Mortgage Exit Fees successes and failures

dunstonh

Asking for your money back is not "stealing" due to the fact that the company concerned can refuse to hand it back.

Correct. However, you would have noticed that some on this thread go on to threaten going to the FOS if they dont get their money back in full. This threat is blackmail. This is because if the company refuse to refund that extra £50-£150 and the person goes to the FOS, the lender then has to pay £450 to the FOS even if the complaint is rejected in their favour.

It is very unfair that complaints which are not upheld still see the defendent having to pay £450 a go. It is something that is under consideration at the moment because of the increasing number of "try it on" complaints and whilst the FOS are against change, there are calls to remove the charge on failed cases and even charge the consumer for making complaints which do not get upheld. Whilst I dont see that as being likely, one option being considered is a pre-vetting of complaints to filter out more spurious ones before they get passed for full consideration.

Noz

Steve_xx wrote: »

Asking for your money back is not "stealing" due to the fact that the company concerned can refuse to hand it back.

I take your point regarding the pricing of mortgage products and that they can be made up of several elements. I understood that point before you made it. However, where mortgage exit fees are concerned there is a raft of opposition to it by customers. This fact ought to tell the banks that they are getting it wrong somehow and that as such they might like to look at the structure of their charges. The banks have cleverly marketed these products in such a way as the headline repayment rate looks less than it actually is. Many would argue that their modus operandi in this respect is tantamount to deception.

Steve_xx, you are aware that many lenders no longer include exit fees anymore on new mortgages?

Steve_xx

dunstonh wrote: »

Correct. However, you would have noticed that some on this thread go on to threaten going to the FOS if they dont get their money back in full. This threat is blackmail. This is because if the company refuse to refund that extra £50-£150 and the person goes to the FOS, the lender then has to pay £450 to the FOS even if the complaint is rejected in their favour.

It is very unfair that complaints which are not upheld still see the defendent having to pay £450 a go. It is something that is under consideration at the moment because of the increasing number of "try it on" complaints and whilst the FOS are against change, there are calls to remove the charge on failed cases and even charge the consumer for making complaints which do not get upheld. Whilst I dont see that as being likely, one option being considered is a pre-vetting of complaints to filter out more spurious ones before they get passed for full consideration.

It is neither stealing nor is it blackmail. Most who make a complaint will not be aware of the £450 charge that you have mentioned and even if they were aware it should not preclude them from complaining where they feel that they have been duped. If the effect if these complaints cause the banks to stop setting exit fees then in my view and the view of many others it will be a job well done. You may well argue that that loss will be loaded elsewhere, like on the interest rate, and for most this will be perfectly acceptable as opposed to having a raft of hidden type charges that catch people out unexpectedly.

If a customer feels that they have been treated unfairly and they go to the FOS and are subsequently awarded favourably, then the customers complaint was valid.

Steve_xx

Noz wrote: »

Steve_xx, you are aware that many lenders no longer include exit fees anymore on new mortgages?

I didn't know that. Perhaps the lenders are learning from their customers! I think that this is welcome news.

_Andy_

Steve_xx wrote: »

I..where they feel that they have been duped.

How can someone feel 'duped' when they were told before the mortgage started what the fee was?

having a raft of hidden type charges that catch people out unexpectedly.

All fees are disclosed on the KFI, I don't see how they can be described as 'hidden'.

Steve_xx

_Andy_ wrote: »

How can someone feel 'duped' when they were told before the mortgage started what the fee was?

All fees are disclosed on the KFI, I don't see how they can be described as 'hidden'.

That's your opinion and you're entitled to it. However, others don't share that opinion and they feel that they have been duped.

Noz

Steve_xx wrote: »

I didn't know that. Perhaps the lenders are learning from their customers! I think that this is welcome news.

It's been that way for sometime now, many lender dropped the fees shortly after the FSA ruling.

I daresay as a way of keeping the number of complaints down as well in the future.

Cannygirl_2

Inspired by all these tales of success I've just rung C +G to claim back my "Closing admin charge"...over £200. The girl got me to hold on and then came back to flatly deny that I was eligible because I would have agreed to some sort of charge( amount never set out) on the original application and loan agreement forms. On the former, there is an agreement that I've read the mortgage section of their website...but that was in 2003 and how do I know what was said then?
I will complain in writing, as MSE Martin advises. Anyone else had any luck with C+G?

MarkyMarkD

Steve_xx wrote: »

Asking for your money back is not "stealing" due to the fact that the company concerned can refuse to hand it back.

I take your point regarding the pricing of mortgage products and that they can be made up of several elements. I understood that point before you made it. However, where mortgage exit fees are concerned there is a raft of opposition to it by customers. This fact ought to tell the banks that they are getting it wrong somehow and that as such they might like to look at the structure of their charges. The banks have cleverly marketed these products in such a way as the headline repayment rate looks less than it actually is. Many would argue that their modus operandi in this respect is tantamount to deception.

No, no, and no.

To claim that it is fairer for a lender to charge £894 up front, 5.75% for 2 years and then £0 to exit, than for them to charge £599 up front, 5.75% for 2 years and then £295 to exit is simply illogical.

The second method rewards customer loyalty, as the £295 is not charged by borrowers who stay with the lender.

The first method rewards nothing at all.

In both cases, the total cost of the mortgage will be disclosed entirely clearly up-front, as all the fees referred to will be on the KFI. Both mortgages will have the same total amount payable over their full term. But the second is actually better value.

Under your logic, all lenders should adopt the first approach and customers who choose to stay with the lender for longer should get no benefit at all. That is daft, IMHO.

MarkyMarkD

Steve_xx wrote: »

It is neither stealing nor is it blackmail. Most who make a complaint will not be aware of the £450 charge that you have mentioned and even if they were aware it should not preclude them from complaining where they feel that they have been duped. If the effect if these complaints cause the banks to stop setting exit fees then in my view and the view of many others it will be a job well done. You may well argue that that loss will be loaded elsewhere, like on the interest rate, and for most this will be perfectly acceptable as opposed to having a raft of hidden type charges that catch people out unexpectedly.

If a customer feels that they have been treated unfairly and they go to the FOS and are subsequently awarded favourably, then the customers complaint was valid.

Not a single complaint of the type you are referring to will be upheld by FOS, because the claims are invalid. It is only because of FOS's ridiculous charging system that lenders pay out in these cases.

Unfortunately, the review of the FOS's charging structure to which Dunstonh refers is complete and FOS have ruled out changing the system to a more logical one whereby "innocent" companies will pay nothing. But they already pre-sift complaints and they are unlikely to progress a spurious MEAF claim or charge the lender involved.

That said, lenders pay up because they don't want to go through the administrative hassle of a claim going through FOS.