The FOS has published its annual report and accounts 2015/16 and two technical notes aimed at mortgage consumers on mortgage arrears and charges and mortgage shortfall.

Key points from the annual report include (among others):

  • 75% customer satisfaction level reached for resolved claims and 57% in cases with an outcome which was not desired. In total, 438,802 cases were resolved by FOS - 100,000 more than received.
  • FOS become ADR approved in July 2015, resolving two thirds of all non-PPI claims within three months and increasing transparency by publishing over 35,000 decisions.
  • FOS increased its use of technology, with more than 50,000 people making their complaints online.
  • PPI complaints continued to take up the majority of FOS’ time, with FOS anticipating the number of complaints to increase in the coming year due to the potential time limits that may be imposed for missold PPI complaints.
  • In terms of FOS’ financial performance, FOS saw its operating deficit at £22m, significantly less than the £46m estimate. 

Going forward into 2016/17, FOS’ core aims include continuing to increase customer confidence beyond 75%, aiming to settle 9 out of 10 of non-PPI claims within three months, reducing the costs of support functions and freezing case fees paid by businesses at £550 for the 4th year running. 

The technical notes aimed at mortgage consumers set out the expectations the FOS has concerning mortgage lenders and what mortgage consumers can expect in relevant situations. Of key interest are the following:

  • The mortgage company has a responsibility to respond sympathetically and constructively when a borrower falls in arrears. If a lender has caused unnecessary upset, the FOS can tell them to compensate the borrower.
  • The FOS will not necessarily say that arrears charges are unfair, but the FOS may decide they are unfair if someone has kept to an agreed repayment arrangement. If the FOS decides that the charges have been applied unfairly, it can tell a mortgage company to refund them.
  • If a repossessed property is sold and a shortfall remains to be repaid by the borrowers, the FOS can look into how a mortgage lender has handled the sale of the property and whether the shortfall was a result of the mortgage lender underselling the property. The FOS can also consider the nature and frequency of the communication between the mortgage lender and the borrower, especially in cases where the lender has not taken action to recover the shortfall until months after the sale.

The FOS has also provided a list of varied specific scenarios for mortgage consumers, together with relevant guidance from the FOS.