Took Out a Mortgage After the 1st July 1995? You Might Be Owed Compensation

On 1st July 1995, the UK Government brought in new regulations to protect financial consumers against unfair terms and conditions. From that date onwards, people have had more of a legal standing to challenge their mortgage provider if they think they were given unsuitable advice or mis-sold a financial product.

If you’ve taken out a mortgage after the 1st July 1995, then you could be owed compensation if the mortgage was mis-sold to you.

This guide looks at what the regulations are, what to do if you think your mortgage provider has broken them and how to claim compensation.

Looking for other information on Interest-Only Mortgages? This guide has info on 'Took out a mortgage after the 1st July 1995?'. We have also writen extensively about:

• - Details on interest only mortgage compensation claims
• - Mis-sold interest-only mortgage guide
• - Mis-sold interest-only mortgage compensation amounts detailed
• - Mortgage overcharge refund guidelines

We update all our guides regularly. If you are researching Interest-Only Mortgages and we haven't got an exact guide that helps you, keep coming back as we update daily.

Unfair Terms in Consumer Contract Regulations (UTCCR)

The regulations that came in were the Unfair Terms in Consumer Contract Regulations or UTTR for short. These first came into force in 1995 but were then amended in 1999.

In short, these regulations are all about making sure contract terms are clear and fair. If the standard terms in the contract are deemed to be unfair, the consumer isn’t bound to them.

What Counts as an Unfair or Unclear Mortgage Term?

Mortgage providers must provide fair and clear contracts, and they can’t enforce any terms that are deemed to be unfair. If they do, that could be grounds for you as a consumer to claim compensation for any unclear or unsuitable information you were given and the negative effect that has had on your finances.

In the finance world, companies have a requirement to act in ‘good faith’. This means that they have to deal fairly and openly with customers. A contract term that breaches this and creates an imbalance in the rights and obligations you and the provider have can’t be fair.

This means a mortgage contract term can be unfair for many different reasons, including if:

• It allows your mortgage provider to change the terms of the mortgage without explaining why it’s been done, or without telling you
• It legally binds you to hidden or misleading terms or agreements you weren’t made aware of at the time of signing the contract for your mortgage
• It charges you an unfairly large sum as a penalty if you breach your side of the deal for any reason (e.g. miss a repayment date or amount)
• It could be read or interpreted in more than one way and the contract doesn’t specify which is the correct way it should be understood
• It doesn’t use clear wording to describe the mortgage you are signing up for or the costs involved in doing so

In reality, this could look like a whole host of different things. Even something as trivial as terms and conditions being printed too small for anyone to read is an error that could be deemed as unfair and make the contract unenforceable.

The only way to check if your contract terms are potentially unfair would be to get out your mortgage paperwork and do some reading yourself or have a legal professional check for you. A list of common unfair reasons can be found in the online version of the UTCCR.

What to Do if You Think Your Mortgage Contract Terms Are Unfair

Ultimately, only a court of law can decide whether contract terms are fair. But if you think you’ve signed a contract where the terms were unfair, tell the Financial Conduct Authority about it.

They will investigate for you and take action if they deem it necessary. They can also help you claim any compensation you are owed from your mortgage lender or advisor.

Have You Been Mis-Sold Your Mortgage?

The rules around unfair contracts are pretty complex. Even if your complaint doesn’t quite tick the strict boxes for being unfair, it still might’ve been mis-sold to you.

Mortgage mis-selling is tipped to possibly be the next big financial scandal. Mis-selling is a broad term that covers everything from negligent advice to malicious dodgy dealings. If it turns out you’ve been mis-sold your mortgage, you could be entitled to compensation.

Signs Your Mortgage May Have Been Mis-Sold

• It's unaffordable. Your lender or broker must ensure that it's affordable to you both at the time it's sold to you and for the rest of the term. If this isn't the case and you've fallen behind on payments, then you may be able to claim for losses from day one.
• It doesn't meet your needs. If you were advised to take out a mortgage that wasn't suitable for you (e.g. you were encouraged to take out an interest-only mortgage with no plan in place to repay borrowing) then it may have been mis-sold. Make sure to check for any evidence of mortgage overcharging too as you may be due a refund.
• You were given bad advice. This covers a range of issues, including being advised to consolidate your existing debts and loans into your mortgage by remortgaging when there were more suitable options available to you or not having all of the risks involved in an interest-only mortgage explained to you fully and clearly.
• You weren't told the whole story. If your mortgage advisor failed to mention any commission they'd receive from the lender for you taking out a certain mortgage or any high fees involved in the process, then this also counts as negligence on their part. This could be classed as mis-selling and warrant a compensation claim.
• Your information is incorrect. If you went through a broker and they submitted incorrect personal information on the mortgage application to get a higher mortgage offer or a better deal, this isn't allowed. 

What to Do if You Think You’ve Been Mis-Sold To

If you think you’ve been mis-sold to or given unfair advice, make a complaint. After collecting all the paperwork you have and finding any evidence that confirms your suspicions, it’s time to write to the company you think were at fault - usually your advisor, lender or broker.

Send them a letter of complaint with your details, the details of your mortgage and why you suspect you’ve been mis-sold to. If you don’t hear back within 8 weeks or you’re not happy with the response you get, you can then escalate it to the Financial Ombudsman Service. They will then investigate and can ask the company to pay you compensation if necessary.

How Can Money Savings Advice Help You With Making an Interest Only Mortgage Compensation Claim?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Financial Claims management companies. They have already helped thousands of people claim compensation for mis-sold financial products and they can do the same for you.

Choosing an independent claims management company means they won’t proceed with a claim unless they are sure it is in your best interests. They are also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these claim management companies who can help you make a compensation claim, then click on the below and answer the very simple questions.