by David Thomas
principal ombudsman banking & loans division
This is the second banking and loans edition of ombudsman news. We received plenty of feedback on the first one - not just in response to the mortgage underfunding consultation - and it's good that the industry, commentators, and other interested parties are keen to follow so closely what we're doing.
We start with our feedback statement about the consultation on mortgage underfunding that we included in our first issue. We circulated this feedback statement a few weeks ago to those who responded to the consultation and to lenders, but it now gets a wider airing. We continue the mortgage theme with some comments on the signature and retention of mortgage offers. We also look at early repayment charges on business loans, and highlight how lenders treat such charges differently from the charges on domestic mortgages.
Our "in brief" section includes: the treatment of insurance complaints after N2 (the date when the Financial Services and Markets Act takes effect and the Financial Ombudsman Service acquires its full powers); a case where the firm was held not to be liable for what its customer did; and some issues concerning accounts of minors.
In preparation for N2, we have introduced a new computer system and new procedures, while firms are preparing to meet the Financial Services Authority's requirements about internal complaints-handling procedures. We touch on some issues connected with these preparations. We also include a guest article written jointly by the British Bankers' Association, Building Societies Association and Council of Mortgage Lenders. They fulfil an important role as industry trade associations and we appreciate their contribution to ombudsman news.
As always, I'm grateful to our team of ombudsmen and staff for their continuing and unfailing commitment - and to those, both within the division and in the communications team, who have put together this banking and loans edition of ombudsman news.
ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.
The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.