Disputes relating to interest rates have been a significant feature of its mortgage-related complaints, consumers have complained about standard rates set by lenders, 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 in response to exceptional market conditions.
It has also reported an increase in complaints about the suitability of fixed-interest mortgages, where consumers believe that 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, consumers often expect variable interest-rates to track the base rate – but this is often not a term of the mortgage contract.”
Payment Protection Insurance dominated the list of complaints to FOS, with some 30% of new cases during 2009-10 relating to PPI.
But during the year mortgage-related complaints were down from 7,607 to 7,469.
FOS upheld 48% of complaints relating to intermediaries selling banking and/or mortgage products
FOS has however seen a growing number of complaints about mortgage offers being withdrawn, or not renewed, where property purchases were not completed on time.
It also saw a number of complaints during the year about the way in which flexible mortgage accounts operate, in circumstances where money paid in to reduce the mortgage was no longer available for withdrawal – or where “contingent” facilities had been withdrawn or reduced.
It has also seen more disputes involving mortgage transfers completed 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 consumer never consented to the transfer.
Other areas of complaint included mortgage arrears, and one complaint relating to sale-and-rent-back.
In total FOS resolved a record 166,321 disputes – a 46% annual increase –resulting in compensation for consumers in 50% of cases. It handled 925,095 consumer enquiries – over 3,500 each working day.