The Fos said MAS5 should assume the four increases in the standard variable rate did not take place and pay redress on that basis.
The agency has seen other complaints upheld by the Fos relating to interest rates. Complainants in one case were hit with a 1 per cent interest rate margin when they let their property. The Fos found the margin unfair, and told MAS5 to remove it and refund the complainants.
In another case, MAS5 was found to have given incorrect information regarding interest rates on two occasions to a customer, and so was ordered by the Fos to pay £200 to the customers.
Regulatory 'failure'
The APPG said it was “concerned” the customers might have signed confidentiality agreements which prohibited them from sharing their concerns with the Financial Conduct Authority.
“We are especially concerned that when businesses receive a Fos decision which they do not want to apply in other cases they put pressure on customers to withdraw their complaint, accept an agreement and sign a confidentiality clause,” it said.
In a third letter to the FCA, the APPG asked the regulator to open an investigation into the increases in the standard variable rates by MAS5 during the period 2009-12, looking at whether senior executives within MAS5 and the Co-Operative Bank had “misled FCA officials”.
It also suggested the FCA should undertake a 'lessons learned' exercise into why it allegedly “failed” to uncover or properly investigate the misconduct within MAS5 when this issue was reported to them over the period 2019-21. FTAdviser has approached the FCA for comment.
In July, the Treasury said it would look for “practical and proportionate solutions” for those trapped in a mortgage with an inactive firm once the FCA publishes its review.
The review found 47,000 customers were still mortgage prisoners, and that 34,000 were in payment shortfall.
The FCA said the government and industry would use these figures to consider if there are further practical and proportionate solutions for mortgage prisoners.
ruby.hinchliffe@ft.com
