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FCA: No evidence interest-only mortgages were mis-sold

The Financial Conduct Authority has said that there has been no mass evidence collected in relation to the mis-selling of interest-only mortgages to homeowners in the UK.

Since the news that over a million people with interest-only mortgages face a shortfall when it comes to making final payments on their mortgages, many have said they did not fully understand the product they were buying, and now face drastic measures to raise the money required to complete payments on the loan.

This has led to Money Boomerang, a company specialising in Payment Protection Insurance (PPI) claims, launching a television advert aimed at encouraging those with interest-only mortgages who feel they were mis-sold the product to contact them. Many other claims management companies have also jumped on the bandwagon, and this has caused concern over the outbreak of another ‘PPI style’ claims culture.

However the FCA has taken a very clear stance on this, and despite the fact that 2.5pc of people who were sold interest-only mortgages (about 65,000) said they were unaware of the terms and conditions, the regulator has deemed that there is no evidence of mass mis-selling of the product.

“This is not one of those complex products. It is what it says on the tin”, Martin Wheatley, the head of the FCA, told the BBC.

A spokesman for the Financial Ombudsman Service (FOS) reiterated this point: “The FCA review concluded that the vast majority of people were fully aware of the conditions of the mortgage they took out. Even people in the other category might not have a claim for mis-selling. Even if you weren’t aware of the terms of the loan it doesn’t mean you weren’t told about them.”

Those who do feel you have a claim should also avoid claims management companies, who can charge fees of up to 25pc of the final settlement. Instead any claims should be directed to the FOS who will handle them for free.

For any advice and help with your interest-only mortgage, please contact a member of our team of our advisors, who will be happy to help.

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