The decision means that C&G will not seek a final determination from the Ombudsman, and will now settle with borrowers who had complained to C&G while the C&G Variable Rate offer was still open. The lender said that this number was in the hundreds, rather than thousands as had been reported in the media.
However, there is a possibility that more borrowers will eventually be compensated as the FOS is still reviewing a further test case.
Roger Burden, managing director of C&G, said: " We are disappointed with the Ombudsman’s ruling. We feel that the adjudications against all lenders have resulted in the withdrawal of initiatives that were designed to benefit borrowers not disadvantage them. This was also the view of the media when the initiatives were launched.
"It should also be remembered that the Financial Ombudsman Service is there to determine individual complaints in individual cases and not to determine lenders’ strategy or pricing. I believe that recent reporting of decisions in respect of the dual interest rate issue, and arguably even the rulings themselves, have blurred that line and created confusion. Consumers benefit from strong competition between lenders and there is a danger that this could be substantially diminished if we all fear that new lending initiatives might render us liable to retrospective financial penalties.
"C&G borrowers have always benefited from being able to transfer to any of our available products – subject to the terms and conditions of their existing mortgage arrangements – and this will continue. "
