The decision comes as a campaign group which is bringing claims on behalf of more than 400 individuals and has raised over £500,000 to bring a group legal action was given a date of 21 January 2015 for a courtroom showdown with the lender.
Fos’s refusal to consider the claims could mean many of the affected individuals join the legal action, according to the group leading the campaign.
Back in March FTAdviser reported that Fos was reviewing the cases, which had been brought over a number of months and related to a decision by West Brom last September to increase buy-to-let rates from 1.49 per cent to 3.49 per cent for landlords with multiple properties.
The decision came into effect from 1 December that year and was blamed on “market conditions”, but prompted a backlash from the lifetime tracker mortgage holders who cited Treating Customers Fairly principles.
Fos said at the time the nature of the case would require a “new approach” to ascertain whether the building society’s terms were unfair. It has now confirmed that the legal action, combined with the fact that many complaints were not brought directly by consumers, meant more were rejected.
A spokeswoman for the ombudsman said it was unable to look at the way the loans were sold to customers because in complaints the mortgages were sold by an intermediary, so it had to investigate West Brom’s responsibility as the lender.
“We have been unable to look at a number of cases because the consumer is pursuing wider court action against the business. In addition a small number have been rejected because the case has been brought to us by a large landlord and therefore the complaint is out of jurisdiction,” she explained.
The National Landlords Association initially recommended its members to pursue the Fos route and await the outcome before considering legal action. Many of those who followed this advice and have had their claims rejected are now enquiring about joining the representative action, according to Property 118 founder Mark Alexander.
Last month FTAdviser reported that the campaign had been given permission to apply for a court date.
A new deadline of 19 December has been applied for participating in the claim. Each member has paid £1,000 into an account held by The Bar Council’s escrow service, plus a further £500 to Property118 and Cotswold Barristers to cover legal and running costs of the campaign.
The group’s counsel, Mark Smith, a barrister at Cotswold Barristers, told FTAdviser that while the trial will give one decision on one claim from the group, the Fos considered each individual complaint, with some dismissed due to connection with the group and others rejected on the basis of evidence given.
Mr Smith said that the judge at the Commercial Courts in the Rolls Building will look at the contract between landlords and lender, considering legal submissions and hopefully giving a decision on the day.
Mr Alexander explained that some members have a dozen or more represented mortgages, although most have one or two.
He said: “In the event of the case being won the majority of funds will be returned, plus of course a refund of any over-payments to West Brom and the satisfaction of their terms being upheld as per the borrowers understanding of the tracker rate mortgage contracts they entered into.”
peter.walker@ft.com
