West Brom landlords demand Fos re-open files

Earlier this month, the Court of Appeal ruled the West Bromwich Building Society was wrong to vary mortgage interest rates in the absence of a change in the Bank of England base rate.

In September 2013, more than 6,000 buy-to-let mortgage borrowers received a letter from the lender advising them that an additional premium was being added to their lifetime trackers.

Separately, six months before that, Bank of Ireland also charged an additional premium to more than 13,000 of its lifetime tracker rate holders.

I am going to give the Fos an opportunity to vindicate themselves. Mark Alexander

Both the Bank of Ireland and West Bromwich Building Society encouraged affected borrowers to contact the Fos if they were unhappy.

Mark Alexander, who runs the Property 118 Action Group which represented West Bromwich Building Society buy-to-let landlords, said the fact the ombudsman found in favour of the two lenders was what prompted the legal action.

He stated the Fos “monumentally screwed up” by finding in favour of the West Bromwich Building Society.

“I have no doubt that several borrowers who were affected by this will be calling for resignations but I’m not going to do that. Instead, I am going to give the Fos an opportunity to vindicate themselves.”

He called on the Fos to re-open complaint files in respect of their decision to disregard contractual obligations on their variable rate mortgages.

A spokesman for the Financial Ombudsman Service declined to comment on Mr Alexander’s remarks.

A spokesman for the Bank of Ireland respond that the West Bromwich case was not comparable, as Bank of Ireland’s offer document and mortgage terms and conditions expressly stipulated the tracking margin or differential could be varied.

The spokesman added that the offer and mortgage conditions documents were consistent, allowing for the differential to be “lawfully changed.”

peter.walker@ft.com