News Column

Judge rules bank unfairly double-billed mortgage customers

August 20, 2014

Michael McHugh; Michael McHugh

THOUSANDS of Bank of Scotland customers who fell behind on their mortgages have been unfairly double-billed, it has been claimed.

The issue emerged in a High Court ruling in Belfast that found the bank had added arrears to outstanding mortgage balances without the consumers' consent. This produced increased mortgage payments, meaning customers were effectively paying off their arrears.

The bank then proceeded with legal action to repossess the properties and asked the customers to make additional payments towards the arrears to avoid losing their homes.

The Housing Rights Service, which supports distressed borrowers, challenged how the lender was dealing with mortgage arrears, in conjunction with three customers facing repossession.

Judge Master Ellison ruled that the Bank of Scotland, part of Lloyds Banking Group, had been unfairly double-billing customers who fell behind with their mortgage payments.

Master Ellison said the bank's behaviour had been "unconscionable".

He added: "The plaintiff is, as it were, having its cake and eating it. There may not be fraud involved, but I would certainly not regard this as fair accounting."

The Housing Rights Service said the judge's finding could have implications for thousands of mortgage holders across the UK. Christopher McGrath, solicitor with the Housing Rights Service, said: "It is our view that this practice unfettered would undoubtedly have resulted in many borrowers unnecessarily losing their homes."

A Lloyds Banking Group spokeswoman said: "Repossession is always the last resort and we work hard to ensure that we are providing customers facing financial difficulty with the right support to help ease their circumstances and ultimately help to resolve the situation.

"We are currently considering the Northern Ireland High Court judgment and our position following that judgment. Once we have fully reviewed the findings, we will respond accordingly."

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Source: Herald, The (Scotland)

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