Banking Misconduct and the FCA

Alex Burghart Excerpts

Thursday 10th May 2018 Commons Chamber

[Alex Burghart (Brentwood and Ongar) (Con)]

It is a pleasure to have the opportunity to talk in this important, if somewhat depressing, debate. We have heard over and again from hon. Members on both sides of the House that the FCA, the ombudsman and the banks have been found wanting, so we must ask what possible redress our constituents can hope to have when those three bodies are found not to be up to the mark.

A number of cases in Brentwood and Ongar have been brought to my attention, but this afternoon I will just talk to the case of a couple I believe are with us in the Gallery. They took out a mortgage with Halifax, part of Lloyds Banking Group, in 2008. They were not in arrears at the time, but they sought to remortgage in 2013 because they could see things might be difficult down the line. Their request was refused. The couple subsequently did fall into arrears, and the bank sought to repossess their house, which caused them an enormous cost to their wellbeing and health. One can only imagine the stress people go through in such circumstances.

We know LBG is not spotless in this area. In April 2017, the ombudsman found against LBG in the case of a customer who had been stranded on a variable rate mortgage—people in that situation are called mortgage prisoners—and found this had left the borrower in

“a worse position, having to pay a higher rate, which hasn’t been in his best interests.”

A couple of months later, in July 2017, the FCA issued a statement saying that LBG had agreed to set up a redress scheme for mortgage customers who had incurred fees after they fell behind with their mortgage payments:

“Following engagement with the Financial Conduct Authority …Lloyds acknowledged that when customers fell into arrears, they did not always do enough to understand customers’ circumstances to be confident that their arrears payment plans were affordable and sustainable.”

Those two findings in 2017 should have given my constituents some succour and hope, but they had previously taken their case to the ombudsman and consequently found themselves with no adequate redress. Like many hon. Members here today, they subsequently saw the “Dispatches” programmes mentioned by my hon. Friend the Member for Harborough (Neil O’Brien) in which it became clear the ombudsman may not have had quality of judgment in many cases. My constituents have grave uncertainty that they have been treated fairly.

We now find that the bank is disinclined to change its mind. We have reached an impasse. My office, the all-party parliamentary group on fair business banking and finance and the family themselves have been round the houses. They have gone back to the bank, to the FCA and to the ombudsman, but there is no way through. We are left in a frustrating position, and my constituents feel that vital information about their case is not being taken into account. Indeed, we can see no way in which it can be taken into account.

I would be grateful if the Minister considered my constituents’ case as he looks again at the system. I am interested in the APPG’s proposals for an affordable and accessible dispute resolution platform with the powers of a court. We must strive for fairness, and fairness requires honest redress and honest arbitration.