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Complaints watchdog sides with FCA over mortgage misselling case

Real estate offer. Businessman holds an artificial model of the houseThe FCA has successfully defended a complaint against it after a customer alleged it had ignored interest-only mortgage misselling accusations.

The complainant said they had tried to contact the FCA on multiple occasions, but the regulator had failed to properly consider the information given to it.

The complainant alleges that a mortgage broker submitted false information in order to approve their application, and that the FCA needs to take action to avoid a potential repossession of their home.

The FCA did not uphold that complaint, arguing that it had responded promptly to concerns, and that it was outside of its remit to influence the claims management companies involved in the case, over which the complainant also expressed dissatisfaction.

The FCA said complaints about any potential misselling should be directed to the Financial Ombudsman Service. The broker firm has since become defunct.

The complainant decided to take the matter to the Complaints Commissioner. In the adjudicator’s judgment, published today, it rules that while the FCA could have also emailed correspondence to the individual, it did make appropriate efforts to send timely response letters.

The Complaints Commissioner also notes that it was not the FCA’s role to investigate the complaint against the broker or CMC involved.

The adjudicator writes: “It is clear that you are in a difficult situation with your mortgage, and that you have made considerable efforts, involving a number of organisations and solicitors, in trying to sort matters out. I sympathise with the position in which you find yourself.

“I am sorry that you are disappointed but, as I have said earlier, it is not the FCA’s role to deal with individual complaints against financial services organisations, nor to regulate CMCs – the FCA was right to direct you to the FOS and the Ministry of Justice. I realise that it is frustrating to be told to go to other organisations, but the FCA’s advice was correct.”



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Neil Liversidge 1st March 2018 at 12:20 pm

    Loads of people took out interest-only mortgages 10+ years ago, and as the interest rates they were paying fell away, what did they do? We had some such mortgagors contact us a couple of years back after one of my BBC Radio Leeds spots. Normally I’m just asked for down-the-line comment but these insisted on bringing all the paperwork to our office. They were intelligent, educated people with high-flying jobs. They lived in what is, property price-wise, the highest-value lane of the next village to ours. It’s a street where pretty much everyone is obsessed with keeping up with the Joneses. Most of the houses are barely visible from the road, so long are the driveways and so crowded are they with motorhomes, boats, Mercs, Jags, Beemers and other automotive exotica. Their mortgage had been arranged for them by a lady at a perfectly respectable firm who had gone on, we found via the FCA register, to work for a bank. We reviewed her advice and it was perfect, all warnings duly given, including one re’ the need to repay the principal. When they came to us the repayments were a fraction of the original value. Had they done nothing else except what I call “a DIY Repayment mortgage” by keeping payments at the same level and thus repaying the principal they would have been in a very good position. Had they done that? No. It had all gone on nice cars, extra holidays, etc. And now they were looking at hitting the buffers wanted to blame it on their mortgage adviser. We told them they had no case. The news was not well received. They said they’d go find a CMC to take the case for them. I’m sure they did. I hope the FOS wises up to the fact that such people are the architects of their own misfortune. This culture of blaming others for one’s own profligacy has to stop. All too often though it seems encouraged by adjudicators who are at best gullible, and at worst downright determined to buy popularity with consumers using innocent advisors’ money.

  2. This is very strange. Part 3 of the complaint states;

    “You explained that the mortgage broker submitted false information in order to get your mortgage application approved. You explain that the FCA still needs to resolve the fact that you will potentially lose your home in three years.”

    The FCA responded by saying ‘The FCA also told you that part 3 was excluded from the Scheme, because it was the role of the Financial Ombudsman Service (FOS), not the FCA, to deal with individual complaints against firms.

    Whilst it doesn’t say what the ‘false information’ was, where there is an accusation of fraud, (submitting false information to support a mortgage application is fraud), how can the FCA say this nothing to do with them and not even investigate?

    Why was this not passed to the whistleblowing team?

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