Not upheld: incorrect information provided regarding Early Repayment Charge complaint against Marsden Building Society

Decision detail

Summary

Mr and Mrs C complained that Marsden Building Society incorrectly told them over the telephone that no Early Repayment Charge applied to their mortgage, when in fact an ERC of approximately £4,500 was due. Marsden conceded the error and offered £250 compensation, which the complainants rejected, arguing they should be put in the position they were incorrectly led to believe they were in. The ombudsman found that the complainants would likely have proceeded with their house sale regardless of the correct information, as they had already decided to sell and originally expected an ERC to apply. The ombudsman upheld the £250 compensation as fair, finding it appropriately reflected the temporary distress and loss of expectation caused by the one-week error.

The Ombudsman's reasoning

The ombudsman established that while Marsden undoubtedly provided incorrect information, the appropriate remedy is not to put the complainants in the position they were incorrectly led to believe they were in, but rather to assess the actual impact of the error. The ombudsman found that Mr and Mrs C would likely have proceeded with the sale regardless, as they had already decided to sell, were at an advanced stage, and had originally expected an ERC to apply. The error caused unnecessary distress and loss of expectation lasting approximately one week, which the £250 compensation appropriately addresses.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website