Nelson asked:
Question posted courtesy of: Umpires
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on Tuesday, January 15th, 2008 at 3:57 am and is filed under Mortgage News.
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January 16th, 2008 at 9:00 am
The recent claims have been against punitive charges. Banks are entitled to charge you additional interest for late payments, and enough to cover their costs - but they mustn’t profit from these charges.
If you think it really cost £35 to process your 1 day late payment then you have no case - if however you think they’ve stuck you for £35 quid, just for the hell of it, then you probably can claim it back.
January 16th, 2008 at 11:46 pm
It is their rule means we can’t change that
January 17th, 2008 at 9:56 pm
hi know claiming back refers to credit cards, banks and catalogues not sure if it includes mortgages but i’m sure you could get away with reclaiming as they (above) should only charge what it cost them to cover the costs, send payment thru, letters etc.
i’ve included a link that has templates and a forum where you may be able to get more help
im sure its just a matter of improvising and dont forget to let them know you expect any defaults/ non payments strikes on your credit report to be removed within 14 days as well as the money or you’ll take legal action and expect interest at statutory rate of 8% on top and any other cost particularly legal that you incur.
January 20th, 2008 at 9:22 pm
Hi.
In April 2006 the Office of Fair Trading (OFT) published a paper called ‘Calculating fair default charges in credit card contracts’, and although the paper was specifically concerned with credit card defaults it did have a number of recommendations for other financial services, including overdrafts.
The paper did not make any specific recommendations about the administration of defaults on mortgage accounts, however the OFT did ask lenders to look at their default charges to consider whether the charges were fair and reasonable.
Your mortgage lender is entitled to cover its reasonable costs in dealing with the situation, and to pass these costs onto you. These costs include stationery, IT equipment, suitably trained staff, and most importantly the time and work involved in dealing with the account in default.
You can try claiming the charges back if you wish, and if you chose to pursue this you may be able to cite the OFT paper which suggested that a fair charge for credit card defaults would be £12; however, a mortgage account is very different to a credit card account, and the administration involved is usually more significant and more costly to your lender.
In this regard, I suspect your lender will state that £35 is considered to be a reasonable fee for handling the account in default, and that you are not entitled to any refund.
You should also note that you are not entitled to have any defaults struck off your credit record, as another answerer has suggested.
If you do complaint, the firm is required to issue a ‘final response’ to your complaint within 8 weeks, and must write to you within 4 weeks to tell you how their investigation is going and when they expect to issue the final response.
If you remain unhappy with their response, you can pursue your complaint via the Financial Ombudsman Service (www.financial-ombudsman.org), which is free for you but costs the firm £360.
I suspect however that the complaint will not be successful, even if you pursue it via the FOS, unless you can demonstrate that your lenders acted unfairly in applying the £35 fees for missed payments.
I hope this helps and am sorry that my perspective wasn’t too optimistic! If you need any further information please let me know.