Mortgage missed collections

sidebp

Hi,

I'm after some advice if someone would be so kind?

I have a mortgage with HSBC; cutting a long story short through an admin. error on their part they failed to end the interest only (Home Start) period on time (a year late and counting). I noticed this and immedietely made an appointment with one of their mortgage advisors, after
very little time she admitted that it looked like they were at fault and promised to investigate with priority. Three months past by and I heard nothing so I contacted them once again; again they admitted they were at fault and raised a complaint for me. I have just heard the outcome of there investigation and they have proposed three options:

1) Repay the amount in one lump sum (circa £2,800).

Nice for them, not so nice for me. I manage my incomings and outgoings as evidenced by the fact that I've never missed a payment and have always been in credit in my current account, whilst I may be able to pay this amount I don't see why I should have to do so at short notice - I presumed it was being collected by them on time, as instructed and agreed; this is their mistake, I don't see why I should now have to use up savings which are reserved for other purposes. If they'd collected the money as requested then I would have managed my money differently over the last year; I kept my side of the agreement.

2) Repay the amount via a DD collection each month. Assuming no interest would be charged (which I'm sure it would!), over 12 months this will equate to approx £233 extra a month.

* Since it's paid back monthly it Will presumably accrue additional interest - why should I be liable for this?

* I can afford my mortgage now but when things get tougher and rates (almost inevitably) increase I may not be able to pay the additional amount on top of increased interest charges, thus I will end up having to agree new terms, risk falling short or simply not paying the additional amount (thus extending my mortgage beyond my desired completion date). Again, why should I now pay for their mistake?

3) Do nothing.

Effectively extending my mortgage an additional year (and paying more interest on the outstanding capital).

They have agreed to refund the interest I overpaid (they believe this to be £48 which seems a bit low given I owe them £2,800). They have also offered £25 as an apology, I have told them I do not want them to pay this as it could be interpreted as settlement. When I told them this
they asked what they could offer so that they could resolve the case - I have told them I need to consider my next actions (which may result in seeking IFA).

Any thoughts on where I stand? Who I should pursue with? What would be considered a reasonable outcome?

Who knows how much I might have underpaid by if I hadnt spotted the error; I'd be more inclined to overlook the error if they'd responded in a timely manner but I don't feel they have and thus in the three months since initially complaining I owe even more money.

Thanks.

dunstonh

Any thoughts on where I stand?

You do have to pay it and the options they are giving are typical for errors of this sort.

Who I should pursue with?

At the moment, you have no choice but to stick with them. If they refuse your demands then at that point you can take it to the FOS. However, you need to be aware that the FOS will view this as an error that HSBC are correcting at no extra cost to you and offering a goodwill gesture. They may just decide to side with HSBC or tell them to slightly up the goodwill gesture.

What would be considered a reasonable outcome?

The options given with £250 goodwill.

sidebp

They havent offered, £250, they've offered £25 (which I see as a bit of an insult).

I'm certainly not prepared to pay interest on money they should have collected (if I opted to pay DD over payments)! Doing nothing is not a sensible option if I want to finish the mortgage when planned, which effectively leaves the option of paying it in one lump sum...

My grievance isnt so much with the missed collections more with the fact that it has thus far taken a quarter of a year and significant prodding for them to do anything about it; if I hadnt raised the issue with them then it may not have been picked up - where would I have been 2,5,10 years down the line?!

dunstonh

They havent offered, £250, they've offered £25 (which I see as a bit of an insult).

They have asked you to come back with a figure and £250 is my suggestion. Its the sort of figure that the FOS regularly dish out when they have complaints of this nature (where no financial loss exists).

I'm certainly not prepared to pay interest on money they should have collected (if I opted to pay DD over payments)!

If you dont ask, you dont get. However, it would not be unreasonable for them to charge interest on it as you are effectively borrowing that money and you have also had benefit of the money you havent paid each month. So, ask away and if you get it then its a result.

My grievance isnt so much with the missed collections more with the fact that it has thus far taken a quarter of a year and significant prodding for them to do anything about it; if I hadnt raised the issue with them then it may not have been picked up

That is the why you ask for £250.

where would I have been 2,5,10 years down the line?!

Thing is that you are not and the FOS wont rule on a hypothetical. They will look at the position now.

The one negative against you is that you knew this money wasnt going out. So, you should have been prepared to make up the back payment and have the funds available. If you didnt know, then you would be in a stronger position.