Mortgage broking - Excessive application charges

There is usually at least one fee to pay when taking out a mortgage. The arrangement fee used to be covered by the mortgage company, but now increasingly has to be paid by the customer when they take out the mortgage. You can usually choose to add this to the mortgage (bear in mind that you will pay interest on it for the duration of the mortgage) or pay it upfront. You might also be charged a mortgage booking fee to secure a specific rate or discount deal.

If you think these charges are unreasonable, you can raise the issue with the bank or building society; this also applies if you believe that you were not made aware of the costs during the application process.

• Any financial organisation is obliged to treat you reasonably. If you feel that any action has been unreasonable, you have the right to make a complaint.
• After eight weeks you can take your complaint to the Financial Ombudsman – resolver will remind you when you can do this.
• Your mortgage broker might not respond back via Resolver; however, any case submitted by resolver is recognised as an escalated complaint by the Financial Ombudsman, and your case will be accepted if you are unsatisfied after eight weeks have passed. 
• You have the right to claim for your time and the inconvenience caused if your case goes to the Financial Ombudsman Service; it can also award interest at 8%, but this will not be compound interest. 

If you have a complaint with your mortgage broker, you can use Resolver to raise and manage the complaint. While not all financial organisations will respond to Resolver, they are obliged to take and handle your complaint when it is submitted via Resolver. This means that, if you are not satisfied after eight weeks, resolver will remind you that you can escalate your complaint to the Financial Ombudsman Service. 

Reasonable & fair

All financial organisations in the UK are required to treat you fairly, and to ensure that their actions are reasonable. These are the key principles for any financial product, so ask your friends or family member for their opinion on whether you have been treated fairly – this is a good way to determine if you have a reasonable complaint.

Discrimination

Discrimination is unacceptable as part of the reasonable and fair approach; if you have experienced discrimination, you have the right to make a complaint. 

What you cannot complain about

Issues such as an investment losing money are not covered by the Financial Ombudsman Service, unless you were not made aware of the risk. 

Should I use a Complaints Management Company?

Claims Management Companies (CMC) will handle a complaint for you in certain areas, such as Payment Protection Insurance (PPI). A CMC will charge you a fee, which is often between 30% and 40%. However, following the complaints process is something that can be done yourself, and it is unlikely that you will get a better result from using a CMC than by going directly to the company yourself. 

Raising a complaint

If you have a complaint, first ensure that it is reasonable; if you believe that it is, you can use Resolver to submit your issue. Any complaint from Resolver is an official complaint, and the firm is therefore obliged to act upon it; if it’s not resolved, you can take your case to the Financial Ombudsman Service. 

In your complaint, ensure that you state your issue clearly and concisely, give information about when the problem happened or began, and say how you would like it to be resolved. The bank or building society may or may not respond back via resolver, but it does have to respond, as your case will be recognised by the Financial Ombudsman Service. 

Managing your case 

During your complaint you can use resolver to manage your issue: you’ll be able to upload documents, store emails, set reminders and make notes about your case so that you have a complete file to send to the ombudsman. 

If your issue is not resolved

If you feel that your issue has not been addressed, resolver will remind you when you can escalate your case to the ombudsman: this is possible after eight weeks. 

From which date can I make a claim?

The statute of limitation in England and Wales is six years; in Scotland it is five years. In theory you can make a claim that dates before this, but the probability of winning is considerably reduced. 

You must also contact the Financial Ombudsman Service within six months of your last communication with the financial organisation. 

Financial Ombudsman Service

The Financial Ombudsman Service will independently assess your case. There is no charge to the consumer for the assessment, but you must wait eight weeks before you can take your case to the ombudsman. An exception to this is if the issue relates to a payday loan, in which case the ombudsman will accept your case immediately, to ensure that you do not experience hardship.

Can I claim for time and hassle?

There is an award in a quarter of cases that are assessed by the Financial Ombudsman Service. The compensation guidelines state an allowance of £50 to £100 per day, and no more than £10 per hour. Be sure to keep records of the time that you have spent handling your case.

Financial Ombudsman Service decision 

The ombudsman will make a decision on your case and provide an outcome that is binding on the company. You can choose whether to accept the decision. 

If the decision is held in your favour, and you are awarded financial compensation that relates to miss-selling, you will be awarded interest at 8%. This is not compound interest, so you will not receive interest on the interest. 

If you are still not happy

If you are dissatisfied with the outcome, you could consider switching bank or provider. The final option would be to take the bank to court; you should get expert legal advice before taking this route.

Bank goes bust

If your bank or another financial firm goes bust, you might be able to claim compensation via the Financial Services Compensation Scheme. You are limited in the amount that you can claim - these limits are:

• Deposits: £85,000 per person per firm
• Investments: £50,000 per person per firm
• Home finance (mortgage advice and arranging): £50,000.

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