View more on these topics

Total mortgage complaints to FOS fall as SVR-related grievances rise

Complaints to the Financial Om-budsman Service about mortgages dropped 2% in the 12 months to March 2010, down from 7,607 in the previous year to 7,469.

FOS’ annual report last week revealed that it upheld 48% of com-plaints relating to brokers selling banking and mortgage products. Disputes relating to lenders’ SVRs were a significant feature of its mortgage-related complaints.

Other complaints related to rates not tracking changes in the base rate, the speed of changes made to variable rates, and the removal of interest rate collars by some lenders.

FOS has also reported a rise in complaints about the suitability of fixed interest mortgages, with consumers believing a mortgage linked to a discounted or tracker rate should have been chosen instead.

In its report, FOS says: “We will consider carefully the legal fairness of interest rate variation terms in mortgage contracts, where this forms part of a complaint brought to us by a consumer.

“In the complaints we see, con-sumers often expect variable interest rates to track the base rate but this is often not a term of the mortgage contract.”

A Council of Mortgage Lenders spokeswoman says that although FOS has seen an increase in SVR-related complaints its report does not specify how many of them were upheld.

She says: “What the data does not tell us is how many complaints were upheld. FOS also acknowledges that a lender’s SVR is a contractual issue, which consumers might not like, but it does not mean their com-plaints are valid.”

FOS has also seen more disputes involving lenders porting a cus-tomer’s mortgage without a signed acceptance, usually following a phone conversation between the consumer and the lender.

In some of these cases, by not having clear documentation as evidence of their contact with the customer in relation to the disputed events, lenders seem to have left themselves open to claims that the consumers never consented to the transfer.

Recommended

4

AMI calls on FSA and CML to acknowledge brokers

The Association of Mortgage Intermediaries has welcomed figures from the Intermediary Mortgage Lenders Association, which show brokers continue to dominate the mortgage market, but it wants the trade bodies and the regulator to acknowledge this important role.

Lenders’ refusal to deal with brokers makes TCF difficult

I have got on with being the best adviser I can be to my loyal clients and the referrals they provide during the credit crunch. I’m still in business, providing a good service. But it never ceases to amaze me how one-sided this industry is when it comes to initiatives such as Treating Customers Fairly, […]

Frexit & contagion risk in Europe

Many commentators have suggested that the UK’s exit from the European Union will trigger a domino effect, leading to its eventual break-up. Neptune’s Rob Burnett discusses the likelihood of this happening. Read more: Important information Investment risks Neptune funds may have a high historic volatility rating and past performance is not a guide for future […]

Newsletter

News and expert analysis straight to your inbox

Sign up