Courts urged to consider FSA rules in repossession cases

The Financial Services Consumer Panel (FSCP) has expressed concern that some County Court judges are not ensuring that lenders follow certain procedures before attempting to repossess the homes of people in mortgage arrears.

The panel, which acts as an independent voice for consumers of financial services in the UK, is insisting that lenders should follow rules laid down by the Financial Services Authority (FSA) and wants judges to refuse possession orders where the FSA rules have been flouted.

Speaking on the BBC’s Radio 4 Moneybox programme, John Howard chairman of the FSCP said: “Our information is that those rules are not always being taken into account when lenders go to court and we have had some suggestion that lenders, particularly in the sub-prime sector, are rushing to court to get people out of their homes to get their money back, and not following the proper processes the FSA says they should.”

Under the FSA regulations, lenders must: make reasonable efforts to reach agreement on repayment of the debt; adopt a reasonable timescale for the debt to be repaid and not put pressure on the customer to come to an unreasonable agreement.

According to Mr Howard, the courts are not always aware that the FSA rules have been disregarded because lawyers acting for borrowers are not introducing them into court proceedings.

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