Fos and FCA scrutinise BOI mortgage rate rise

A spokesman for Fos said the verdict on the case would be delivered in “the coming months” after hundreds of buy-to-let and residential borrowers protested.

A number of individual complaints have also been submitted by Landlord Action on behalf of buy-to-let borrowers, the spokesman added.

Justin Selig, director of the organisation, said the rate rises contravened the Unfair Terms in Consumer Contracts Regulations 1999 and the ombudsman had submitted a complaint to the FCA.

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He said in many cases the bank’s documentation referred to terms and conditions that were provided with mortgage deeds, but only after the contracts for the loan were signed.

Mr Selig added: “In some cases our clients do not recall ever having received a copy of the relevant mortgage terms and conditions.”

Martin Wheatley, chief executive of the FCA, had previously told Andrew Tyrie MP, chairman of the Treasury select committee, that the regulator had not identified any unlawful breaches by the bank.

Correspondence published by the committee on 8 July included a letter from Mr Wheatley to Mr Tyrie on 12 March that said that the regulator had no jurisdiction over the mortgages because they were all taken out before 31 October 2004.

Mr Tyrie wrote to the FCA on 6 March to express alarm on the bank’s decision to trigger a special conditions clause in mortgage terms that allowed the lender to double the rate margin over the Bank of England base rate for 13,500 UK mortgage customers.

Spokesmen for the FCA and the bank declined to comment.