Mortgage fees heading same way as bank fees
Over the past few months banks in the UK have been facing huge financial losses over the scandal involving bank charges, where customers have been charged up to forty pounds for each fee for going over the overdraft limit or for returned cheques and direct debits. Because these fees do not reflect the actual administrative fee incurred by the bank many consumers have been able to claim back fees going back up to six years, which has seen the banks paying out hundreds and even thousands to each customer that makes a claim.
And following advice from the Financial Ombudsman Service it seems that banks may be heading for even more trouble over extortionate fees that are being applied on the accounts of those that miss repayments on their mortgage. Banks and mortgage lenders have been applying fees on average of between £35 and £180 on the accounts of customers that miss repayments based on the action that they have to take. The lowest fee is that for non payment. If the customer continues to default on payments and a debt collector is called in the fee rises. And if the banks have to get solicitors involved the fee is even higher.
According to the Financial Ombudsman Service there are more and more complaints flooding in with regards to the fees that customers are being charged by their mortgage companies, which are supposed to reflect the cost incurred by the lender, but in many cases clearly do not. For instance, Lloyds TSB charges around £200 if solicitors have to get involved in such a case. If this does become a major campaign, as with the bank charges issue, banks stand to lose millions more as a result of having to refund customers that claim for a refund on the fees applied to their mortgage account.
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