Not upheld: Account administration errors complaint against Prestige Finance Limited
Financial Ombudsman decision DRN-4090531 of 2023-05-25T00:00:00+00:00. Account administration errors complaint against Prestige Finance Limited. Outcome: Not upheld.
Decision detail
| Reference | DRN-4090531 |
|---|---|
| Decision date | 2023-05-25T00:00:00+00:00 |
| Firm | Prestige Finance Limited |
| Product | Mortgage |
| Claim type | Account administration errors |
| Outcome | Not upheld |
| Remedy | No remedy ordered. The ombudsman noted that Prestige had already proactively reviewed the account and reduced the interest rate from 13.26% to 5.23% (backdated to November 2020), removed £140 in unfairly applied charges, and reduced the monthly payment requirement. The ombudsman suggested that if Mr and Mrs H wished to review their payments further, they should contact Prestige to discuss their options. |
Summary
Mr and Mrs H complained about a second charge secured loan with Prestige Finance Limited, unhappy with the outstanding balance due to fees and interest arrears, believing they had paid more than expected. The loan was originally advanced in 2005 for £27,000 and transferred to Prestige in 2015. Mr and Mrs H experienced payment difficulties from 2009-2013, during which arrears, charges, and additional interest accumulated. The ombudsman found that the higher balance resulted from normal lending practices and that Mr and Mrs H were adequately informed through annual statements and correspondence that additional payments were needed. Although Prestige's statements between 2016-2020 lacked detailed breakdowns, no regulatory requirement existed for such disclosure on unregulated loans. The ombudsman noted that Prestige proactively reviewed the account in 2021, reduced the interest rate, and removed unfairly applied charges, constituting fair treatment. The complaint was not upheld.
The Ombudsman's reasoning
The ombudsman found that the higher loan balance resulted from the normal and accepted practice of charging interest on amounts owed and passing on reasonable administrative costs incurred during the arrears period (2009-2013). Mr and Mrs H were adequately informed throughout the period under consideration (December 2015 onwards) that additional amounts were owed beyond the contractual monthly payment, through annual statements containing charge summaries and multiple letters explaining the situation. Although the statements between 2016-2020 could have provided more detailed information, the ombudsman noted this was an unregulated loan with no specific regulatory requirements for information provision, and the lender did provide basic information about amounts owed, charges, and transactions. The ombudsman was satisfied Mr and Mrs H received all correspondence at their correct address and were aware of the need to make additional payments. The ombudsman concluded that Prestige's proactive review in 2021, which reduced the interest rate and removed unfairly applied charges, constituted treatment that was more than fair.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Prestige Finance Limited, all decisions | 46 | 14% |
| Account administration errors, all decisions | 25,844 | 25% |
| Mortgage, all decisions | 24,740 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website