Not upheld: Mortgage administration / arrears handling complaint against Buckinghamshire Building Society

Decision detail

Summary

Mr and Mrs K complained that Buckinghamshire Building Society was incorrectly charging them a 4% interest rate on their tracker mortgage, claiming they had not agreed to the 4% collar (floor) that prevented the rate from falling below that level. Buckinghamshire could not produce a definitive written agreement but relied on a 2008 Key Facts Illustration, multiple letters, and annual statements all referencing the 4% minimum. The ombudsman found the cumulative documentary evidence sufficiently persuasive that the customers should have been aware of the collar, and their failure to complain for approximately five years despite base rates being below 1% suggested they had accepted the terms. The complaint was not upheld, and Buckinghamshire was ordered to pay £50 compensation for poor customer service and unsatisfactory documentation.

The Ombudsman's reasoning

Although Buckinghamshire could not produce a definitive agreement showing Mr and Mrs K's explicit consent to the collar, the ombudsman found the cumulative documentary evidence from 2008 onwards (Key Facts Illustration, multiple letters, and annual statements all referencing the 4% minimum) was sufficiently persuasive that the customers should have been aware of the floor rate. The fact that Mr and Mrs K paid 4% without complaint for approximately five years, despite the base rate being below 1%, suggested they had accepted the collar. Had they not agreed to it, the ombudsman reasoned they would have complained earlier.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website