SPML/LMC anyone claimed for mis selling and unfair charges?

[tifo]

can the Pinnock judgement be applied to a Commercial Bank evicting a homeowner (as opposed to a public authority evicting a tenant)? In either case, the article 8 still applies to the individual.

[AnimalMagic]

I am assuming that as:

(3)In this section “public authority” includes—

 

(a)a court or tribunal, and

that the Court has to take into account s8 when making judgement, but only if the defendant raises it.

 

In terms of proportionality, would it be proportional that missing a couple of £300/month payments (as an example) result in losing your home?

 

Possibly more importantly, if the balance of the account was in dispute due to arrears charges, this dispute would need to be resolved before possession could be given... Would any BS be willing to try and justify their arrears charges in a Court?

 

At least that's as best I can interpret it... I need more time to try and understand...

[Suetonius]

I think that is the most beneficial way to look at it.

 

Whilst article 8 does not apply to the lender as it is not a public authority, it does apply to the Court itself as a public authority.

[Crapstone]

The question I would like to ask is.Has anyone who has complained to the FOS about unfair arrears charges levied by capstone/acenden ever actually got a positive result and had these charges refunded.

As regards Stephens query,this seems to me to be the right question to ask why in the light of the gmac findings have this lot escaped any sort of censure whatsoever and are still ploughing on with impunity with fairy godmothers PWC majority shareholders?.The FOS seem to think by all accounts that their charges are reasonable according to several negative reported decisions despite the gmac findings whose charges were actually less!

Here posted and highlighted again and all apply to Acenden in bucket fulls.

 

2.3.

The firm breached Principle 6 during the Relevant Period in that it failed to pay due regard to the interests of its customers and treat them fairly. In particular, the following failings were identified in that GMAC:

(1)

failed to ensure that mortgage servicing staff had an adequate understanding of and implemented the requirement to treat customers fairly in handling its mortgage arrears and repossessions;

(2)

until late 2008, focussed on the collection of payment of arrears over a short period of time within fixed mandates, rather than always establishing a suitable arrangement based on the customer’s individual circumstances;

(3)

applied certain charges to a customer’s account that were unfair in that they did not accurately reflect the actual cost of administering an account in arrears;

(4)

had not arrived at a cost-based approach to the calculation of its arrears charges and therefore could not be sure that they were reasonable compared to the actual cost incurred;

(capstone that was actually stated to the Mail that they had no idea of how the figure was constructed!Northern Rock seemed to think a fair charge was £25 )

(5)

caused some letters to be sent to customers that were either factually inaccurate or did not contain sufficient information to give customers a clear and accurate statement of their mortgage account; and

(6)

sometimes issued proceedings for repossession before all alternatives to repossession had been considered and accordingly, did not always use litigation only as a last resort.

2.4.

The firm also breached MCOB 12.4.1R and 13.3.1R in relation to the facts described at paragraph 2.3 above.

2.5.

 

Yes I did, and with compensation. Mortgage from 2003. All refunded and although they tried to reinstate them shortly after, due to arrears, they were retracted. The Fos warned them they would take a dim view on any fees applied to the account. It took 2 years to get through it. The hardest part was sitting down and going through all the statements and letters and putting them across as part of the case. A calculator and a highlighting pen is a must!

 

That was after a suspended repossession order and the arrears were several K including all the charges. Ordered to pay back £50 on top of the mortgage payments by the court but they were charging £65 in fees as well as making it difficult to make payments. I argued that the court did not allow them to do that and the contractual terms had been changed via the court and their intention would not be that I was made to go into £15 per month in arrears despite sticking to the agreement.

 

The Fos looked at it and the major part was that Capstone would not provide a copy of their fees or justify them. The blatant lies they told and that were revealed in the SAR helped as well

Edited February 23, 2011 by Crapstone

[Crapstone]

The SAR took 40 days and I know we sent off two at least and not at the same time. Dialogue withe Capstone...at least 6 months or so to reach a final conclusion that they were talking s***e.

 

My OH tried and failed with the Fos....then I found out. I had no idea what was going on until a court date. No idea that he hadn't made any mortgage payments for months. Court sorted then the Fos. Not as easy as it seems as you have to spell it out to them and give them the key data to work on or it goes over their heads. It shouldn't but it does.

[peterjm]

Thanks for that information crapstone,it sounds like the right dogged approach may get results but you seem the exception here and possibly unique in obtaining refunds but it shows it can be done and that the FOS do not use previous decisions as in any way precedental but judge perhaps on a case by case basis then of course you have the adjudicator lottery to contend with.

[Suetonius]

the FOS do not use previous decisions as in any way precedental but judge perhaps on a case by case basis then of course you have the adjudicator lottery to contend with.

 

That is correct. A precedent is something that is set by a Court and not by a limited company with statutory powers.

 

http://www.financial-ombudsman.org.uk/faq/answers/research_a1.html

 

"But remember – we look at each complaint on its own merits. So if you read about a case that appears to be similar to yours, don't assume that we will always reach the same decision. Much depends on the details of each individual case."

 

The point of quoting extracts from the FSA and directly from the FOS is not an attempt to say that a precendent has been set, rather it is away of building your own case and the arguments for a refund of the charges.

 

If you receive a response which is contradictory to the quote previously posted from the FOS, ask the Adjudicator to explain exactly why their view is different from the principle ombudsman and decisions director for the FOS. Under the FSMA 2000 they only have to consider the law (including legal precedence) and not reach a decision based upon it. It is all about builing up your own case and arguments.

 

In other words, the stronger your own argument the more likely you will have some success.

[tifo]

Yes I did. The Fos warned them they would take a dim view on any fees applied to the account.

 

The Fos looked at it and the major part was that Capstone would not provide a copy of their fees or justify them. The blatant lies they told and that were revealed in the SAR helped as well

 

Could you help me with the above?

 

In my complaint, the adjudicator said that investigating mortgage arrears charges is not within their remit but that he considers them to be fair because they are set at a market rate and that it was my conduct of the account (for being in arrears) which resulted in the charges so the bank was entitled to make them.

 

The FSA said i'd need a breakdown from the bank in order to check whether they'd breached MCOB 12.4.1R. The adjudicator said he will not ask the bank for a breakdown since it's not something he's looking at. He also said these charges have not been judged to be unfair by a court so they are presumed to be fair until then. He also cited the test case from 2009 (even though these are not personal current account overdraft charges or a core service charge).

[Suetonius]

On another connected note, I have read that some people have been told that they can be charged a late fee by the FOS because it is in the terms and conditions.....

 

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/50/banking-contracts.htm

"When we look at banking disputes involving contracts, we take into account the firm’s duties under the Banking Codes. We consider relevant statutes, such as the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contract Regulations 1999. We also consider the Financial Services Authority’s Statement of Practice, Fairness of Terms in Consumer Contracts (published in May 2005). This gives firms an indication of how they can avoid using terms that could be regarded as unfair. It is particularly relevant when we look at terms to do with interest rate variation.

 

In addition, and very importantly, we are required to decide what is ‘fair and reasonable’ in a given case. This may mean deviating from the ordinary or strict legal position where that is necessary to ensure a fair outcome."

 

The decisions made by the FOS are not always based upon law etc but rather what it considers to be both fair and reasonable. Hence the previous posted quote from the FOS

[Suetonius]

In my complaint, the adjudicator said that investigating mortgage arrears charges is not within their remit

 

http://www.financial-ombudsman.org.uk/publications/pb09/pb09-4.html

 

mortgages

 

These cases are expected to increase in line with tighter lending policies and a higher level of repossessions. Some issues relating to sales and contract terms will emerge as customers reach the end of existing deals and find renewal terms unattractive. And there is the potential for a significant volume of disputes around mortgage late-payment charges and other similar charges.

 

http://www.financial-ombudsman.org.uk/news/speech/CML_TB.htmlcharges

 

This leads me to the subject of charges. Mortgage charges have already raised issues with wider implications. The mortgage exit-fee issue was raised by us with the FSA in response to consumer complaints.

 

Our initial investigations found that firms had increased these charges where, in fact, they had no clear legal right to do so. In some cases, indeed, we doubted that they either had the right to levy such a charge in the first place or to vary the charge once it was set. And in other cases they needed to be able to demonstrate that any increases reflected the actual changes in their costs.

 

Some lenders had surprising difficulty with the concept that they could only charge what their contract provided for. It was clear that many had paid scant regard to the legal requirements when setting charges.

 

I was pleased that having raised this issue, we saw an industry-wide solution that largely avoided the need for individual customer complaints to be brought to the ombudsman. I hope that lenders have considered carefully the implications of these events across their business.

 

Elsewhere, the present debates about bank charges and the previous action of the OFT on credit-card charges are also relevant. We have already seen some customers raise queries about the level of charges made by lenders when they are in debt. The Citizens Advice report suggests that some lenders’ debt-collection practices are distorted by including steps that involve the customer paying additional fees. The range, complexity and level of these charges may all be matters for consideration. But the central question that will no doubt be raised increasingly with the ombudsman is whether or not the charges levied are lawful.

 

More generally, as my earlier brief example of the mortgage arrears fee shows, the application of extensive fees for customers already experiencing debt problems may not be fair treatment. Certainly it does not always sit well with the sympathetic and positive treatment of those in hardship.

[Suetonius]

With the FOS it might even be worth a try to stay completely away from any legal arguments and just concentrate on the fairness of such charges - (not as in the Unfair Contract Terms) as in how can it be fair to charge (therefore increasing the amount of debt) someone that may already be struggling to pay what they owe.

 

If that person cannot afford to pay what they owe how are they expected to pay more than they owe as a result of additional charges.

 

How can increasing the debt (by additional charges) be fair and reasonable ?

[tifo]

mortgages

 

These cases are expected to increase in line with tighter lending policies and a higher level of repossessions. Some issues relating to sales and contract terms will emerge as customers reach the end of existing deals and find renewal terms unattractive. And there is the potential for a significant volume of disputes around mortgage late-payment charges and other similar charges.

 

I told him this and the response was that even though people complain about arrears charges, they (the FOS) do not investigate them as it is a commercial decision by the bank and the FOS do not set tariff. They then look at the overall treatment the consumer received.

 

Below is some of what i've been told, though most was said over the phone:

 

"it is not my job to set an account tariff or to decide what should been charged"

 

" the Supreme Court ruled current account charges are not subject to fairness. As far as providing a breakdown in costs is concerned, I cannot compel the bank to provide this information. Unlike the regulator, we do not have powers of enforcement"

 

"I am unaware of the regulator encouraging consumers to pursue such claims. the Service has continued to investigate complaints relating to mortgage arrears fees"

 

"I am satisfied the fees and charges were applied in a fair and reasonable manner"

 

"I am satisfied the fees and charges were applied whilst the account was in arrears and required additional administration. As such, I consider their application fair and reasonable"

 

"I am required under section 228 of the Financial Services and Markets Act 2000 to determine your complaint by reference to what I consider to be fair and reasonable in all the circumstances"

[Suetonius]

. As far as providing a breakdown in costs is concerned, I cannot compel the bank to provide this information.

 

The Adjudicator whilst familiar with section 228, should also be equally familiar with section 231

 

231 Ombudsman’s power to require information.

 

(1)An ombudsman may, by notice in writing given to a party to a complaint, require that party—

 

(a)to provide specified information or information of a specified description; or

 

(b)to produce specified documents or documents of a specified description.

 

(2)The information or documents must be provided or produced—

 

(a)before the end of such reasonable period as may be specified; and

 

(b)in the case of information, in such manner or form as may be specified.

 

(3)This section applies only to information and documents the production of which the ombudsman considers necessary for the determination of the complaint.

[slgsue]

I have my ongoing case with the fos, I did however receive an offer of settlement from SPML for a measly £500 which I refused as it was not even a quarter of what they had charged me. This was I believe to refund 3 of the monthly £115 late fees and and 3 lots of £50 fees. I am wondering if there is any chance that the fos will take into consideration the fact they have offered to refund some of them as admittance of them being unfair?

 

On another note, I spoke with Acenden today to query the new charges, in particular the £5 fee for payment methods being anything other than direct debit. This is to come into play on 4 April 2011 and will be for any payments made on your account that require you to speak to a person to take the payment. Apparantly a new telephone payment system is being put into place and this is free. Should you go into Barclays and make your payment, speak to one of their "advisors" to make a payment or use a standing order, than the fee will be applied. Basically it would appear to me that we are paying them with these fees to do their job £5 for a 10 minute phone call - cant be bad!!! - another money saving tip from Acenden!!!!

[tifo]

The Adjudicator whilst familiar with section 228, should also be equally familiar with section 231

 

231 Ombudsman’s power to require information.

 

Thanks. My adjudicator was doing everything he could NOT to look at arrears charges. He's now left so am waiting for it to be re-allocated again. Hope the next one looks at things properly.

[peterjm]

Yet another one fined with mirror like practices similar to acenden

read the full pdf with the peach that the £50 arrears management fee is unfair and didn't reflect the true cost of administration and has to be refunded!!!

 

 

 

FSA/PN/025/2011

22 February 2011

The Financial Services Authority (FSA) has today announced that it has fined DB Mortgages, part of the Deutsche Bank Group, £840,000 for irresponsible lending practices and unfair treatment of customers in arrears, and secured redress of approximately £1.5 million for DB Mortgages’ customers.

On lending practices, DB Mortgages failed to show that customers could afford mortgages sold where the term continued after their retirement, failed to consider whether there were cheaper mortgages available for customers seeking self-certified mortgages, and failed to ensure that customers had thought about where they would live at the end of the term if they needed to sell their house to pay off an interest-only mortgage.

On treatment of customers in arrears, DB Mortgages did not consider customers’ individual circumstances or tell them about the range of options that were available to them, and applied charges that were unfair because they were charged repeatedly or did not accurately reflect the cost of administering an account in arrears.

Margaret Cole, the FSA’s managing director of enforcement and financial crime, said:

"Firms need to understand that we will not tolerate lax lending practices and unfair treatment of customers in arrears.

''Firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged by their failings''.

The FSA has taken into account that DB Mortgages worked in an open and co-operative way with the FSA and has made significant improvements to its arrears handling procedures. As a result of early settlement, the firm also qualified for a 30% discount under the FSA’s settlement discount scheme. Without the discount, the fine would have been £1.2 million.

 

Notes to editors

 

 

1. The Final Notice for DB Mortgages. [pdf]
   

[Londres]

Yet another one fined with mirror like practices similar to acenden

read the full pdf with the peach that the £50 arrears management fee is unfair and didn't reflect the true cost of administration and has to be refunded!!!

 

 

 

FSA/PN/025/2011

22 February 2011

The Financial Services Authority (FSA) has today announced that it has fined DB Mortgages, part of the Deutsche Bank Group, £840,000 for irresponsible lending practices and unfair treatment of customers in arrears, and secured redress of approximately £1.5 million for DB Mortgages’ customers.

On lending practices, DB Mortgages failed to show that customers could afford mortgages sold where the term continued after their retirement, failed to consider whether there were cheaper mortgages available for customers seeking self-certified mortgages, and failed to ensure that customers had thought about where they would live at the end of the term if they needed to sell their house to pay off an interest-only mortgage.

On treatment of customers in arrears, DB Mortgages did not consider customers’ individual circumstances or tell them about the range of options that were available to them, and applied charges that were unfair because they were charged repeatedly or did not accurately reflect the cost of administering an account in arrears.

Margaret Cole, the FSA’s managing director of enforcement and financial crime, said:

"Firms need to understand that we will not tolerate lax lending practices and unfair treatment of customers in arrears.

''Firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged by their failings''.

The FSA has taken into account that DB Mortgages worked in an open and co-operative way with the FSA and has made significant improvements to its arrears handling procedures. As a result of early settlement, the firm also qualified for a 30% discount under the FSA’s settlement discount scheme. Without the discount, the fine would have been £1.2 million.

 

Notes to editors

 

 

1. The [pdf]
   

 

Why does the Final Notice specifically say arrears management fees charged prior to 31 May 2010? DB Mortgages was charging arrears management fees after this date (I should know). The release does not say anything about the arrears management being unfair or not reflecting true costs of administration. It only makes reference to the solictior's instruction fee being £83 more than it should have but it does not go into that same level of detail about the arrears management fee. All it says is

 

"DBM will refund £50 to every borrower who was charged a £50 monthly arrears management fee prior to 31 May 2010; and"

 

It would have been nice if they had provided more detail about the arrears management fee to give people better ammunition against other lenders. They used the 31 May date specifically for a reason and it's not clear why from reading the notice and that bothers me.

[Crapstone]

It's late...but I will get back to you on this tomorrow.

[peterjm]

The problem as I see it is that the fos takes so long most complainants may have submitted arguments that do not include latest developments or the complaint in the form thats now been thrashed out and fine tuned thanks to other posters to a compelling argument which on the face of it is indefensible.crapstone has met with success through sheer hard work and performance clearly signalling that you must not give up and if possible go as far as you can right up to the ombudsman if necessary and re argue your case with the new arguments that have been recently posted.

[Suetonius]

The way I understand it, there is nothing to stop anyone from sending further information to support their complaint to the FOS, once it has started investigating...

 

So even if someone made a complaint 12 months ago, they could still send the latest developments to support their complaint. Even if the case is now closed and was previously rejected by an Adjudicator, they could ask for it to be reviewed again (taking into consideration the latest developments) by an Adjudicator.

 

The only thing that would prevent this is if a Final Decision had been made by an actual Ombudsman.

 

You can supply more information to support your complaint, you just can't add new issues.. You always have to complain to the company involved first, giving them either 8 weeks or until you get a final response (which ever is sooner) before the FOS will investigate... Even then any new issue will have to be made as a seperate complaint...

[Suetonius]

Of course there is always the option of taking them to Court which is easier and less expensive then people generally assume....

[Suetonius]

Use their own rules against them... If they say they have no powers to request information, show them that they have...

 

If they say the charges are fair, ask them how do they know if they don't have a breakdown of each charge...

 

Use the search facility on the FOS website to finds lots of useful snipets....

 

You want to make it as hard as possible for them not turn down your complaint..

 

Just keep your complaint relevant....

[peterjm]

`Someone must have posted this before but things are easily lost in the far distant past,it must be worth printing off to add weight to your arguments. Note the comments re HML who seem to perform the same role as capstone ie administrator and the comment

 

An industry insider said: “It’s a question of when, not if, this will apply to other lenders.

We're still waiting 12 months on what an indictment,how many have lost their homes through in the main unfairly added arrears fees to swing the courts against them.

 

UK NEWS

 

 

HOME OWNERS WIN MORTGAGE REFUND

 

 

 

Lenders face being forced to hand back millions of pounds in fees

 

 

Monday January 25,2010

 

By Sarah O'Grady

 

 

HUNDREDS of thousands of home owners could be in line to collect hefty refunds for unfair mortgage charges.

 

 

Lenders face being forced to hand back millions of pounds in fees imposed on customers who missed their monthly loan payments.

One firm has been fined £2.8million and made to return £7.7million to borrowers when it was found to have acted unfairly.

The crackdown by watchdog the *Financial Services Authority is likely to lead to claims by hundreds of thousands of home owners who believe they have been harshly penalised.

Terry Balfour, of insolvency *specialist IVA.com, said: “It’s good to see the financial watchdog stepping in on the side of the thousands of borrowers in *arrears with their mortgage.

“Banks and other mortgage lenders all too often impose punitive charges when their customers get into trouble with repayments.

“It is understandable that a modest fee for additional administration may be *imposed, but piling substantial penalties on to households which are clearly struggling is unnecessary and will only serve to further line the bulging coffers of many lenders.

“When people are in trouble with their mortgage they need help and advice and a bit of a breathing space – not to be hounded for even more money which they cannot repay.”

 

The FSA fined lender Gmac-RFC for how it treated customers between October 2004 and November 2008.

 

The fine was partly due to the £45 a month levied on borrowers who went into arrears.

The watchdog said this was “excessive” and did not reflect administration costs.

 

However as many as 30 lenders – including Bradford & Bingley, the Derbyshire and Cheshire Building Societies and specialist lenders like

 

Kensington and Morgan Stanley – have a similar charging structure.

 

 

 

According to the Council of Mortgage Lenders 195,000 borrowers are currently in arrears and this figure is expected to rise to 205,000 this year.

High street banks, particularly those in receipt of government bailout funds, have been forced to adopt a more tolerant approach to struggling borrowers. But many non-mainstream lenders like Gmac-RFC outsource the administration of their loan books to companies that are not so sympathetic.

 

Outsourcing firm Homeloan Management (HML), part of the Skipton group, processes loans for more than 400,000 other borrowers, including customers of the Derbyshire and Cheshire Building Societies.

Although HML refuses to publish statistics on arrears, a similar pool of 400,000 loans from Gmac-RFC shows that 20 per cent of borrowers are behind with payments.

This suggests that as many as 80,000 customers with loans processed by HML are being charged a monthly fee that the FSA deems unfair.

An industry insider said: “It’s a question of when, not if, this will apply to other lenders.

 

 

 

“It is causing a mighty problem as lenders and HML do not have the staff to look at individuals on a case-by-case basis.”

The FSA is set to release a report later this week and five more mortgage lenders are in line for fines.

Cerris Tavinor, an FSA spokeswoman, said: “We completed our investigation into Gmac and published the results of that case.

“We have made the point publicly that we have referred other lenders to enforcement, so other work is carrying on.”

Neil Warman, the chief commercial and finance officer at HML, said: “We are not able to comment on specific client *circumstances but we work closely with a number of lenders, managing their customer mortgage accounts in line with their lending and administration policies.

“In the event of one of our *clients wanting to make a *retrospective adjustment to the mortgage accounts we manage for them, then we would work with them to help this to take place effectively.”

 

 

 

 

Read more: http://www.express.co.uk/posts/view/153924Home-owners-win-mortgage-refund#ixzz1EyBPuNyD

Edited February 25, 2011 by peterjm

[caro]

For info.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/120.shtml

 

http://www.fsa.gov.uk/pubs/final/redstone.pdf

 

http://www.fsa.gov.uk/pubs/final/db_uk.pdf

http://www.fsa.gov.uk/pages/consumerinformation/firmnews/2011/db_mortgages.shtml

 

 

It is now completely clear that any arrears charges which exceed actual administrative costs are unfair and therefore unlawful.

 

Furthermore, irresponsible lending practices are also unfair and unlawful.

 

Additionally there are other unfair practices including unarranged counsellor visits - even if they have been attempted.

 

You are entitled to refuse counsellor visits and not incur any charges.

 

Any charges for counsellor visits must not seek to make profits. The cost of the visits must be passed on to you at cost price.

We are hearing stories of people being charged for counsellor visits for which there is no evidence that they were even attempted.

 

It is clear that some mortgage lenders are trying to cheat you out of your money.

 

You should ascertain how much has been taken from you and claim it back. The chances of winning are better than 90%. It is highly likely that the lender will attempt to avoid court action and offer you back your money.

 

However, you should ensure that you receive a proper rate of interest and this means that you should be seeking at least restitutionary damages - which would be much higher than the statutory 8%.

 

Furthermore, you should assess whether the paying of demands for unlawful excessive charges has also out you further into arrears and if this has caused you further penalties in terms of extra interest or any other prejudice. This should be claimed as well.

 

If excessive unlawful charges have resulted in your credit file being affected, then you should take this into account also when working out exactly what you want by way of remedy from the lender.

 

You should consult others on these forums when considering any offer.

 

You must not make any complain through the Ombudsman. your time will be wasted, you will wait up to 2 yrs and there will be a minimal 8% award of interest and no account will be taken of any other damage you have suffered.

You must make your complaint through the County Court for a rapid and effective remedy.

[Crapstone]

That's all Ok for BF to write but what does he actually know? That's Redstone. And I have no idea where he gets the thought that damages won't be offered from the Fos!

 

To tell people not to make a complaint..hmpphh..It's a free option and not all people can afford to waste the courts time without mediation as he may have done. The court option is always open every step of the way unless you accept a final decision. For further issues you still have other steps....you can take them to court if the Fos haven't looked at or addressed them.

 

To say it's 'completely clear' .......If it were that clear everyone would be getting a refund and not being dragged through the courts.