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We have fined DB Mortgages £840,000 for poor treatment of customers in arrears and for irresponsible lending practices. DB Mortgages must also write to affected customers and pay compensation, which it estimates will be at least £1.5m. Find out what to do if you have been affected.
DB Mortgages treated its customers unfairly when it failed to consider the individual circumstances of customers in arrears or tell them about the options available to them. The firm also applied charges in excess of the true cost of administering accounts in arrears and repeatedly charged fees to accounts in arrears.
On lending practices, DB Mortgages failed to:
look at whether there were cheaper deals available for customers seeking self-certified mortgages;
show that customers could afford mortgages where the term continued into their retirement; and
ensure customers with an interest-only mortgage had thought about where they would live if they had to sell their house to pay off the loan.
What should you do next?
DB Mortgages will contact all affected customers. However, if you have any queries you can call them on 0800 083 1203.
Firm hand
Margaret Cole, managing director of enforcement and financial crime, said: ''This is the first time we have taken enforcement action against a firm for irresponsible mortgage lending. Firms need to understand that we will not tolerate lax lending practices and unfair treatment of customers in arrears.''
DB Mortgages has since made significant improvements to its arrears-handling procedures and worked with us in an open and cooperative way, which lead to a reduced fine under our settlement discount scheme.
Last updated: 22 February 2011
Source: DB Mortgages to compensate customers in arrears for unfair treatment
DB Mortgages treated its customers unfairly when it failed to consider the individual circumstances of customers in arrears or tell them about the options available to them. The firm also applied charges in excess of the true cost of administering accounts in arrears and repeatedly charged fees to accounts in arrears.
On lending practices, DB Mortgages failed to:
look at whether there were cheaper deals available for customers seeking self-certified mortgages;
show that customers could afford mortgages where the term continued into their retirement; and
ensure customers with an interest-only mortgage had thought about where they would live if they had to sell their house to pay off the loan.
What should you do next?
DB Mortgages will contact all affected customers. However, if you have any queries you can call them on 0800 083 1203.
Firm hand
Margaret Cole, managing director of enforcement and financial crime, said: ''This is the first time we have taken enforcement action against a firm for irresponsible mortgage lending. Firms need to understand that we will not tolerate lax lending practices and unfair treatment of customers in arrears.''
DB Mortgages has since made significant improvements to its arrears-handling procedures and worked with us in an open and cooperative way, which lead to a reduced fine under our settlement discount scheme.
Last updated: 22 February 2011
Source: DB Mortgages to compensate customers in arrears for unfair treatment
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