Following the Financial Ombudsman Service ruling over two-tier standard variable rate mortgages, Alliance & Leicester are to lodge an appeal.
Following Financial Ombudsman Service rulings against Halifax, Nationwide and HSBC for dual standard variable rates, the ruling was also applied to Abbey National borrowers who had a cash back mortgage. This is where the company would give you a lump sum of cash upon completion of a mortgage. The Financial Ombudsman Service ruled that these customers payments should be related to Abbey's new rates, rather than the standard variable rate which was more expensive.
Abbey National deny operating two-tier rates saying that "the bank has one standard variable rate and several tracker based products".
The Financial Ombudsman Service is shortly to rule on a similar issue for Cheltenham & Gloucester. They believe the FOS will rule in their favour as they also don't believe they run a two-tier system. This is because the second variable rate was never available to new customers.