Saturday 24 December 2011

GLC progresses challenge to mortgage arrears charges under Financial Services and Markets Act 2000

GLC has settled litigation against a 'sub-prime' lender in relation to 'administrative charges' imposed when their customers went into arrears of their mortgage. The following charges were applied on a repeat or monthly basis:  ‘Unpaid Direct Debit Fee’ (£25), ‘Arrears Management Fee’ (£50), Late Payment Management Fee (£25), and ‘Litigation Management Fee’ (£115).

Utlising the Financial Services and Markets Act 2000 and other legislation, GLC secured a refund of 75% of the 'administrative charges' imposed historically, a figure of just under £1,000, together with legal expenses. If this was replicated across the current UK 'sub-prime' mortgage book, GLC has estimated around £150m could be refunded to UK consumers; with a similar figure in relation to 'prime' mortgage book.

GLC's Mike Dailly said: "Govan Law Centre has been developing and testing innovative legal arguments as a means to challenge the imposition of unnecessary and unfair mortgage charges where UK consumers are in arrears. We believe the law is on the side of consumers, and we will continue to refine our legal strategy with a view to disseminating free information to empower UK consumers, and facilitate access to justice".




  2. On the Consumer Action Group, it is said that the lender was Southern Pacific Personal Loans. This particular lender, provided loans secured by way of a second charge. As such, this lender is not regulated by the FSA. On this basis could you explain how you were able to use the Financial Services and Markets Act 2000, when it does not by law apply to this lender

  3. Caroline Sullivan30 December 2011 at 18:13

    Well done GLC. Keep up the good work.

  4. Anonymous, the standard security was a regulated mortgage contract as it was a first charge. You will be aware of the Government's proposals for second charge mortgages to fall under FSA regulation, which makes considerable sense. And there is also, of course, the UTCCR, which can be used here (and this is not as complex - in fact or law - as the position as regards overdraft charges and personal current accounts).

  5. Hi GLC
    Just want to say keep the good, no excellent worj you're doing on behalf of the underprivileged, undervoiced, downtrodden and overlooked!!!

  6. Mike Dailly and team are amazing...please keep up the excellent work !!!