rest of their lives.
Case after case has emerged where elderly people such as Frank have become trapped in unsuitable properties because the sums they owe are too great for them to sell up, clear the loan and find a more suitable house elsewhere.
Frank, an 83-year-old widower, can no longer cope with his home at Barmby Moor, near Pocklington, North Yorkshire. But he cannot afford to sell.
He took out a £15,000 Sam deal with Bank of Scotland in 1997, never dreaming of the problems that lay ahead. His wife died last year and he realised that the house was too much for him. But meanwhile, the value of the house had rocketed from £63,000 to £130,000.
When he told Bank of Scotland he wanted to sell, it said it wanted its £15,000 back, plus a big slice of the appreciation – a total of £65,000. Frank would not be left with enough to buy a suitable alternative house.
He found a welcome glimmer of hope at last Sunday’s meeting. ‘I think we have a long way to go,’ he said, ‘but there is a great sense of organisation and commitment.’
The meeting was chaired by Gareth Jones, a partner at the office in Bath, Somerset, of Withy King, a law firm with experience in class actions. He outlined the prospects of legal proceedings against the banks.
‘I have sought counsel’s opinion and Samvic members could proceed on a number of grounds,’ he said.
‘The next stage would be to get specialist advice on a specific area, for instance the wording on sales literature. What is unusual is that the clients are all similar in profile. There are many professionals such as solicitors and financial advisers and they have a lot of time to support Samvic.’
Samvic is prepared to negotiate with the banks to settle out of court. The group’s founder, Carolyn Mentzel from Bourne, Lincolnshire, said: ‘Once we have arrived at an agreement of what we want to achieve, we will approach the banks. But we won’t hesitate to go through the courts if necessary.’
Samvic is one of a growing number of groups of disgruntled financial consumers who are fighting collective battles against major institutions*. Other highly organised campaigns include those waged by customers against Equitable Life, against the providers of split-capital investment trusts* and – in the case of Rail- track shareholders – against the Government.
The Railtrack Private Shareholders’ Action Group launched a claim in the High Court last week against the Government’s decision in March 2002 to renationalise the rail network
• Samvic has about 1,000 signed-up members so far. For information about Samvic, send an SAE to PO Box 72, Bourne, Lincolnshire PE10 0UH.