Mortgage Exit Fees successes and failures

MarkyMarkD

freestyleskier wrote: »

The FSA's emphasis wasn't on the word "if" it was on the words "in fact". There is no requirement that the mortgage terms and conditions explicity state that the MEAF "represents the cost of their services". It is sufficient to show that the MEAF is there to allow the lender to recover the cost of the administration services. When lenders call fees by names such as "Deeds Handling Fee", "Redemption Discharge Fee" etc. it is clear that the purpose of these fees is to cover the costs of handling the deeds, discharging the mortgage security at redemption etc.

The FSA didn't emphasise either of the terms.

There is no general presumption in law that the name of a term implies that it represents the cost to the supplier of providing that service. Indeed, there is a general (in fact, common sense) presumption that the charges levied by suppliers for most services is intended to cover their costs and generate a profit. There's no reason why mortgage lenders are supposed to operate on a break-even basis in regard to any aspect of their charges.

The only exception is that if a fee is a penalty for breach of contract, it is not supposed to exceed the damages which would be awarded for breach of contract which means the cost to the supplier of that breach.

As you will already be aware, I don't accept that an MEAF is a penalty for breach of contract.

freestyleskier wrote: »

On the subject of "core terms" the FSA do not express an opinion either way. They leave that to be determined in court. I quote section 2.10 "This Statement does not deal with the issue of whether MEAF terms are 'core terms'". Specifically, the FSA are not saying "that's perfectly OK".

I suspect that the "core term" discussion is somewhat esoteric for most readers of this forum. You haven't answered the question of whether it is wrong for a supplier to specify a known fee of (say) £250 and whether it is wrong for the customer to expect to pay that, given that it is a known fee and not a penalty.

freestyleskier wrote: »

In section 4 Going Forward the FSA gave lenders 5 options to choose from by the end of February 2007. They merely stated that they were unlikely to investigate lenders who chose option (i)-(iii), but that they were likely to proactively investigate lenders who chose options (iv) or (v). These are referring to FSA investigations rather than FOS rulings on individual complaints and the 2 are quite different. A FOS assessment of a complaint would determine whether the (say) £250 should be refunded. An FSA investigation would determine whether the lender should be forced to change its fees, should be fined (say) £1,000,000 for abusing customers, or ultimately if it should be allowed to continue trading.

If a complaint is made to either the Court or FOS about a MEAF then that body will have to rule on whether it is fair or unfair from a legal point of view. I personally have a complaint with the FOS on this and am arguing that the MEAF is a penalty charge in exactly the same way that many other bank charges are.

MEAFs have existed for very many years and there hasn't been a single published FOS ruling stating that they are unlawful/unenforceable/unfair, not even prior to the FSA ruling. I don't believe for a moment that FOS will support your claim - they are not in the business of making FSA look silly. If there was a general consensus that your view was correct, FSA would have included it in their guidance. They did not.

freestyleskier wrote: »

You imply that because a MEAF (or any other contract term) is stated upfront then it is automatically fair. If this were the case then there would be no need for the Unfair Contract Terms Act or Unfair Terms in Consumer Contracts Regulations. The reality is that there is a great potential for Consumer Contracts to have unfair terms despite these being stated upfront.

I didn't imply that ANY term specified up front was fair. But I did state that I think UTCCR is a poorly designed piece of legislation, and that it's being used for things it was not intended for.

There is a severe difference between a term in a consumer contract which is hidden away and which is intended to trap the unwary if they do something out of the ordinary, and a MEAF which is specified up front in standard sized print within the KFI, and even before that was included within the statutory APR calculation disclosed on every mortgage advertisement, and which is levied on virtually every mortgage customer. Anyone who took out a mortgage since Mortgage Regulation without being aware what their MEAF would be on redemption deserves no sympathy from anyone and isn't going to get it from the courts IMHO. UTCCR relates to terms which are not clear up front, not to terms which ARE clear and where there is no ability for the lender to change the amount of the charge (as is now the case, following the FSA guidance).

freestyleskier wrote: »

I didn't watch the Tonight programme, however I did talk to the producer Gregor Stewart and also to Martin Lewis prior to this. Whilst they have not been publicly advocating reclaiming the full amount, I am sure that this stance would immediately change in the event of a successful claim.

Martin and Tonight both have the ability to change the way consumers behave. If they wanted to encourage this sort of approach, they would have done so.

But, I suppose that what you are saying, is that they don't want to encourage people to waste their time on something which is unlikely to succeed. Rather the same as my own position.

freestyleskier wrote: »

As I said at the begining of this post, people should determine their own prefered course of action by deciding whether they agree more with MarkyMarkD's arguments or my own.

Indeed. Make up your own mind.

Did you know you were expected to pay (say) £250? If so, you should obviously, both legally and morally, pay £250.

Or if you take freestyle's approach, even though you knew you were expected to pay £250, you should pretend it's unfair and moan about it. If you're lucky, your lender will pay you money you aren't due, just to get you to stop wasting their time.

MarkyMarkD

ellie2703j wrote: »

I rang Intelligent finance asking for a refund on the £140 exit fee charge from May o5. They stated that they were allowed to charge this as the maximum the FSA was allowing was £140 since 2002 and they have never gone over this. Therefore I wasnt entitled to any refund.
Is this correct?

I suspect that what they mean is that they set their MEAF at £140 in 2002 and haven't changed it since, so if your mortgage started in 2002 or later you are due to pay £140.

candygirl

I have had my mortage with the Halifax(crazy i know) since 1986, and in that time have only added to it in 2003, then changed to a repayment only mortgage last year when i cashed in my endowment.Am I likely to be up for any refunds.I have tried to read through some of the posts on here, but am still not sure if i will be eligible for a refund.

MSE_Martin

Please Remember This Is A Successes And Failures Reporting Thread. The Discussion Thread Is Seperate.

candygirl

MSE_Martin wrote: »

Please Remember This Is A Successes And Failures Reporting Thread. The Discussion Thread Is Seperate.

ooh sorry Martin.I'll look for it now:o

Louise1521

Just called RBS, the lady I spoke to was very friendly. She checked the system, it appears that they charged us the correct amount of £75, so no refund due to us. Worth trying though.

purplechick

phoned c&g,after a few questions,( i kept paperwork from 5 years ago),i have been told that i will get a cheque for £70.00 soon,it was a 15 minute phonecall!!thanks!

lordavmic

:beer: cheers martin after a phone call to halifax they are sending me a cheque for £35 within 28 days and another call to royal bank scotland they are refunding £125 to my bank account within 3-5 days total refund £160,thanks again martin they should give you a knighthood :A

smreynard

has anyone managed to get a refund from Bank of Scotland (not Royal Bank of Scotland) even after the template letter they are refusing to refund anything!

SNTY

Rang GMAC and Redstone (Amber) for refunds

Both have refused saying that those are the right amounts.
GMAC said they charged £115 which included a sealing fee. (In 2003)
Redstone said £125 was the right amount. (In 2005)

Both said this rebate only applies to recent mortgages.

As they are both fairly recent I cant understand this.

Intend to call them both back later.

Any tips please.

Thanks,

SNTY