FOS sees drop in mortgage complaints
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The Financial Ombudsman Service saw a fall in mortgage-related complaints last year.
It has published its annual review covering the financial year today, which reveals that in 2010/11 it received 7,067 mortgage complaints, down from 7,469 in 2009/2010 and 7,602 in 2008/2009.
When complaints about mortgages are broken down, 68% related to banks, 16% to mortgage intermediaries, 8% to building societies and 8% to others.
Administrative errors remained the largest area of complaint, with FOS also seeing an increase in complaints from consumers whose applications to port their mortgage had been declined.
In some cases lenders had tightened their criteria and the borrower had not met them.
In this instance FOS says it looked at whether borrowers were being treated fairly and in some cases it decided a fairer outcome was for the lender to waive the early repayment charge rather than allowing them to port their deal.
FOS also saw complaints where a lender has reduced the upper age limit applying to the term of the mortgage or required the borrower to provide proof of retirement income.
It also continued to receive a significant number of complaints about the arrears charges applied by some lenders.
Overall FOS handled over a million enquiries and complaints from consumers – around 4,000 each working day through the year.
Some 51% of the new cases were about the sale of payment protection insurance with the number more than doubling to 104,597 – the highest number ever received in a year about a single financial product.
Natalie Ceeney, chief executive of FOS and chief ombudsman, says: “This year has been the busiest in our 10-year history – with over 200,000 disputes referred to us and a million front-line enquiries. This reflects the increased confidence of an ever more diverse range of consumers getting in touch about a wider range of problems and issues.
“Aside from PPI cases, over the year we’ve seen encouraging signs of improvements in the way that some businesses are handling complaints – and it’s good to see that the number of disputes about some other financial products has started to fall.”
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Readers' comments (7)
Michael AC White | 18 May 2011 12:46 pm
Is it me, or given the increased management focus in the mortgage market; intrusive regulatory approach and consequently over enthusiastic compliance officers.... one would expect the fall in the level of mortgage complaints to have been much more dramatic?
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Anonymous | 18 May 2011 3:17 pm
i think you are probably forgetting the fact that many people now complain for the sake of it, whether they have a valid grievance or not!
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Steven Balmer | 19 May 2011 10:05 am
I would have thought the fall in the number of successful mortgages would account for a fall in complaints. Does no mean the public are better served, just nothing to complain about if they can't get a product in the first place.
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Grey Haired Underwriter | 19 May 2011 12:17 pm
Half the problem with these situations is that the 'parlance' for some of these issues is incorrect.
To take an example from the complaints data it should be noted that the customer cannot port a mortgage. A mortgage is taken against an individual property so how can it ever be portable? The simple fact is that it is the product that is being ported to a new mortgage but everyone refers to this as portable mortgages - and so the customer is confused because they think they have the right to move house and just transfer their mortgage rather than havng to take up a new loan.
Another glaring example of the is the use of the word repossession. A lender never repossesses a house because it never owned it. In reality the lender takes possession of the property and whilst this may seem to be a pedantic statement when considering that repo is now the standard phraseolgy the fact is that we are talking about the sort of semantics that some ambulance chasers love to base their cases on. So let's get it right.
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Anonymous | 19 May 2011 2:42 pm
anon 3.17pm......you re not kidding, i ve just had a letter of notification from FOS regarding a complaint from a remortgage that completed in 2006. The previous mortgage was a base rate tracker + 1%. Apparently I should have known that in 2009 it would be 0.5% so according to them I mis sold the mortgage!!!!!!......
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Luke Atkinson | 20 May 2011 10:03 am
anon 2:42 - surely there has to be more to this complaint??
Anyone with any knowledge of giving advice knows you aren't meant to suggest future interest rate trends and base advice around these suggestions??
Unless you were incompetent enough to suggest this and note it in your suitability letter? If that is the case the FOS have done their job.
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Anonymous | 23 May 2011 9:35 am
Luke.....
i can assure you 100% there is NOT anything more to the complaint.
The allegation was the mortgage was mis sold because they were on a BoE tracker of 1% in 2006.....no more no less.
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