Remortgage Process & "Fair Treatment of Customers"

TheRaz

Help please on a remortgage that I have recently completed which resulted in my mortgage being switched to a lenders SVR for a month.

To get a long story short, the issue I have taken up with the lender and the Ombudsman is that at no time during the remortgage process was I made aware that there was a processing time that needed to be factored in to the switch from one fixed product to another - even though there were no changes to the mortgage and it was with the same lender.

Some of the detail is the existing mortgage was due to revert to the lenders SVR on the 1/10/15, I had received sufficient notification from the lender of this. Wanting to make sure that I was able to get the most competitive rate I researched the market and eventually decided that it was best to stay with the existing lender so submitted on the phone my application - at which time I was told I had missed the cut off for the application to be processed in time for the 1/10/15 but would be completed in time for the next month (which it was). However this meant that 1 month of SVR (on a significant amount for which I am seeking a refund on the difference between the SVR and the new discounted rate).

I have researched the FCAs code of business and principles and found a lot of rules and regulations and there is nothing that specifically states that a lender need make me aware of a processing time or cut off date. There is however a lot about the Fair Treatment of Customers. Which I have taken up with the lender and the Ombudsman who have rejected my claim on the grounds of it is reasonable that the lender needn't make me aware of an cut off date and that there is a reasonable period of time to process the application.

In my telephone conversation with the adjudicator when I asked what was a reasonable time for processing I was told a week in this instance - my application was submitted 8 days earlier. Nonetheless this had made no difference and the question of what is reasonable remains on both fronts.

I was wondering if anyone has heard of or experienced this and how "reasonable" is judged? I would very much appreciate any advice or direction.

The complaint is now being refereed to the Ombudsman.

betmunch

This is an interesting case, I can't see you winning but would like to know how it goes.

With regards to the TCF I understand what you are saying but my belief is that it's aimed at everyone being treated the same and getting accurate information.

If you had evidence someone had applied on the same day or after you, and they got their product transfer on time then you would not have been treated fairly.

They also told you that you had missed the cut off to get the deal on the date you wanted, this is also considered treating you fairly

You also state you received sufficient notice from the lender before you reviewed the market and made the decision. How long did your review take?

It does seem to me that your own delays in the research have caused you to miss the deadline to submit the application.

Sorry it's not what you wanted to hear

dunstonh

I have researched the FCAs code of business and principles and found a lot of rules and regulations and there is nothing that specifically states that a lender need make me aware of a processing time or cut off date.

That is because there isn't one. Common sense dictates that there will be a processing time and a point where it is too late to catch the expiry of the existing product.

For example, you did it on the phone. They need to send you the contract, you sign and return it. They then need to process it and carry out a number of checks. They also need 10 days under direct debit rules to give you notification of the change of amount.

There is however a lot about the Fair Treatment of Customers. Which I have taken up with the lender and the Ombudsman who have rejected my claim on the grounds of it is reasonable that the lender needn't make me aware of an cut off date and that there is a reasonable period of time to process the application.

Fair treatment does not require the firm to comply with unreasonable requests. Your complaint appears frivolous.

Importantly, you were told explicitly on the phone at the point of application that you had missed the cut off to be processed in time but it should be fine for the next month. You acknowledge this and confirm that is exactly what happened. So, they told you correctly and the outcome was exactly what you were told. You also confirm that you were notified of the expiry in advance.

Where its the wrongdoing? it appears the delay was you. Not them.

The complaint is now being refereed to the Ombudsman.

They only overrule around 11% of complaints and I cant see them changing the decision on this one.

Mortgages are paid in advance. You may well find that the mortgage changed over mid month so its only x number of weeks that you were on the SVR. The fact the payment was higher doesn't matter in that case as the interest would be x weeks at SVR and then y weeks at the new rate. Any difference would be offset against the capital.

ACG

Betmunch hits the nail on the head with TCF. It is all about fairness but that does mean banks having to say yes to every request. It means everyone is treated equally.

With regards to switching the products, it is not an instant process. The bank still needs to do their checks. The reason for that is if you were to tie in to a 2 year fixed rate for example but you could not afford it, ok your payments are lower but if the house were to be repossessed you end up paying early repayment charges, so it would cost you more.

How much extra has this actually cost you in pounds and pence? How much time has it taken you to write a complaint to the lender and then the ombudsman?

The other thing is that when you make a complaint, the ombudsman will charge the bank £500 (or at least it used to be when I worked for a bank) to investigate it. If the bank genuinely thought you had a case they would have given you the money back as it would cost them less (presumably) than a complaint to the FoS.

TheRaz

Thank you all for your honest and frank comments – of course not what I want to hear, but it’s real! – In terms of £p the difference is £2k (yes unfortunately a large mortgage), I realise the amount makes no difference to the interpretation.
I am still unclear about how it can considered reasonable and fair when one of the codes demands that “where consumers receive advice, the advice is suitable and takes account of their circumstances” .
The scenario here is the lender was aware of the entire picture ie their processes / compliance reqts etc and my requirement / details etc. I on the other hand was only aware of my circumstances – they are the experts with the full picture, I am not an expert in this and only half a picture.
So I cannot understand how the requirement to offer advice accounting for my circumstance satisfied in this instance?

TheRaz

...sorry meant to say also that yes of course I took the view to research the market and had I known of any need to allow for a "period" to process the application I would of course have complied. Without this knowledge and believing that since it was switching to another product with the same lender with no difference to the mortgage I believed it was reasonable that a week was more than sufficient notice. This of course begs the question who or what decides is or is not reasonable?

betmunch

In this case the provider decides what is reasonable. As I said, as long as their view of what is reasonable is applied across the board then its fair too.




The lender isn't aware of the whole picture, they are aware of their side of it, by your own admission they wrote to you with sufficient time for you to change the product so you have agreed that whatever their unknown timescale was it was sufficient.


Please keep this thread updated if the FOS are involve, but cant see them ruling in your favour.

dunstonh

I am still unclear about how it can considered reasonable and fair when one of the codes demands that “where consumers receive advice, the advice is suitable and takes account of their circumstances” .

It doesnt sound like you used an adviser. You used a call centre as you mentioned it was done on the phone. Plus, it was a change of deal. Not a new mortgage or change in amount/term. So, the rules are different.

...sorry meant to say also that yes of course I took the view to research the market and had I known of any need to allow for a "period" to process the application I would of course have complied. Without this knowledge and believing that since it was switching to another product with the same lender with no difference to the mortgage I believed it was reasonable that a week was more than sufficient notice. This of course begs the question who or what decides is or is not reasonable?

They are not responsible for your incorrect assumptions.

Out of interest please provide the following (as it is what the FOS and their complaints team would look at):
Date of call
Date you received the forms
Date you posted the forms back
Date they changed the mortgage to the new terms.

The other thing is that when you make a complaint, the ombudsman will charge the bank £500 (or at least it used to be when I worked for a bank) to investigate it.

It is £500 but the firm can apply to have the charge waived if they believe it is a frivolous complaint. This is borderline frivolous.

TheRaz

dunstonh wrote: »

It doesnt sound like you used an adviser. You used a call centre as you mentioned it was done on the phone. Plus, it was a change of deal. Not a new mortgage or change in amount/term. So, the rules are different.

They are not responsible for your incorrect assumptions.

Out of interest please provide the following (as it is what the FOS and their complaints team would look at):
Date of call - There were several calls. The first of which I made even before the letter.
Date you received the forms - Fri 2nd Oct 15
Date you posted the forms back - Sat 3rd Oct 15
Date they changed the mortgage to the new terms. - 15th Oct 15

It is £500 but the firm can apply to have the charge waived if they believe it is a frivolous complaint. This is borderline frivolous.

Your point about my assumptions strikes a chord as I guess this is the nub of it and where I have issue - my assumption was that I am talking to the experts (as in Lender) and therefore of the view that they will help / guide / support me. As you say different rules, unless I become an expert how am I to know?

I made 2 - 4 calls to them and on at least 2 occasions spoke to an advisor. On the first occasion we spoke about needing to go through an assessment and that it would take about 30+ mins - being short on time, I asked if we could reschedule for another day? Would that not be a cue to say there is a deadline by which it needs to be done to meet the end of the month change over?

Unfortunately the amount is important enough for me to invest the time and effort.

dunstonh

Your point about my assumptions strikes a chord as I guess this is the nub of it and where I have issue - my assumption was that I am talking to the experts (as in Lender) and therefore of the view that they will help / guide / support me. As you say different rules, unless I become an expert how am I to know?

An adviser will advise. A clerk will take instructions and give basic info. It sounds like you spoke with a clerk and not an adviser. However, an adviser won't know what you do not know unless you tell them you do not know or they can ascertain you don't know.

I made 2 - 4 calls to them and on at least 2 occasions spoke to an advisor.

adviser or clerk? Was the person you spoke to the person that would do the assessment or would they put you through to the person that would do it?

There is a regulatory distinction between adviser and clerk. Despite many people thinking that anyone they speak to on the phone or in the branch is an adviser. Most are just clerks even if they have customer services adviser or some other title that the banks love giving their staff to make them sound more important than they are.

I made 2 - 4 calls to them and on at least 2 occasions spoke to an advisor. On the first occasion we spoke about needing to go through an assessment and that it would take about 30+ mins - being short on time, I asked if we could reschedule for another day? Would that not be a cue to say there is a deadline by which it needs to be done to meet the end of the month change over?

Was the person you spoke to the person that would do the assessment or would they put you through to the person that would do it? A clerk taking calls but not doing the work would not know the requirements.

At the time of that call, had you stated you had a deadline? They wouldnt know you had imposed a deadline unless you told them. Remember your mortgage does not expire on the date the deal ends. So, nothing time sensitive in their eyes. And again, it was you that delayed it. Not them.

nfortunately the amount is important enough for me to invest the time and effort.

For future reference, most people start their planning on these things about 3 months before the deal is due to end.

Khrisjun

Hi TheRaz,

I can not offer advise on the specifics of what you have asked, however i'm intrigued by the two rates you have mentioned managing to equate to £2k in cost for one month,

If the SVR was for example 5% and you new rate was 1% you would need a mortgage of 600k to get this variance, is this anything like your situation?