Unfair charges result in fine for GMAC-RFC
Unfair mortgage charges have resulted in a fine for a UK mortgage lender according to a recent report. GMAC-RFC has been fined nearly three million pounds by the UK’s financial regulator, the Financial Services Authority.
The fine was imposed after the lender was found to have imposed unfair charges and fees onto the accounts of customers, and was found guilty of failing to treat its customers fairly.
The company was found to have secured over £7.5 million pounds from around 46,000 mortgage customers as a result of its unfair fees and charges. The FSA found that the lender had impos4ed the charges on the accounts of a number of customers that were experiencing difficulties with making repayments on mortgages between 2004 and 2008.
An official from the FSA said: ‘This case shows credible deterrence in action. It is an excellent example of what the FSA’s more intrusive approach can achieve for consumers, and it reflects what we said in our Mortgage Market Review last week about unfair mortgage arrears charges. Mortgage lenders and third party administrators should read this final notice and the Mortgage Market Review and take action in the interests of their customers.’
An official from the company said: ‘We want to apologise to customers affected. We have worked openly with the FSA to review and revise our procedures for managing accounts in arrears. Whilst our arrears charges were in line with the market, in hindsight, we fully accept that for certain fees our estimates of the costs were not proportionate to the additional administration actually required. We will be writing to customers who incurred these specific charges when in arrears and will re-credit the charges plus interest.’
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