Byline: James Coney
BORROWERS are reclaiming exit fees worth hundreds of pounds which they were charged when they came to the end of their mortgage deals.
These homeowners are picking holes in their home-loan contracts to contest how much it really costs to close an account.
Banks are simply paying out 'goodwill' money to end the complaint, instead of fighting to prove their costs.
Many homeowners have begun contesting the original wording of these fees in their mortgage contract. When the terms and conditions state that the fee relates to administration or costs incurred to the bank, they are asking the lender to set out what the costs incurred are.
They then argue that the charges are, in fact, a penalty. It is the same legal argument that bank customers have used to reclaim unauthorised overdraft charges.
A spokesman for the Financial Ombudsman Service says: 'When people make these claims, it relates to specific wording in their contract that suggests the charge is linked to a cost incurred for administration. …