LONDON, Oct 19 (Reuters) - Britain’s mortgage lenders face compensation claims from hundreds of thousands of customers for incorrectly handling payment arrears, the Financial Conduct Authority said on Wednesday.
The watchdog found that lenders were automatically adding arrears to the capital sum of the mortgage, and also continuing to ask for a separate arrears payment.
This meant that customers already in financial difficulties were temporarily overpaying on their home loans, facing extra fees and charges, and further damaging their credit rating.
The FCA published a draft guidance on Wednesday for firms to work out compensation for customers by the end of June 2017.
An industry group set up by the FCA and representing 66 percent of Britain’s mortgage market estimated that 750,000 customers could be affected, with compensation potentiallly running to the low hundred of pounds each.
“Firms should start identifying affected customers immediately and not wait until the finalised guidance is published,” Jonathan Davidson, the FCA’s director of retail supervision said in a statement.
Reporting by Huw Jones, editing by