Partially upheld: Service failures generally complaint against Fairstone Financial Management Limited
Financial Ombudsman decision DRN-5752645 of 2025-09-08T00:00:00+00:00. Service failures generally complaint against Fairstone Financial Management Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-5752645 |
|---|---|
| Decision date | 2025-09-08T00:00:00+00:00 |
| Firm | Fairstone Financial Management Limited |
| Product | Mortgage |
| Claim type | Service failures generally |
| Outcome | Partially upheld |
| Remedy | Fairstone Financial Management Limited is required to pay Mr B and Miss A £100 each (total £200) in respect of the distress and inconvenience caused by the incorrect information provided after the cooling-off period had expired. |
Summary
Mr B and Miss A complained that Fairstone provided incorrect information about the cooling-off period for a mortgage product switch, resulting in them having to pay an Early Repayment Charge of £4,115.39. They took a new two-year fixed rate deal on 1 January 2024 but later wanted to cancel when their property purchase fell through. The lender's completion letter of 9 December 2023 clearly stated the 28-day cooling-off period expired on 6 January 2024, but Mr B and Miss A did not cancel by that date. Fairstone subsequently provided incorrect information on 11 and 16 January 2024 suggesting they could still cancel, which gave them false hope but came after the deadline had passed. The ombudsman upheld the complaint in part, awarding £200 compensation for distress and inconvenience caused by the misinformation, but rejected the request to reimburse the ERC, as the error did not cause them to miss the cancellation deadline.
The Ombudsman's reasoning
The ombudsman found that the lender's completion letter of 9 December 2023 clearly communicated that the 28-day cooling-off period ran from that date, expiring on 6 January 2024. It was reasonable for Mr B and Miss A to rely on this information from the lender, even if they had been told something different by Fairstone. The incorrect information provided by Fairstone on 11 and 16 January 2024 came after the cooling-off period had already expired, so it did not cause them to miss the cancellation deadline. The ERC was incurred because they failed to cancel within the timeframe communicated by the lender, not because of Fairstone's misinformation. However, the incorrect information did cause loss of expectation and distress, warranting compensation. The ombudsman rejected the argument that Fairstone should reimburse the ERC, as putting things right means restoring the customer to the position they would have been in had the error not occurred—which would still have resulted in liability for the ERC.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Fairstone Financial Management Limited, all decisions | 39 | 55% |
| Service failures generally, all decisions | 32,767 | 33% |
| Mortgage, all decisions | 24,740 | 22% |
Source
Read the original decision on the Financial Ombudsman Service website