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Reclaim unfair mortgage arrears fees, FSA says

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Reclaim unfair mortgage arrears fees, FSA says

 

 

Now also see this important article on unfair mortgage charges - here

 

 

 

 

******************************************************************************************************************

Guy Anker

 

26 January 2010

Homeowners hit with excessive mortgage arrears charges should demand their cash back, says the city regulator, the Financial Services Authority (FSA).

It today launched a crackdown on unfair fees that hammer those already behind on payments (see the Mortgage Arrears and Redundancy guides).

It has also told MoneySavingExpert.com that consumers should not stand for shoddy treatment and should reclaim their cash, regardless of when the fees, which can sometimes run into thousands of pounds, were levied.

Almost 200,000 borrowers were significantly behind on payments at the last count, according to the Council of Mortgage Lenders, who could all be hit by high fees.

Below is a quick Q&A reclaiming guide. We will soon issue a full step-by-step guide so get the free weekly email for updates.

What's happened today?

The FSA announced proposals (which won't be implemented until June) designed to better protect borrowers in arrears from excessive and unfair charges.

When MoneySavingExpert.com asked the regulator whether those unfairly treated should reclaim excessive fees, a spokeswoman said: "We want consumers to take a handle on the situation so if they think they have not been dealt with fairly they should definitely complain."

The Financial Ombudsman Service, which independently arbitrates on complaints between consumers and lenders, also echoed that sentiment when asked.

The FSA's proposals demand that firms stop hammering those in hardship; for example, by issuing charges when a payment plan has already been agreed or by allocating payments payments to clear an arrears charge rather than clearing the balance.

They also state repossession should always be the last resort and that lenders must record all arrears handling calls and keep records for three years.

What is an unfair fee?

It is about the size of the fee and how it's charged:

  • Excessive fees. One of the clearest examples, the FSA says, is where the charge is higher than the administrative cost to the lender. If it costs £10 to send a letter but the charge is £35, that's £25 too much.
     
    Lenders often charge around £35 per missed payment, £100 for a debt collector visit and thousands in legal and estate agent fees if your property is repossessed (see the Huge mortgage fees MSE News story).
  • Unfair charging. The FSA has found numerous examples of firms sneakily finding ways to incorporate charges when they shouldn't. For example, when struggling borrowers are already on a repayment plan.
     
    Also, lenders charging non-direct debit payment fees (to pay for payment processing) when no payment was made, or including arrears charges in the total mortgage balance when calculating an early repayment charge (ERC), which is usually a percentage of that balance.

Financial services secretary to the Treasury Paul Myners described some lenders' high arrears fees as "extraordinary" during a July Treasury Committee hearing.

How far back can you go?

The Ombudsman says you can reclaim fees from as far back as you like, as long as you make the complaint within three years of realising you could.

As the FSA has only got tough over the past few months, most people will still be within that three-year time-frame.

If unsure of past charges, you can make a request to get a list of fees charged from your lender over the past six years under the Data Protection Act. This will cost up to £10.

How do you reclaim?

First complain to your lender setting out why the charges are unfair and ask for your money back. If you are turned away or do not get a satisfactory response within eight weeks, then complain to the free Ombudsman service (see the Ombudsman guide).

To highlight this is possible, the FSA ordered GMAC-RFC, which was the tenth largest mortgage provider before the credit crunch, to pay compensation to up to 114,000 borrowers hit with unfair arrears fees last October (see the GMAC mass refunds MSE News story). It also issued a whopping £2.8 million fine.

The FSA is also taking action against a number of other firms, but has not concluded investigations yet.

Martin Lewis, MoneySavingExpert.com creator, says: "While the FSA has not named a price deemed excessive its statement echoes the bank charges campaign.

"If you pushed me on a figure, the Office of Fair Trading says it won't challenge credit card penalty charges under £12, so that is a good benchmark.

"As there's no cost, and most people in arrears are in financial hardship, and therefore should be treated with sympathy, I would urge anyone who feels unfairly treated to complain."

If successful, please report your experience in the discussion link below.

Further reading/Key links

Get help: Mortgage Arrears, Redundancy help

Mortgage cost-cutting guides: The Remortgage guide, Mortgage haggling, Cheap mortgage finding, Ditch my fix?

Comment/Discuss

 

Discuss this MSE news story: Reclaim mortgage fees

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How does this work? If you look at the BBC website and using your example. The fee itself is not unfair (unless as stated it is way over the cost of the action). GMAC have not been told to refund all the fees. They have been told they can not charge the monthly fee when the borrower has made an arrangement to pay off the arrears. They are to refund any interest charged on the fees and any interest charged on the fees as part of an early repayment charge.

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More hot air from the FSA and a fudge at best, it seems the regulators that are supposed to protect us act more like a referee between consumer and creditor

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So are they allowed to charge interest on the outstanding arrears , if in a repayment plan with lenders in place to reduce arrears, monthly interest charged / double the monthly contracual payment

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More hot air from the FSA and a fudge at best, it seems the regulators that are supposed to protect us act more like a referee between consumer and creditor

 

It is far more serious than just fudge.

 

Read this. http://www.consumeractiongroup.co.uk/forum/content.php?700-Hot-news-for-anyone-who-has-suffered-mortgage-arrears-charges-irresponsible-lending-or-other-unfair-lender-conduct

 

If you have suffered mortage arrears fees then you should claim them back now.

 

We will help you. Don't hang around. The FSA decisions in DB Bank and in Redstone now make it impossible for mortgage lenders to resist a claim for the return of arrears fees PLUS interest based upon restitutionary damages.


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Hi there

 

I am going to begin proveedings tomorrow against TMB for over £10k of charges within the past 3 years.

Wish me luck

 

Will post any progress

 

thanks

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I too am reclaiming £6k in unfair arrears charges - from standard life - a division of barclays - here is my particulars of claim - any advice, is his correct?

xenia

 

 

 

 

 

 

 

 

BRIEF DETAILS OF CLAIM.

The Defendant’s mortgage lender, Standard life, (A division of Barclays PLC) has acted in an unfair way charging extraordinary fees and interest, without accurately informing the claimant .

They sent a counsellor to the address of the property, without informing the claimant that he had a right to refuse.

When the claimant tried to resolve the problems which his spell of financial hardship had brought about, the defendant mislead the claimant by sending out various letters with conflicting information and conflicting financial amounts. In there correspondence they have acted in an unclear, and unfair way.

When Mr Peel employed a representative to try to help him to understand the conflicting communications, the staff at Standard Life agreed that the file is “hugely complicated” (date) and “difficult to understand.” (date)

Paying these excessive charges has put the claimant into further arrears elsewhere, and has caused further penalties in terms of extra interest and his credit file being affected.

 

 

PARTICULARS OF CLAIM:

Particulars of Claim

 

Unlawful Charges

The claimant had a mortgage agreement with the defendant dated 11.04.2005 granting a secured loan of £33,300.00

The said loan is subject to the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR)

The defendant is statutorily bound by Financial Services Authority regulations – Mortgage: Conduct of Business rules (MCOB) contained in the FSA Handbook, implemented under the Financial Services and Markets Act 2000

The mortgage fell into arrears after the claimant was unable to keep up the repayments as required by the mortgage agreement.

The defendant levied mortgage arrears charges against the claimant.

The defendants also levied further interest upon the said unlawful charges

The mortgage arrears charges were levied at a rate which exceeded their administrative costs.

The level of the charges were unfair because they breach the requirement of fairness contained in UTCCR

The level of the charges are also unfair because they are the result of unfair treatment by the defendant and therefore levied in breach of the defendant's statutory duty to treat their customers fairly contained in MCOB

For these reasons the interest charged on the unlawful charges is also unlawful

 

Other Unfair Treatment

 

The defendant has also levied charges in respect of counsellor visits.

Claimant was not told about said counsellor visits, and therefore was unable to refuse them. The fees for the said counsellor visits were levied at a rate which exceeded the actual costs of the visits

By virtue of the above, the defendant has treated the claimant unfairly and in breach of their obligations under MCOB

 

The claimant seeks the return of unlawfully levied charges: £3,612.83

 

The return of unlawfully levied counsellor visit fees – £93.00

 

Plus associated interest: (figure) 1800 8% 2 years)

(comprising 8% of median amount)

 

Administrative costs 104 hours @ £32.00 per hour =

 

Legal costs: 3 hours @ £180.00 –

Aldo the defendant requests any negative entries associated with this claim on his credit file, to be removed.

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court case submitted, at cost of £210.

they have until the 3oth June to respond.

Alot of paperwork getting the particulars of claim right for the specific case, but glad its of and i the hands of th litigation department. If they choose to fight it, i will proceed with maximum publicity. watchdog - or is that just pointlessly screened?

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Have you got any updates on your case?

 

I am going through my GMAC fee's and charges now but when reading the forum's i am getting a lot of mixed messages as to whether you can/can't reclaim them back....

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i filled out the small claims courts papers, and they have decided to defend 100% and also make a counterclaim.

 

fingers crossed!

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Hi there, I redeemed a mortgage with Woolwich in 2008. I'd had the mortgage for just short of 12years. Following a relationship break-up I continually struggled to make ends meet and at times had substantial arrears on my mortgage. Family helped me out at various points.

 

Anyway, having read some Threads on here I thought I'd make an attempt at trying to get back some of the mortgage arrears fees / charges that had been added to my account.

 

Having submitted a claim to Barclays (who took over Woolwich) I've been advised that they've investigated my claim but since the £40 monthly arrears fee was advised on the Mortgage Terms and Conditions provided at the outset of taking out the mortgage and on the reverse of every piece of correspondence issued, they will not be looking at my claim any further........

 

Is this correct - should I just take this as thats it or do I have the right to take it further ?

 

thanks for your time everyone

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They tried that one with me - and yes they do have the fact that i signed a contract intially, but there is always the Unfair terms and conditions act - see intial advice on here....

 

i ignored it anyhow, we'll see if that was the rght thing to do! will keep posting....

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Swift 1st Limited fined over mortgage arrears failings and will pay an estimated £2.35 million in customer redress

 

FSA/PN/079/2011

08 September 2011

 

The Financial Services Authority (FSA) has today fined Essex based mortgage lender Swift 1st Limited (Swift) £630,000 for unfair treatment of some customers facing mortgage arrears.

The firm has also agreed to carry out a programme to provide redress to customers who were in arrears, and who were charged certain arrears fees and charges that were excessive. Swift will also provide redress to customers who redeemed their mortgages early where it miscalculated the interest on the redemption balance. It is estimated that the total cost of the redress to customers will be approximately £2.35 million.

The FSA has identified a number of serious failings by Swift which occurred between June 2007 and July 2009 in relation to its arrears fees and charges, and in its dealings with customers in arrears.

These include:

 

  • Swift applied certain charges to its customers’ accounts that were in arrears which were excessive in that they did not reflect a reasonable estimate of the cost of administering an account in arrears.

These were:

 

  • Arrears management fee: a monthly management fee applied to a customer in arrears;
  • Default notice fee: a default fee applied when a customer’s account fell into arrears;
  • Unpaid mortgage payment fee: applied when a cheque, direct debit or standing order was not honoured by a customer’s bank; and
  • Litigation fees: fees applied to customers’ accounts when Swift started legal proceedings.

In addition:

 

  • Swift applied excessive early repayment charges to the redemption figures of customers who were, or had been, in arrears;
  • Swift failed to send all its customers in arrears certain prescribed documents, providing information on the options available to them;
  • Swift focussed on the collection of arrears without always proactively engaging with customers to establish an appropriate “Arrangement To Pay” based on their individual circumstances; and
  • Swift also failed to have adequate systems and controls in place to deal with early redemptions which resulted in some customers who redeemed their mortgages overpaying.

The FSA considers that Swift’s failings are serious as under FSA rules, a firm must consider the interests of its customers and ensure that they are treated fairly. Swift’s failings continued over a significant period of time and impacted about 2,500 customers. As Swift specialised in the sub-prime sector, a number of customers who already had an adverse credit status were put at further risk of financial detriment.

Tracey McDermott, acting director of enforcement and financial crime, said:

“Firms must ensure they treat their customers fairly. Many of Swift’s customers were already in a vulnerable position, having fallen into arrears on their mortgage payments, and they could ill afford excessive and unfair fees. The FSA will take robust action to ensure not only that firms are fined for such failings but also that they identify and compensate customers who have been disadvantaged. The costs of doing so are often much more than the fine.”

Swift reported its failings in relation to early repayment charges and redemption balances to the FSA.

Swift also agreed to settle at an early stage and therefore qualified for a 30% reduction in penalty. Were it not for this discount the FSA would have imposed a financial penalty of £900,000.

Notes to Editors

 

 

  1. Read the Final Notice for Swift 1st Limited.
  2. Swift is the fifth lender referred to enforcement following the FSA’s thematic project on mortgage arrears handling. Final notices were also given for GMAC-RFC, Kensington Mortgages, Redstone Mortgages Limited and DB Mortgages.
  3. In June 2009, the FSA published the results of a review which found continued weaknesses in the way specialist lending firms were handling mortgage arrears and repossessions.
  4. In July 2010, the FSA published proposals to establish stronger standards for responsible lending in the mortgage market and to provide extra protection for vulnerable consumers. Consultation on these proposals closed in November 2010.
  5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.

swift_1st.pdf

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i have a current claim in but need to amend to reflect the interest - i am confused about simple or contractual and the lenght of time i can claim from as my charges go back 12 years but is a mortgage so i think 12 is correct for a mortgage challenge isnt it? i have worked out their interest on the charges at the rate they charge, so how do i do the simple interest, - i am thinking on the actual charges WITHOUT their contractual interest added.

 

i assume that i can only get my repayments changed to reflect this as i have not actually paid ALL the charges yet but will have over the full term of the product I think??? however, these charges are calculated seperately so i think they must be IN ADDITION to the full term of the product which has 13 years yet to run (into my retirement).

 

urgent please:):)


'rise like lions after slumber, in unvanquishable number, shake your chains to the earth like dew, which in sleep had fall'n on you, ye are many, they are few.' Percy Byshse Shelly 1819

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do UTCCR 1999 'unite' utccr previous regs, some hideous sub prime mortgages pre 1999, what help can they get with UNFAIR TERMS, AND MISSELLING??? or is it covered as the next act replaced the former, if so, what sections would apply?


'rise like lions after slumber, in unvanquishable number, shake your chains to the earth like dew, which in sleep had fall'n on you, ye are many, they are few.' Percy Byshse Shelly 1819

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Hi bankfodderfinished paying my mortgage want to claim for admin charges and visitsetc , is there a special template for the mortgage charges etc . Thanks

It is far more serious than just fudge.

 

Read this. http://www.consumeractiongroup.co.uk/forum/content.php?700-Hot-news-for-anyone-who-has-suffered-mortgage-arrears-charges-irresponsible-lending-or-other-unfair-lender-conduct

 

If you have suffered mortage arrears fees then you should claim them back now.

 

We will help you. Don't hang around. The FSA decisions in DB Bank and in Redstone now make it impossible for mortgage lenders to resist a claim for the return of arrears fees PLUS interest based upon restitutionary damages.

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They tried that one with me - and yes they do have the fact that i signed a contract intially, but there is always the Unfair terms and conditions act - see intial advice on here....

 

i ignored it anyhow, we'll see if that was the rght thing to do! will keep posting....

 

I was just wondering how you got on with your claim?

 

We nearly had our house repossessed last year and tried to get the possession order lifted having made full monthly payments for over a year + clearing the majority of the arrears. What was left was capitalised and added to the end of the mortgage. Long story short the judge was unable to lift the possession order and now our lender wants to charge over £800 in legal fees for us taking the case back to court. I want to claim back this charge and all the others from when our account was in arrears but cannot risk it going back to court again - even if a different reason - and potentially being hit with more charges!!

 

Can you give any advice?

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you will need to find out what regulations cover your agreement, FSA or CCA for example, if at all, some older agreements pre 2000 do not seem to be covered by any regs when it comes to unfair charges or an unfair relationship. but do check this out and hopefully some one knowledgeable will come on here to help out, very good luck:)


'rise like lions after slumber, in unvanquishable number, shake your chains to the earth like dew, which in sleep had fall'n on you, ye are many, they are few.' Percy Byshse Shelly 1819

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Hi all is there a new draft template for a claim against mortage companies to include:

 

 

  • Arrears management fee: a monthly management fee applied to a customer in arrears;
  • Default notice fee: a default fee applied when a customer’s account fell into arrears;
  • Unpaid mortgage payment fee: applied when a cheque, direct debitlink3.gif or standing order was not honoured by a customer’s bank; and
  • Litigation fees: fees applied to customers’ accounts.


We live in an unmoderated country why should the net be any different?

Bring back free speech we miss it!

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Hope this is in the right place ...

 

I have been behind with my mortgage for about 18 months since loosing my job due to ill health. Lender is Bank of Scotland. I put a repayment arrangement in place for £60 extra per month but they still charged me £35 every month for being in arrears (adminstration fee) I asked on the phone for this to be waived without success. Have just agreed to add arrears on to my mortgage to get me back on the level again. But there were loads of £35 fees added - I just feel they kick you when you're down. Can these be reclaimed?

 

Thanks

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Been the FSA and FOS route. Told me to go the the other group which looks into pre regulation loans and cant remember the name at the moment. They also said Swift are bomb proof. Do they perhaps have links to the government and can do what the hell they like.

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Hello glenismorganlewis

If you can remember the groupyou were told about and post it I would be very grateful.

I have a problem with a pre-regulated company and would love some help to claim charges, but don't really know where to start.:???:

Look forward to hearing more.

Thanks, Fielder

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i filled out the small claims courts papers, and they have decided to defend 100% and also make a counterclaim.

 

fingers crossed!

 

Hope you don't mind us asking, but any news on your claim?

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style="text-align:center;"> Please note that this topic has not had any new posts for the last 2501 days.

If you are trying to post a different story then you should start your own new thread. Posting on this thread is likely to mean that you won't get the help and advice that you need.

If you are trying to post information which is relevant to the story in this thread then please flag it up to the site team and they will allow you to post.

Thank you
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