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Deeds release fees are in consumer groups’ sights

I always try to keep an eye on mortgage reporting in the consumer press to stay abreast of the hot issues. And there is one that is consistent and shows no sign of cooling. Last week I came across the latest salvo in The Guardian.

So just what is this hot issue? Exit or deeds release fees.

I can almost hear your interest draining away as you read. What’s all the fuss about? After all, it’s only a nominal charge levied at the end of a mortgage’s life.

The fees are clearly shown in the lender’s tariffs and charges. Therefore the borrower should be in no doubt that there will be a charge.

Unfortunately, as with so many things, the reality is not so simple. Consumers and consumer groups are beginning to take an interest and voice their opinions.

When interviewed, one mortgage borrower who faced a 225 fee to get her deeds back said she was outraged at the fee charged. What is illuminating is that the customer knew the charge had risen by 46 since the previous year. She used a straightforward analogy to illustrate the point. “It’s as if a travel agency imposed a 50 levy for allowing passengers off the plane on their return to Gatwick”.

This is an interesting view but more importantly, it is a customer’s view.

There is a serious point here. There will be other customers who have issues with these fees. Some will voice their objections, others won’t. It’s a fact these fees have risen fairly sharply over that past 12 months. What will future rises be?

There are more than enough documents for customers to read when taking out their mortgages and you can bet they won’t be sitting down and ploughing through the post- completion fees tariff.

The biggest problem is there is no discrimination with these fees. Repay early and you are charged, pay for 25 years and you’re still charged. There’s customer loyalty for you. No wonder some customers are cynical about financial services.

It boils down to the old chestnut “It’s the principle.”

I suggest borrowers understand that lenders have costs to close a mortgage but this is an issue of proportionality and fairness. Can 50% rises in these fees be justified? Maybe lenders have been slow to review their charges – but on second thoughts there seems to be an awful lot of lenders going through a review process.

To many in the industry this issue may seem trivial in the context of some of the serious problems the lending industry faces and I must admit I agree with that sentiment to a certain degree.

But any industry that overlooks customer feedback of this type is dangerously close to being seen as taking a high handed approach to consumers.

Why pay for expensive focus groups when you can get this type of feedback for free?

Simon biddle

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