One of the initial targets has been borrowers with interest-only mortgages. Other possible areas include deals where a decision was made to self-certify a mortgage or opt for sub-prime when a more mainstream loan would have been possible, and where the mortgage term extends into retirement. Even where there may have been issues with affordability or an unexpected change in circumstances, these are considered possibly fruitful areas for complaints.
The claims firms, with names such as missoldinterest.com and dodgybroker.com, refer to the failure of the adviser or lender to advise consumers or check their circumstances and details properly. They can be pretty emotive about these failures.
One suggests that mortgage brokers and lenders were motivated by greed in selling mortgages. Brokers, they argue, only presented borrowers with products that paid them the highest commissions.
Another seeks to discourage borrowers from going direct to the lender to sort out any claim themselves because “The mis-selling industry is a highly specialised field and you would need to make sure you fully understand the law and the implications.”
Do it yourself?
Many of the firms also boast no upfront fee charges. Many operate on a no-win, no-fee, basis but take a percentage of any compensation they manage to obtain. Of course, borrowers dissatisfied with an adviser’s or lender’s response to a complaint can approach the Financial Ombudsman Service (Fos) themselves without having to pay a penny or forfeit any compensation they might be due.
However, campaigns by the claims companies are likely to trigger more complaints and Fos is quick to acknowledge that they can reach more people and spread awareness more effectively than it can. If it means people who have been mis-sold make a complaint, Samantha Hargreaves of Fos said, then that was not necessarily a bad thing.
So far, however, Fos has not seen any significant increase in the number of complaints about mortgages and how they were sold. Graph 1 shows the number of mortgage-related complaints that Fos has dealt with since April 2000 compared with the number of overall complaints. So far there appears to be no marked rise in mortgage complaints compared with other products.
Fos attributes the slight increase in 2007/8 to complaints about the fairness of mortgage arrears administration fees as people began to feel the recession pinch. There were also more complaints about how lenders handled arrears problems.
