Fee charging cases concerning overdrafts have rocketed in recent months and the industry has been on alert for other areas which lenders could be cited on.
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Now Richard Fox, chief executive of the Society of Mortgage Professionals, has warned lenders must evaluate all their charging to make sure it is compliant, especially over arrears fees.
“With arrears charges, you need to be certain to justify all the different fees as it might be against TCF. But banks should review all their dealings with consumers to make sure they are complying with the TCF rulings.”
The FOS admitted it had seen its first challenges on mortgage arrears charges in the first quarter of this year.
Emma Parker, press officer at the FOS, commented: “We have started to see complaints on charges, e.g. how much was being charged to send a letter, and most of the cases have been settled by the lender. It has only been about 50 cases though so it’s not a huge amount, especially compared to bank charges, but it is the first time we have seen lenders challenged.”
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However, Linda Will, managing director of Accord Mortgages, believed many of the charges associated with arrears were unchallengeable.
“I think there has been a muddying of the waters over this and there is a danger of lumping all charges together, which is confusing for everyone. For lenders, if you are charging for the default and all the different aspects are clearly visible to the client then they are beyond challenge.”
