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80% spike in mortgage complaints in H1 2012

Data published today by the FSA shows a 80 per cent spike in complaints for mortgage business, rising from 52,722 in the second half of 2011 to 95,363 complaints in the first half of 2012.

Out of these 32,353, 39 per cent of the overall number of mortgage complaints were upheld. Some 78,376, 95 per cent of the overall number of mortgage business complaints, were also dealt with in eight weeks.

Three years ago there were just 14,655 complaints for mortgage business in the first half of 2009, which had doubled to 29,895 by the second half of 2010.

Overall the regulator’s data shows that complaints to financial services firms increased by 59% – largely driven by payment protection insurance.

Complaints about general insurance and pure protection increased by 99% to 2.5 million and within this product group, PPI accounted for 2.2 million of those complaints, an increase of 129%.

The number of banking complaints increased by 5% to 828,040 – within this product group, complaints about current accounts dropped by 13%.

There is no breakdown in terms of whether the complaints about mortgage business have been made to banks, building society or advisers.

Complaints to banks and building societies combined rose from 1.6 million in the second half of 2011 to 2.7 million in the first half of 2012.

General insurance intermediary complaints rose from 265,000 complaints in the second half of 2011 to 431,000 in the first half of 2012.

Equity release complaints doubled from 530 in the second half of 2011 to 1,053 in the first half of 2012.

And arrears related complaints actually fell fractionally from 40,000 in the second half of 2011 to 39,500 in the first half of 2012.

Association of Mortgage Intermediaries chief executive Robert Sinclair says there is not enough information contained within the FSA’s data to know definitively what lies behinds the sudden increase, but it is likely to be a combination of three factors.

He says: Firstly, on-going problems with the time taken to process applications and complete deals – and basic administration errors increasing. Secondly, complaints as lenders will not lend in the same way they did in the past.

“And thirdly, that some claims managers chancing their arm to test the water to see if there is any scope. But on that, feedback to date from our members is that brokers are winning when these are presented to the Financial Ombudsman Service.”

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  • Chris Gardner 1st October 2012 at 2:47 pm

    Dear FOS,

    I would like to make a complaint about my mortgage. When i took it out the broker told me it was £1000 per month. Since then my payments have gone down by an outrageous amount and have plateued at £183 per month.

    With all of the extra cash i have been able to buy loads of stuff on HP, including a 60ft wide screen TV. What i want to know is what am i supposed to do when the payments go back to a grand a month in 2020?

    I want compo and the broker sent to jail.

    Kind regards

    Joe Punter.

  • Bobby 27th September 2012 at 2:40 pm

    Something has to be done about the ambulance chasers now before they get lucky and hit a potential raw nerve and jump on the band wagon sending multiple (unfounded I might add)complaints about ‘mis-sold’ mortgages. I think a petition to FOS saying the client should pay nominal fee (again refunded if upheld as per Davids idea)is on the cards. Lets nip it in the bud before it starts. MOJ aside who do CMC’s have to answer to if a complaint is registered against them? Are they required to stump up £500 each time a complaint is registered against them?

    Is there any way they can be counter claimed? Ie for the time spent dealing with the phantom claim when it is not proven?

    Stand together on this early and we can avoid the scatter gun approach they adopted when trying to pull the PPI move on the advisory industry.

  • Jon 27th September 2012 at 1:04 pm

    Well said Liz, David.
    The thing is 80% spike is nothing !! wait till next year ! Once claim firms slow down with PPI claims mortgages are next ? The £500 should be charged against the claim firm if case not upheld ?

  • Peter Turner 27th September 2012 at 12:24 pm

    I agree with Liz

    Next week we will see car clamping scams outlawed – but FOS will still be able to operate an equivalent by charging to tell advisers that they have no case to answer.

    Can somebody please tell me how this is “fair and reasonable”?

  • David 27th September 2012 at 11:50 am

    Yes Liz is right. If a customer has a genuine complaint they should be prepared to pay a nominal fee of say £95, which would be refunded if the complaint is upheld, that would instantly stop the majority of these spurious complaints.The problem is the FSA and the FOS would see a big fall in their workload and that would put the UK at risk of loosing is title as the compensation capital of the world, therby putting their jobs at risk!

  • Liz 27th September 2012 at 11:12 am

    We might be winning against the CMCs that are ‘chancing their arm’ and still go to FOS even after their complaint has been shown to be a pack of lies. However, we are paying £500 each time for these fraudulent claims…