An elderly woman had her complaint to the Financial Ombudsman Service rejected, despite claiming Sesame mis-sold her a lifetime mortgage after her son handled the entire application.
The 81-year-old woman – referred to as Mrs L by Fos – was represented by another family member who claimed she was pressured into taking out the mortgage by her son, who was given the loan amount as a gift.
It was also claimed that Mrs L did not sign and return documents, which should have alerted Sesame to the possibility of undue influence.
According to Fos, Mr B – her representative to Fos – alleged that the mortgage was not suitable for Mrs L and she did not understand its terms.
While the documents said Mrs L wanted a lump sum of more than £60,000, he claimed this was not correct.
It was also alleged that she did not receive the fact-find, suitability letter and key facts illustration and that they contained factual errors which suggested Mrs L did not receive them or provide the information in them.
But ombudsman Ruth Stevenson found in favour of Sesame, claiming she was not convinced the mortgage it recommended was unsuitable.
She said: “Letters and documents produced at the time say that Sesame completed the fact-find after discussion with Mrs L.
“While her son may have been present and managed the application process for her, I am not persuaded Sesame had any reason to doubt the information given to it about Mrs L’s objectives.
“I am satisfied Sesame sent letters and documents to Mrs L at her address. While Mr B says Mrs L did not receive these, I am not persuaded Sesame could reasonably have known this.”
Ms Stevenson found Sesame did a fact-find with Mrs L and sent a letter of suitability which said her objective was to raise a lump sum for her son.
She did not want to move house and did not want to risk owing more than the value of the house, and on this basis Ms Stevenson said she was not persuaded the mortgage Sesame recommended was unsuitable.
In addition, Sesame’s file notes record a number of telephone conversations with Mrs L about the mortgage, and Ms Stevenson said she was not convinced the woman was unaware of the amount of the loan, or that she did not want the mortgage to proceed or was acting under duress.
Ms Stevenson said: “While I sympathise with the family circumstances that have led to this complaint, I am not persuaded Sesame mis-sold the mortgage.”
Alan Hughes, a partner specialising in financial services at City law firm Foot Anstey, said: “If an adviser is accepting instructions from someone on behalf of a client he should take reasonable steps to make sure that person has appropriate authority.
“Meeting the client will be one of those steps, as well as checking with the solicitor. If the person benefits from the advice you give the client that could be a red flag.
“The woman could still take legal advice as Fos rulings are not binding on the courts.”
Right to Reply
A spokesman for Sesame said: “Sesame regularly reviews its assessment standards, which includes all feedback received from Fos, to ensure our approach is accurate and reflects current practice.
“We are satisfied that the procedures we have in place ensure a consistent and fair approach to complaint handling and treating customers fairly.”
