How to reclaim your mortgage arrears charges
Demand a refund from your lender
Before you can take your complaint to any regulatory body or to
court you must first give your lender the chance to put things
right.
By following the simple steps below you will exhaust the
lender's complaint process and hopefully get a refund without
having to take any further legal action.
- First of all, you need to find out how much you have
incurred in mortgage arrears charges over the last six
years. Details of charges can be found on your mortgage
statements*.
By knowing exactly how much you're
owed you'll know if your lender tries to fob you off with a low
offer later on in the claim.
- Once you know how much you've been charged, you need to
write a letter to your lender asking for a
refund.
Remember to include details such as
your mortgage account number, full name and address (including any
previous addresses if the claim relates to a closed mortgage.)
- List all your penalty charges in the letter, stating the total
amount you have been charged. Then include the following
paragraphs.
"I allege that the above charges are unlawful because they
do not flow from my breach of contract (late missed payment) and do
not reflect actual costs incurred. In other words they are
penalty fees not actual losses.
I request strict proof that the above losses were actually
incurred by you and request that these are evidenced in writing
explaining exactly how much time was spent before each fee was
incurred and what steps were taken by you to mitigate such
losses.
Alternatively, I invite you to make an offer in satisfaction
of this dispute on a 'without prejudice' basis
Should I not receive your reasonable offer within 14 days I
will refer my complaint to the Financial Services Ombudsman who
will investigate the matter fully and fairly.
Clearly the above will incur a significant cost to you and I
therefore trust that you will take a fair and commercial view and
respond accordingly."
- *If you do not know exactly how much you've been charged then
include the following paragraph in your letter to the lender:
"Please provide a clear statement of all default charges
that have been applied to my account in the last 6 years, or since
the opening of this account, whichever is earlier, whether as a
result of unpaid direct debits and arrears fees and
associated charges."
- If your lender's response is unsatisfactory, i.e. they make an
insultingly low offer or reject your claim outright, or if they do
not respond at all, then write to them again
(including your previous correspondence) and explain that unless
they resolve the matter you will consider their complaints process
exhausted and will therefore forward the case on to the Financial
Ombudsman Service (FOS) or to the county court.
It is sadly quite normal for companies not to even read customer
complaints. This is a practice the financial regulators are trying
to stamp out and several companies have already been fined for not
reviewing complaints properly. So if your claim is rejected
do not give up, and make sure that they review
your case on its own merits.
- If after this the lender still does not make a satisfactory
offer, of if they have not responded at all and it's been 8 weeks
since you first contacted them, then you may take your claim
further. Please go the next section of the guide to see how to
escalate your complaint.
Taking
your mortgage arrears charges claim further
Claims Financial