30,000 mortgage holders due compensation says FCA
Santander forced to contact 270,000 customers after "paperwork error"
April 26, 2013
The Financial Conduct Authority (FCA) has ordered Santander to contact 270,000 mortgage customers about mortgage errors in 2008. A paperwork error in 2008 meant that borrowers with Abbey (taken over by Santander) were not given the proper information when they were moved onto the Standard Variable Rate (SVR) when their fixed rate deal ended. Customers were also not told that they were able to get a cheaper deal by transferring to another lender.
The problems started in 2008 when the Bank of England base rate was being cut. It went down by 1% but Santander only passed on a decrease of half a percentage point to its customers. It also increased the ‘cap margin’ – the limit at which a provider can charge its customers above the base rate – to 3.75%, from 2.5%. At the time the base rate was at 2% so this meant Santander could charge up to 5.75% for its SVR.
The bank will be contacting customers who might be due compensation but you can also find out more information by visiting their website.