Fos drops 'spurious' buy-to-let complaint against IFA

Fos drops 'spurious' buy-to-let complaint against IFA

Adviser Philip Milton has welcomed the decision of the Financial Ombudsman Service to drop a case based on what he said was a "spurious" complaint relating to a historic buy-to-let transaction.

Several months ago, Mr Milton, adviser and founder of Barnstable-based PJ Milton, was contacted by a client who claimed that a buy-to-let remortgage he sourced for her had not been reviewed.

This was despite the firm writing to her offering to rebroke the mortgage at the end of the initial term, several years previously.

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This meant she had paid more interest than she should have.

She also claimed Mr Milton had not advised her that she could offset the interest from her rental income.

As he was not her accountant, he did not undertake this work but had offered her tax advice and tax return work if she wanted it, an offer which she had not taken up.

Mr Milton said: "Effectively, this lady had undertaken a buy-to-let mortgage in 2007 (not on her home) and before these were incorporated into the ombudsman’s jurisdiction.  

"She was always very limited in the information she gave to us but we sourced a remortgage based on what we had.

"However, the complaint suggested that we had never reviewed the mortgage subsequently."

When she complained to Mr Milton, he sent a senior management decision letter which detailed all the dates when various services and assistance had been offered.

However, she did not accept this, so she lodged a complaint with the Financial Ombudsman Service earlier this year.

Mr Milton told FTAdviser: "We then had to reply and copy all the correspondence to it. We suggested the ombudsman was not only outside of its jurisdiction but that the complaint was time-barred anyway, being beyond the six years and/or the three-year periods for a complaint to be considered.

"In the past we have had a similar instance which dragged on for absolutely ages and in the end, the ombudsman never wrote to confirm that we were correct so we could only trust we had ‘won’ by the length of time – which is not helpful when we have to note for our accounts and professional indemnity insurers, despite our pressed enquiries.

"However, in this instance we received a very prompt letter, noting that the file was being closed and that the case would be excluded from our statistics for charging and so on."

He added that he commended the ombudsman for this "new efficiency and equitable and common-sense approach to matters regarding jurisdiction".

Caroline Wayman, chief executive of Fos, said: "Over the last few years, we’ve been radically changing the way that we work to better meet our customers’ needs – both businesses and consumers – and we now have ombudsmen available on the front line helping to sort out complaints much more quickly.