Is my complaint against FirstDirect/HSBC unreasonable?

ItsIllak

I just wanted a 3rd party opinion on this.  I had a complaint against FD which the Financial Ombudsman which has entirely found against me, but I just can't see their logic and find it very frustrating.

I applied for a mortgage with First Direct last year.  They charge a £490 fee and say the following about it in their T&C:

"our booking and arrangement fees aren’t refundable, but they can be transferred to another rate if:

• the fee’s the same

• you tell us within 6 months of paying the fee and before your new mortgage is in place

• any changes you make may need a new application" [some irrelevant terms removed for brevity]

A while after applying, the rates went down and I asked to switch.  They brought me through the full application process and put me on the lower rate.  I'd note, nothing had changed in any part of this other than the rate being lower.

Six weeks later and about 6 days before the mortgage was to be released, the rates reduced again.  I called immediately to switch and they took 5 days to respond at all.  At that point they said they could only go through the process if the mortgage was delayed.  I couldn't do that because I'd already exchanged contracts.  As a result, they refused to lower the rate.

Am I being unreasonable that their statement that the fees can be "transferred to another rate" - e.g. not a whole new mortgage - should have been honoured?  As the FO found against me, I don't suppose there's anything I can do but just wondering for my own sanity.

BonaDea

It's not clear to me what your complaint is about.  Is it that you had to pay the fee twice?  Is it that they couldn't get the new arrangement (at the point of the second rate reduction) through in a timescale that suited you?  

BarelySentientAI

I'm confused about your position.

Saying "our fees can be transferred to another rate" means "you won't need to pay the fee again if you change rate".

You seem to be reading it as "you can change deal whenever you like".  It doesn't mean anything like that at all.

ItsIllak

Sorry, to be clear.  The question is, should I have been allowed to change the rate when I asked 6 days before the mortgage was released?

BarelySentientAI

Entirely depends on the lender's processes - it's pretty close to release to be fair.  Perhaps one of the brokers here can advise?

In any case, the wording you presented earlier is irrelevant to your question.

ItsIllak

Which wording?  The quote?

So, you're saying that when they say I can "transfer to another rate", with the same fee, you don't think there should be scope to simply do that.  It should be assumed that I could re-apply to a new mortgage with the original fee being effectively refunded/repaid, but not simply have a new rate on the mortgage (which is basically what they've done - they have exactly the same product on the market but with a lower rate).

MattMattMattUK

ItsIllak said:

I just wanted a 3rd party opinion on this.  I had a complaint against FD which the Financial Ombudsman which has entirely found against me, but I just can't see their logic and find it very frustrating.

I applied for a mortgage with First Direct last year.  They charge a £490 fee and say the following about it in their T&C:

"our booking and arrangement fees aren’t refundable, but they can be transferred to another rate if:

• the fee’s the same

• you tell us within 6 months of paying the fee and before your new mortgage is in place

• any changes you make may need a new application" [some irrelevant terms removed for brevity]

A while after applying, the rates went down and I asked to switch.  They brought me through the full application process and put me on the lower rate.  I'd note, nothing had changed in any part of this other than the rate being lower.

Six weeks later and about 6 days before the mortgage was to be released, the rates reduced again.  I called immediately to switch and they took 5 days to respond at all.  At that point they said they could only go through the process if the mortgage was delayed.  I couldn't do that because I'd already exchanged contracts.  As a result, they refused to lower the rate.

Am I being unreasonable that their statement that the fees can be "transferred to another rate" - e.g. not a whole new mortgage - should have been honoured?  As the FO found against me, I don't suppose there's anything I can do but just wondering for my own sanity.

In my opinion, yes.

MWT

ItsIllak said:

So, you're saying that when they say I can "transfer to another rate", with the same fee, you don't think there should be scope to simply do that.

There was scope to do that, just not as quickly as you wanted it to happen.

Your complaint has nothing to do with the fee you paid, it seems to be about how close to drawing down the mortgage you can get a rate change.

BarelySentientAI

ItsIllak said:

Which wording?  The quote?

So, you're saying that when they say I can "transfer to another rate", with the same fee, you don't think there should be scope to simply do that.  It should be assumed that I could re-apply to a new mortgage with the original fee being effectively refunded/repaid, but not simply have a new rate on the mortgage (which is basically what they've done - they have exactly the same product on the market but with a lower rate).

Again - and I'll try to write is as clearly as I can.

That quote refers to - only refers to - whether or not you have to pay another fee if you take a new deal.

It does not, in any context, say that you are free to choose new deals at any time you like.  Had you accepted the delay and moved onto the new rate you wanted, there would have been no new fee - precisely because of that quote.

You're not being unreasonable, you've just read and understood it wrong.  It doesn't say what you think it is saying.

ItsIllak

OK, thanks all - seems like my expectations and/or reading of the offer differed from what was actually on offer.

It does mean that the assurance that was given during the initial application that I had to pay a non-refundable fee at that point, but it was portable, is less assuring than I felt it was.

Indeed, FD could simply say that their re-application process takes 6 weeks and avoid most changes to lower rates, or indeed 6 months and refuse any change at all (because you'd pass their other 6 month clause).

Anyway, letting it go - overpaid plenty already and although circumstances meant I pretty much got in at the top of the rate market, hopefully I'll reduce the impact as much as possible!

p00hsticks

ItsIllak said:

Which wording?  The quote?

So, you're saying that when they say I can "transfer to another rate", with the same fee, 

But ( at least in my view) that's not what the wording you've quoted is saying.  It's not saying that you have the automatic right to transfer to another rate, which is what seems to have been the basis for your complaint, but rather that if you do then (if certain conditions are fulfilled) you may not have to pay a second fee. 

ItsIllak said:

They charge a £490 fee and say the following about it in their T&C:

"our booking and arrangement fees aren’t refundable, but they can be transferred to another rate if:

• the fee’s the same....