HSBC booking fees - paying twice

prince_be

Hi all,

I applied and was approved for a HSBC Lifetime Tracker mortgage at the end of last year. The rate advertised on their website was 2.69%, but it turned out this was an error and it had changed to 3.19%. An annoyance, but the rate was still good so I went ahead.

At the point of approval, HSBC immediately took the £999 booking fee from my current account. Soon after, before I had drawn on the mortgage, HSBC launched their 'January Sale' which included the same product at a lower rate. The reduction in rate would save me about £60 per month of interest, so I asked my contact at HSBC what was involved in moving to the new product, assuming perhaps a small admin charge or reduced booking fee would be payable. She said I could change, but would have to pay the entire £999 booking fee again. I asked if she could do anything about that, especially given the initial mix-up with the rates. She said no, and I was under time pressure so had to agree to pay another £999. The savings will pay for the additional £999 within 18 months so financially it made sense.

But I can't help thinking it's shockingly unfair to have charged me again. I have banked with HSBC for at least 15 years. I wrote a letter of complaint asking them to reconsider, but they say 'The fees payable are not for the application itself, but for the reservation of the funds at a specific rate. Reserving these funds utilises a portion of the allocated funds. These are taken on a first-come-first-served basis...'. 'The costs of moving to an alternative rate were made clear to you in advance' etc. etc.

Should I pursue my complaint to the next level, and potentially the Financial Ombudsman, on the grounds that charging the full £999 twice is just plain unfair, and in no way reflected by the cost incurred by HSBC for my changing product, or am I wasting my time because I agreed to pay and it's all in their Terms and Conditions?

Many thanks in advance for any advice!
Ben.

dunstonh

But I can't help thinking it's shockingly unfair to have charged me again.

I disagree. You are buying a product and they tell you what the retail price is. You bought it. Then you decided you wanted another product. They told you the price and you paid it.

To look at it another way, its a bit like buying a TV then a few months later finding a better one comes out. The shop doesnt swap it over for free. You have to pay the full price for it.

hey say 'The fees payable are not for the application itself, but for the reservation of the funds at a specific rate. Reserving these funds utilises a portion of the allocated funds. These are taken on a first-come-first-served basis...'. 'The costs of moving to an alternative rate were made clear to you in advance' etc. etc.

That is totally correct.

Should I pursue my complaint to the next level, and potentially the Financial Ombudsman, on the grounds that charging the full £999 twice is just plain unfair

Apart from it being totally fair....

in no way reflected by the cost incurred by HSBC for my changing product

1 - it doesnt have to reflect the cost incurred.
2 - it does reflect the cost incurred. In many cases the fee is the only place they make any money on the mortgage. So, if they waive it, they make nothing.

am I wasting my time because I agreed to pay and it's all in their Terms and Conditions?

personally, I think they have done nothing wrong and you were aware of the costs before you decided to do the transaction. They didnt give advice to you (so no liability there) and they did make you aware of the costs (so nothing wrong there). You make an informed choice. So, i cannot see any reason why the FOS would rule in your favour.

somethingcorporate

If they were a half decent lender they would do the right thing and refund the initial fee...but sadly the world no longer works on doing the right thing but on make as much as you can at the expense of everyone else.

We just completed a remortgage with the Bank of Ireland (via the postoffice) and changed the mortgage 3 times because the rate kept dropping, even after paying the initial booking fee at the original rate. We went from 5.35% 5 year fixed to 4.75% over the course of a few weeks and all it took was a phone call.

I'd pursue it - for the sake of £1k it's certainly worth a few hours of your time firing off some complaint letters.

beecher2

Halifax allowed me to change my mind about a fixed rate I'd booked for when my deal came to an end 18 months ago. They used the booking fee I'd already paid as an overpayment - told me it wasn't something they'd normally do and I treated it as a bonus as I hadn't expected them to refund me.

luckyfool

These are the things you need to take into account when choosing lenders. If you want to be able to swop products if they get cheaper during the application process then HSBC are the wrong lender to go with I'm afraid. You are going to be wasting your time with a complaint.

prince_be

Thanks everyone for your advice. It sounds like my chances of getting anything back are slim. I'll give some thought as to whether it's worth firing another letter off on the off-chance.. :-)
Ben.