Complaints up over mortgage interest rate hikes
The Financial Ombudsman Service reports it continues to see complaints from mortgage customers following rises in interest rates which they claimed not to know about.
The borrowers stated they were not made aware that their rate could rise if the Bank of England Base Rate stayed the same.
It said: “Many of the cases we are receiving involve consumers who are experiencing financial pressure and have asked for extra help or flexibility from their lender – often in relation to their mortgage. With lenders facing cost pressures too, these cases are often difficult to resolve.”
The FOS said it had also started to see more cases where consumers haven’t been able to port their mortgage or renew on a fixed-term basis because of changes to businesses’ lending criteria.
Commenting on the news, Paul Broadhead, head of mortgage policy at the Building Society Association, said: “It is difficult to speculate what might occur with complaints in the future but in terms of mortgages the industry has a rather good record in keeping customers informed.
He added that, in addition, only 8% of mortgage complaints come from the building society sector.
“People struggling need to talk to their lenders in the first place, lenders will try to help, as repossession is always a last resort, it does not make good business.”
Although the 65,077 complaints the Financial Ombudsman received about banking and credit in 2013/2014, which included mortgage complaints, was lower than the 77,176 it received in 2012/2013, total volumes have since risen.
The FOS expects to receive around 76,000 new cases relating to banking and credit by the end of 2014/2015.
Its proposed plan and budget for the next financial year (2015/2016) noted that, apart from PPI, complaints involving banking and credit, including mortgages, continue to make up its largest area of work.