Save, make, understand money

First-time Buyer

Mortgage complaints rise for eight out of 10 worst lender offenders

Written By:

Eight of the top 10 mortgage lenders with the most complaints have seen a rise in the number of dissatisfied customers writing to the Financial Ombusdman in the first six months of the year.

With little movement in the rankings of the top 10 table, only HSBC and NRAM can report a fall in the number of new complaint cases received by the Ombudsman compared to the previous six-month period. New complaints fell by 17% for HSBC to 157, pushing it further down the table from seventh to eighth while NRAM saw a drop of 6% to 325.

Bank of Scotland remained at the top of the table with 769 mortgage complaints. While the lender maintained its number one position, with a rise of 21% in new complaints on the previous six months, it sits in second place to Nationwide when it comes to the largest percentage increase of new complaints received.

Nationwide has moved from fifth to fourth in the table, swapping places with NRAM, the so-called bad bank of Northern Rock mortgages, carved away from the lender’s main book before it was bought by Virgin Money. From 1 January to 30 June, FOS received 433 new complaints about Nationwide’s mortgage division representing a 38% six-monthly increase.

This compares to a 10% rise for Santander, which maintains its place in second position with 563 complaints followed by Barclays in third with 473 new complaints, up by 13% since H2 2015.

A spokesperson for Nationwide said: “While the number of FOS complaints for mortgage and home finance has seen an increase, the data also shows that the percentage of these complaints against Nationwide upheld in the customer’s favour has decreased to 32%. This is compared to an industry average of 45% upheld in the customer’s favour.”

The Nationwide spokesperson said the rise in complaints coincided with an increase in mortgage lending by the society, with gross lending for the six months to 30 June 2016 of £17.5bn up from £16.8bn for the six months to 31 December 2015.

Two networks were highlighted by the FOS data on individual firms. Sesame received 160 complaints covering all its divisions. Some 73 complaints were made about its life and pension products and services with just 19 related to mortgages and 26 for general insurance (GI). Openwork received 80 new complaints overall, with 22 originating from life and pensions, 15 from mortgages and 12 from its GI business.