Not upheld: unfair application of arrears fees and charges; arrears handling; communication practices complaint against Prestige Finance Limited

Decision detail

Summary

Mr B complained that Prestige Finance Limited unfairly applied fees to his second charge mortgage and commenced legal action due to poor communication. Mr B claimed he was abroad, relied on email communication, and delayed receiving a form to update his bank details, resulting in missed payments from November 2024 to May 2025. However, the ombudsman found that Prestige had sent a direct debit mandate by post on 21 November 2024 and provided bank transfer details on 10 December 2024, giving Mr B alternative payment methods. The ombudsman concluded that Mr B had a contractual obligation to make payments and should have taken steps to address the arrears. The fees charged (£10 per arrears letter, £20 for formal demand, £20 for field agent) were found to be reasonable and in line with industry standards, and Prestige's refusal to communicate solely by email was deemed reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr B had a contractual obligation to make monthly payments and failed to do so from November 2024 to May 2025. Although communication issues existed (covered in the earlier final response), Prestige provided alternative payment methods by December 2024, including a direct debit mandate by post and bank transfer details. The ombudsman concluded Mr B should have reasonably been aware of the arrears and taken steps to address them. The fees charged (£10 per arrears letter, £20 for formal demand, £20 for field agent) were found to be in line with industry standards and reflected the additional administration required. Prestige's refusal to communicate solely by email was deemed reasonable given security concerns. The ombudsman was satisfied Prestige complied with MCOB requirements by providing required information within 15 days and quarterly statements.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website