Question of cash: Bank pays up for error that led to a loan refusal

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The Independent Online
<preform> <!-- MONEYNET --><!-- LOANS --><table align=left border=0 cellpadding=5 bgcolor="#ffffff"><tr><td><table align=left border=0 cellpadding=1 cellspacing=1 bgcolor="#919AA6"><tbody><tr> <td bgcolor="#FFFFFF"><table width="100%" border="0" cellspacing="0" cellpadding="2" bgcolor="#FFFFFF"><tr> <td align="center"><span class="smaller"><a href=""><font color=#00cc33>Money</b></font><font color=#6b009c>net</b></font><br>loans<br>search</font></b></a></span></td></tr></table></td></tbody></table></td></tr></table><!-- END MONEYNET --> Q</b> Last month we applied to Northern Rock for a personal loan of &#163;6,000 after Your Money listed its good borrowing rate. We are both employed, with a net income of &#163;28,000 a year and investments of &#163;30,000. The outstanding balance on our mortgage is &#163;6,300 on a house worth &#163;175,000, with just one small personal loan for a car outstanding. We were refused without any reason given. We complained and Northern Rock said it can approve or refuse loan applications as it likes and we did not meet their lending criteria. The letter ignored our concern that our credit rating may be wrong. Was the loan too small, or does Northern Rock approve loans only when borrowers take out their expensive insurance? We have since arranged the loan with our mortgage lender, Bristol &amp; West. S&amp;RG, Somerset</p>A</b> This is cock-up, not conspiracy. Apparently your address was not recognised by Northern Rock's computer system. This generated a loan refusal, where it should have led an employee to find out why the address was not recognised. A company spokesman said it was frustrating because you are exactly the type of customers Northern Rock wants. He said the bank does not reject applicants who refuse payment insurance. As a gesture of goodwill, the bank is sending you &#163;50. It also promises a review of its procedures to learn lessons.</p>Q</b> You reported ('Nationwide plays fair', 23 February) that the Nationwide is to refund &#163;90m to borrowers who were offered a less good mortgage rate than new customers. I am one of those who lost. Do I have to contact them to claim compensation? JD, Londonderry.</p>A</b> The Nationwide says it is initiating action and will be contacting all affected borrowers. You don't need to do anything.</p>Q</b> I visited Italy and tried to buy a newspaper using euro coins from the Irish Republic. The vendor refused to accept them. Presumably he was wrong?JD, Bristol.</p>A</b> Absolutely. "The whole point of the euro is that currency issued in one part of the euro-zone can be used elsewhere in it," says a European Commission spokeswoman, and that applies equally to notes and coins, which bear the issuing country's identification. If you want to lodge a formal complaint against the retailer you can do so through the London office of the European consumer council, on 020 7833 2181. </p></preform>

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