46,000 mortgage holders to receive £7.7m as FSA fines GMAC-RFC Ltd £2.7m for mis-treating borrowers.

Page last updated Friday, 30 October 2009

051-money-houseThe City watchdog Financial Services Authority (FSA) has fined GMAC‑RFC Limited (GMAC-RFC) £2.8million for failing to treat customers fairly and ordered them to pay back, with interest nearly £8million to 46,000 of its mortgage customers.

Because the mortgage lender co-operated they qualified for a 30% (£1.2 million) discount under the FSA’s settlement discount scheme, without the discount the fine would have been £4million.

Between 31 October 2004 and 30 November 2008 the FSA said GMAC had been guilty of "serious failings" which included:

  • excessive and unfair charges for customers that did not reflect administration costs;
  • proposing repayment plans that did not always consider a customer’s individual circumstances;
  • inadequate training of mortgage servicing staff in handling of arrears and repossessions; and
  • issuing repossession proceedings before fully considering all the alternatives.

Margaret Cole, director of Enforcement and Financial Crime, 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.”

Customers who currently have a mortgage with GMAC and have been in arrears or have re-mortgaged but remain at the same address will not have to do anything as the lender will notify any borrower who was charged one of the above fees since 1 November 2004.

After that date borrowers who are still with the lender will have the compensation, plus interest, refunded to their mortgage accounts, thus reducing reduce the level of mortgage outstanding.

Any borrower that believes they were treated unfairly over their arrears and has since moved from the property can call GMAC-RFC direct on 0800 030 4662.

GMAC-RFC have also issued a statement on their website together with downloads of what to do if you feel affected, more on this can be found here

DebtWizard comment

Well done FSA for working faster than normal on this with a good result for the borrower. Had GMAC-RFC not co-operated then the fine would have been considerably higher. I have looked at their website and they genuinely appear to want to redress this situation.

This could be the first time that a mortgage lender has been called in on this and there are numerous other lenders wondering when they will feature next.

Good news for the battered consumer, well done FSA.  

 


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Jo  Thursday, 27 May 2010

The other company that should also be looked at is Preffered Mortgages they repossessed my house in November 2008 and would not agree to me selling it at the time it was on the market for £160.00 ( this was also Zooplas estimate ) i had an offer close to that price but Prefferred sold it nine month late for £130.00 and are now chasing me for £33.000 of negative equity . hell will freeze over before id pay them a penny i think its them that owe me compensation for the loss of my home , my dignity and the on going mental anguish that i have to live with every day

martin james (Guest) Sunday, 06 December 2009

Ge money need to be looked at I have been in arrears with them and been charged for debt councillors I did not want or ask for, charged £40 plus daily interest charges for being days late with payment

Simom Sinclair (Guest) Sunday, 06 December 2009

There are several other Lenders who are vulnerable - the FSA indicated in their submission to the recent Treasury Select Committee looking at Mortgage Arrears Charges that there were 4 Lenders under the microscope - GMAC will have been one of them - GE Redstone Kensington will no doubt feature and this could start a new wave of Consumer Compensation Claims

Debtwizard Thursday, 12 November 2009

Hi John

You could easily drop the FSA a line at 25 The North Colonnade, Canary Wharf, London E14 5HS or call them on 020 7066 1000 and ask if they intend to look at GE Money as well. They may use you as a case study.

I note Cyril below says they can offset this as a business expense, so it needs to be a big fine to cause a stir.

Be interested to know how youy get on if you contact the FSA.
Best wishes

Mike

John (Guest) Thursday, 12 November 2009

Lets hope the FSA looks at GE Money next. They charge £40 a months on overdue accounts.

Cyril Wilkinson (Guest) Sunday, 08 November 2009

Fines that do can be considered a business expense


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