Mortgage arrears fees criticised
The Financial Services Authority (FSA) should fine lenders that are treating mortgage customers in arrears unfairly, according to Which?.Jon Pain, FSA managing director of retail markets, told a parliamentary committee last week that the regulator was investigating lenders who have mishandled arrears, but would not name them.
"Our enforcement action is very decisive and we will take that action through to its conclusion but quite frankly until the full enforcement process is complete it would be rather unjust to say they are guilty before they are proven guilty," he said.
Consumer watchdog Which? has now added its criticism to the FSA approach.
The organisation's personal finance campaigner, Dominic Lindley, told BBC Radio 4's Money Box programme: "The FSA should realise that a quiet-word-in-your-ear kind of regulation isn't working and lenders will only treat customers fairly when they see very high fines."
Which? research has shown that a number of lenders charge customers various fees when they are in arrears.
Mr Lindley told the broadcaster that new rules should be created to suspend charges for customers who have entered into an agreement to pay off arrears.
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