Mortgage complaints rise by 80%

Data published last week by the FSA shows an 80 per cent spike in complaints to mortgage businesses, rising from 52,722 in the second half of 2011 to 95,363 complaints in the first half of 2012.

The regulator classifies some 1,626 firms under its mortgage business category, comprising home finance administrators, home finance brokers – which is mortgage advisers and arrangers – and home finance providers.

Of the total number of complaints, 32,353 or 39 per cent were upheld.

Three years ago there were just 14,655 complaints to firms classified under the FSA’s mortgage business category in the first half of 2009, which had doubled to 29,895 by the second half of 2010.

Overall the regulator’s data shows that complaints to financial services firms increased by 59% – largely driven by payment protection insurance.

Complaints about general insurance and pure protection increased by 99 per cent to 2.5 million and within this product group PPI accounted for 2.2 million of those complaints – an increase of 129 per cent.

The number of banking complaints increased by 5 per cent to 828,040; within this product group, complaints about current accounts dropped by 13 per cent.

There is no breakdown in terms of whether the complaints about mortgage business have been made to banks, building societies or advisers.

Complaints to banks and building societies combined rose from 1.6 million in the second half of 2011 to 2.7 million in the first half of 2012.

General insurance intermediary complaints rose from 265,000 complaints in the second half of 2011 to 431,000 in the first half of 2012.

Equity release complaints doubled from 530 in the second half of 2011 to 1,053 in the first half of 2012, but arrears-related complaints fell fractionally from 40,000 in the second half of 2011 to 39,500 in the first half of 2012.

Association of Mortgage Intermediaries chief executive Robert Sinclair says there is not enough information contained within the FSA’s data to know definitively what lies behinds the sudden increase, but it is likely to be a combination of three factors.

He says: Firstly, ongoing problems with the time taken to process applications and complete deals – and basic administration errors increasing.

“Secondly, complaints that lenders will not lend in the same way they did in the past.

“And thirdly, that some claims managers are chancing their arm to test the water to see if there is any scope [for complaint]. But on that, feedback to date from our members is that brokers are winning when these are presented to the Financial Ombudsman Service.”