Complaints over mortgage charges soar
A recent report has shown that over the past twelve months the level of consumer complaints relating to mortgage costs and charges have soared, reflecting the improvement that lenders need to make to their services.
Over the past year there has been a significant rise in complaints relating to cost and charge issues, and this includes administration charges, exit fees, charges on arrears, and broker charges for setting up or arranging a mortgage for a consumer.
The study was conducted by Vertex Financial Services with the Council of Mortgage Lenders. According to the result of the study the past year has seen complaints relating to 'sums and amounts' more than double. In addition to this there has been a 300% rise in complaints relating to overcharging, which is an all time high. Earlier this year the Financial Ombudsman Service also released data that showed that there had been an increase of 11% in mortgage related complaints, most of which were about costs and charges.
An official from Vertex stated: 'With three interest rate rises already over the past year it is perhaps not surprising that over-charging complaints have risen so dramatically but service levels must improve to ensure that this is kept in check. Given the impact of the credit crunch, next year's survey is likely to see many more lenders with higher arrears, repossessions and debt collection problems."
He added: 'Productivity and efficiency are both showing slight improvements overall, suggesting that progress is now being made as lenders absorb regulatory costs, but it will take time.' An spokesman for the Council of Mortgage Lenders added: 'In this very challenging environment, it is even more important for lenders to understand their cost base and to ensure they operate a tight ship if they are to ensure effective resource allocation.'