CML says UKAR’s customer checks are prudent move

The Council of Mortgage Lenders has defended UK Asset Resolution’s decision to contact borrowers if changes in their financial profile suggest they may be at risk of falling into arrears.

UKAR, the holding company for Bradford & Bingley and Northern Rock Asset Management, is contacting borrowers it believes could run into difficulties paying their mortgage and conducting credit checks on such consumers.

The CML says the national media responded to the story with a misplaced attitude of righteous indignation.

In its latest News & Views newsletter, the CML says: “As far as we can see, the picture of what lenders are doing is prudent and less dramatic than the coverage suggests.”

The trade body has contacted various large lenders, including UKAR, and established they operate customer contact practices in line with data protection obligations.

The CML says it is in borrowers’ interests to be made aware of steps they could take to avoid mortgage payment problems once interest rates rise.

It also warns that the media response to UKAR’s initiative could prevent other lenders from adopting similar schemes.