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FCA to consult on mortgage terms after tracker hikes

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The Financial Conduct Authority (FCA) is to consult the industry on the significance of small print in mortgage contracts in the wake of decisions by banks to increase their tracker rates.

Speaking at an event for financial advisers on Tuesday, FCA mortgage and consumer lending director Linda Woodall said a decision by West Bromwich Building Society to increase rates on certain buy-to-let tracker mortgages did not set a precedent for lenders.

Instead, Woodall (pictured) said, the regulator would consider decisions on a case-by-case basis.

Earlier this year, the Bank of Ireland was criticised for hiking the interest rates for thousands of its customers on tracker deals.

“We recognise that there is an issue to be debated in the industry about customers’ expectations and changing of terms and conditions, even if correct,” she said.

“What we will be doing during the course of the autumn will be releasing a discussion paper to debate this with the industry.”

An alternative to considering lender rate rises on a case-by-case basis was to look more generically at whether it was fair for a firm to make changes based on legitimate terms and conditions if this meant changing the fundamental reason the consumer had taken out that product, she said.

The regulator was also in the middle of a thematic review examining whether the practice of forebearance since the crisis was leading to a ‘forebearance bubble’, she revealed. 


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