Treasury Select Committee says Banks and Lenders Overcharging

A Treasury Select Committee report will highlight the lack of protection of vulnerable banking consumers. FSA needs to act says Which?, the consumer magazine.
Treasury Select Committee says Banks and Lenders Overcharging
8/9/2009
Updated:
8/9/2009

This week the Treasury Select Committee publishes its report on mortgage arrears and access to mortgage finance.

The Committee found that some lenders were overcharging in an “intolerable” way.

“We have heard evidence of charges as high as £35 from some lenders for simply sending a letter or making a phone call, and charges as high as £150 for a visit from a so-called ‘debt counsellor’,” said John McFall, chairman of the committee.

“Such practices are intolerable and are placing additional financial as well as emotional strain on those already struggling to keep a roof over their head,” he added.

Which?, an independent consumer champion in the UK, commented that the Financial Services Authority (FSA) needs to start protecting consumers who have been made vulnerable by the recession and stop shielding the commercial interests of lenders trying to evict people home-owners. It must respond to the Committee’s condemnation of its leisurely approach to enforcement by immediately publishing the names of the firms it is investigating.

Peter Vicary-Smith, chief executive of Which?, emphasised, “The last thing you need if you’re struggling to pay your mortgage is to be hit with excessive charges, yet that is what some lenders are doing to their customers.”

However, FSA chief executive Hector Sants told the BBC, “We are doing our very very best... and you can expect to see tougher action from us in the future.” He said, ”People should be under no illusion we take this matter extremely seriously and we understand the importance of addressing these issues as quickly as we can.”