Not upheld: Account administration errors complaint against Godiva Mortgages Limited

Decision detail

Summary

Mr T complained that Godiva failed to implement an interest rate of 0.58% above base rate on his buy to let mortgage product transfer. Mr T posted the signed acceptance form, but Godiva required email submission and did not receive the postal acceptance. By the time Mr T and his broker enquired in April, the rate had been withdrawn and Godiva offered a new rate at 0.88% above base rate instead. The ombudsman found that Godiva's email requirement was clearly communicated in the covering email to the broker, the postal rule did not apply, and the broker (not Godiva) was responsible for ensuring compliance with Godiva's requirements. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Godiva clearly communicated its requirement for email acceptance in the covering email to the broker, even though the mortgage offer itself did not specify the method. The postal rule of contract law does not apply where postal acceptance is not accepted at all. The broker acted as Mr T's agent, not Godiva's agent, so Godiva is not responsible for the broker's failure to communicate or comply with Godiva's requirements. The ombudsman considered it relevant that this was a buy to let mortgage (not a regulated mortgage) and that Mr T was a business person who had appointed a professional broker, making it reasonable to expect compliance with Godiva's specific requirements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website