FOS says consumers will be compensated if proven misadvised

The Financial Ombudsman Service says lenders and brokers should redress where it is proven that consumers have been misadvised.

Tony Boorman, decisions director and principal ombudsman at the FOS addressed the issue of mortgage complaints at a Council of Mortgage Lenders seminar on complaints handling last week.

He says: “We can and do make significant awards, where there is a clear link between poor advice given and losses incurred by the consumer.”

Boorman says FOS has experienced a 50% increase in mortgage complaints on last year with many falling into the service’s new broker jurisdiction.

While he insists that the FOS will consider borrower complaints in a balanced manner he has said that those cases where misselling is apparent will result in consumers being compensated to pre-mortgage levels.

Boorman says: “Of course, the issues raised in complaints are by no means always cut and dried. We recognise that some customers will, however unwisely, seek to maximise their borrowing potential.

“Any redress we direct a business to pay will reflect the contribution of both parties to the problem. But in some cases the impact of poor advice can be clear and significant.”

Boorman did however also address the fall in mortgage endowments over the past 12 months with less than 10% of complaints in the mortgage area referring to endowment concerns.