Barclays ignores Fos ruling and reverses mortgage rate hike
Barclays has decided to ignore a ruling by the Financial Ombudsman Service in its favour and reversed a mortgage rate increase for a client who applied to have his former partner removed from the loan.
In 2010, Jan Milkowski notified Barclays that he wanted to remove his former partner’s name from his joint mortgage, which was held with Barclays.
Barclays agreed to the change but stated that its policy terms had changed in August 2010, when Mr Milkowski requested the change, and therefore he had to remortgage with a new rate.
The original joint mortgage was charged at 1.25 per cent as it was a tracker that was charged at 75 basis points above the base rate; the new mortgage rate was set at 3.69 per cent.
Mr Milkowski took the case to the Fos, which found in Barclays’ favour at the end of last year. The Fos ordered Barclays to pay £400 for the distress and convenience caused but refused to order the bank to reverse the rate increase.
Mr Milkowski later contacted Julie Roddy, director of retail operations for the UK, who had signed an apology letter relating to an error on a mortgage statement, who passed the case on to Karen Connell, head of mortgage operations at Barclays.
After a number of letters and emails between Mr Milkowski and Ms Connell, the bank decided to ignore the Fos verdict and reverse the rise as an “exceptional circumstance”.
Mr Milkowski said: “She said they can convert my joint mortgage to a single mortgage with the same interest rate, which was base rate plus 0.75 per cent. It completed last Friday.
“The only difference between my old mortgage and my new mortgage is that is now a sole mortgage.
“It seemed like they did this as a goodwill gesture as they said I was a valued customer.”
A spokesperson from Barclays said: “Following a further approach by Mr Milkowski, his case was reviewed by senior management who agreed to allow the mortgage to proceed as an exceptional circumstance.
“As a responsible lender we do have a Bank policy in place, however we do also look to support our customers in their situations and take each case on its merit in line with our policy guidance.”
Following the initial Fos decision Mr Milkowski approached Chelsea Building Society and found a new product, for which he paid a valuation fee of £605 and an application fee of £195, both of which were non-refundable.
Mr Milkowski has written to Natalie Ceeney, chief executive of Fos, demanding repayment of the £800 fees incurred. He said if Fos do not reimburse the fees he will take it to the small claims court.
A spokesperson for the Fos said: “The Fos issued its final decision and is confident in the decision made.”