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Disputes lodged with the Financial Ombudsman Service have skyrocketed in recent months as borrowers seek to break out of fixed rate loan contracts.
The banking and finance division of the Ombudsman Service received 5,085 complaints in the second half of 2008, more than double the number of complaints received in the same period in 2007, The Sheet reported today.
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According to the Ombudsman the complaint surge was a result of a large number of complaints about break fees on fixed rate loans.
The most common complaint was that the lender did not inform the borrower they would incur an early repayment fee if they paid out their loan before the expiry of the fixed rate period.
As a result of the surge in disputes the Ombudsman has set up a project team to specifically deal with these matters.
In judging cases the Ombudsman said it will consider whether the fee has been properly disclosed to the customer, whether the fee has been charged in accordance with the borrower’s contract and whether the size of the fee conforms to any scale of charges applied by the lender.
