£15,000 Cashback From Your Mortgage Lender!

Financial companies are breaking the law left, right and centre. This time it's mortgage lenders. Here's an overview of four ways they rip you off and some pointers on getting your money back.

I've written more than my fair share of articles on making claims against financial institutions this year. Some Fools think all charges, such as late-payment fees, are justified, arguing that individuals should be more responsible. I have no opinion on that. All that concerns me is the law, and making sure that everyone is treated fairly under the law.

With this in mind, I'll turn my attention to another kind of financial institution that treats customers unfairly and, indeed, unlawfully. I'm talking about mortgage lenders. If you have paid too much in charges, or lost out due to mis-selling, you have a claim against your provider.

When it comes to claims of less than £5,000 in particular, the legal system is geared to help out the little guy: low costs, online claim forms, and informal hearings round a table. You don't even need a solicitor. If this doesn't sound like too much for you to handle, you may want to consider the various ways that mortgage companies rip you off, and look into how to make your claim.

Mortgage endowment claims

The Financial Services Consumer Panel (FSCP) reminded us recently that there are still an awful lot of mortgage endowment mis-selling claims and potential claims. This is old ground, but my concern here is that the FSCP said that two out of three successful claimants who had used an endowment claims company thought they received value for money.

Thing is, I'm very dubious about these services. They typically charge 20-30% of claims recovered, which is extortionate for what can often be a very simple process.

Mortgage late-payment fees

It is unlawful for companies to penalise people for breach of contract if they are in standard, pre-written contracts. This means that, just as is the case for credit card charges, hefty late-payment fees in mortgages are unlawful under the Unfair Terms in Consumer Contracts Regulations 1999. If you often struggle to pay on time then these charges can add up.

Mortgage exit fees

Mortgage companies put in their contracts that they'll charge you for the administration of closing or transferring your mortgage. However, in the past five years these fees have tripled, and in many cases they've quintupled! Just like your bank and card charges, these are unlawful under the Unfair Terms in Consumer Contracts Regulations 1999. You can make a claim in the same way. In fact, my mother-lawyer is in the process of doing this right now.

Mortgage early redemption charges

Yes, even early repayment charges are unlawful. Some people have already successfully recovered their charges. zootscoot, a discussion board user on the Consumer Action Group (CAG) website, became a hero to other potential claimants with his successful claim for more than £15,000! Read about it here: (You have to register with the CAG website before you can read this page, but it's free.)

The important thing for all of these claims is to do your own research. To start with, you could read through these articles to learn more on the process of making a small claim. You may also find it useful to modify the template letters you find in two of the articles. For further guidance, seek out the help of experienced claimants on our Reclaim Your Charges! discussion board, and knowledgeable Fools on our Mortgages board.

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