I pity the poor sods who are given the David Brent-esque task of explaining why blatant greed and profiteering is in fact a way of treating customers fairly. They will share an attribute with Brent that underlines the comic genius of his creation – he believes what he is saying.We can only hope that lenders will come to their senses before they have to present their justifications to the regulator. Releasing their bizarre logic from the rarefied atmosphere in which it was concocted and exposing it to a wider audience could be quite shocking. Well, it will shock consumers anyway – we all know that Brent is unshockable. The main focus of the FSA’s interest on mortgage exit fees is a start. Lenders have been asked to review them, and about time too. Borrowers are being treated appallingly where fees are concerned and lenders have been getting away with it for years. And it’s not just the level of fees that is an outrageous abuse of lenders’ positions but I’ll come back to that. These same lenders considered it acceptable to set one fee when a mortgage was taken out and then change this on a whim during the course of the contract. This is eye-opening evidence of how little lenders care about their customers. Borrowers find that lenders are all over them like a rash at the sign-up stage but are then dumped on like an evicted Big Brother housemate when they want to leave. The FSA should stop tiptoeing around this subject and instruct lenders to guarantee that fees will not be changed from one end of the mortgage term to another. But the regulator should go further. We all know the level of mortgage fees has soared in recent years, not to reflect the increasing cost of administering home loans because technology has made this cheaper, but to boost a profit stream that is being squeezed in this era of low interest rates and fierce competition. The joke is on consumers who not only have to put up with fees that are out of all proportion to the cost of the service being provided, but also have to stomach lenders pretending they believe these fees match the cost of producing mortgages. Lenders have been challenged by the FSA to justify their calculations when it comes to increasing exit fees but they should be justifying all their fees. Meanwhile, enjoy the spectacle of these David Brents defending the indefensible.
A comedy script to rival The Office is what I expect next month when lenders attempt to justify their excessive mortgage exit fees to the Financial Services Authority.