Co-operative Bank ordered to refund mortgage ERC

“Had a call been received in a timely manner, I think it's more likely than not that Mr and Mrs M would've chosen to stay with Platform as their lender and ported their existing mortgage, and therefore avoided paying the ERC.”

The ombudsman said Platform’s turnaround times of eight to ten weeks from application to offer were “at the very end” of what he would call reasonable and that in the majority of cases it was “almost removing the option to port given that it can't be turned around within a reasonable time scale”.

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“If a mortgage has a portable feature, then a lender should be able to facilitate this (including taking an application and carrying out its usual checks) within a reasonable timescale,” he wrote.

Given that the couple “were simply getting nowhere with getting a call back”, the ombudsman said it was not unreasonable for them to approach another lender for the mortgage.”

In response to Platform’s argument that the waiting times were caused by the pandemic, the ombudsman said he was aware that it offered much quicker timescales for other types of mortgage applications depending on how it was submitted. 

“It’s a matter for Platform to decide which area of its business it wants to prioritise within overall resource limitations. But it’s a matter for me to consider whether an individual customer was treated fairly – and in this case, because Platform wasn’t able to consider their application within a reasonable time, I don’t think Mr and Mrs M were treated fairly.”

The ombudsman ordered Platform to refund the ERC but took the view that no compensation was owed as the couple secured a lower interest rate of 1.89 per cent compared to their Platform rate of 2.04 per cent that finished a few months after the Platform rate would have. 

Deadman ordered that Platform add 8 per cent simple interest per annum from the day the ERC was charged until the day it makes payment.

A spokesperson for Co-operative Bank told FTAdviser: “We’re sorry that both Mr and Mrs M were unhappy with the timescales they experienced when looking to move their mortgage. 

“The Co-operative Bank has accepted the final decision from Fos and has paid back the ERC charge to Mr and Mrs M as well as the appropriate compensatory interest."