View more on these topics

FCA orders Kensington to change ‘unfair’ mortgage terms

The FCA has ordered mortgage lender Kensington Mortgages to change a number of policy terms affecting 7,000 Money Partners customers over concerns they were unfair.

In a notice of undertaking published last week, the FCA says terms in Kensington’s 2004 Money Partners mortgage conditions booklet provided the lender with too much discretion.

The terms allowed Kensington to demand full repayment of the outstanding mortgage immediately if there was failure to pay a single monthly payment, or if there was a change in customers’ circumstances.

Money Partners was established in November 2004 as a joint venture with Kensington, and was sold by Kensington to Goldman Sachs in January 2008.

Mortgages completed by Money Partners were assigned to Kensington.

Kensington stopped applying the 2004 conditions to any new customers from 2007, and has agreed to apply its new terms to all existing customers.

Money Partners suspended new lending in February 2009.

The new terms state that Kensington may demand repayment of the debt if the customer has failed to make two monthly payments or more.

The FCA also says two of the terms were not in plain language, including an explanation of what would happen if one of a pair of joint borrowers died.

A spokesman for Kensington says: “We have agreed with the FCA to change a number of terms in the booklet to make them fairer and clearer for customers.

“The terms that have been changed were never imposed by Kensington.”

London & Country sales director Michael Aldridge says: “Lenders must be sympathetic to changes in borrowers’ circumstances, particularly when relating to factors outside of their control.”


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm