Abbey Life Santander Mortgage Compensation

Abbey Life Santander Mortgage Compensation.

Santander, the Spanish banking giant, that took over Abbey National, and now are the second largest residential mortgage company in the UK has admitted errors on its mortgage deals and interest rates offered and is to offer up to 30,000 mortgage borrowers compensation.

The mistake comes from an error in not telling mortgage borrowers at the end of the fixed rate period that they could secure a better mortgage deal with Santander or indeed elsewhere.

Many borrowers were simply transferred to Santander’s standard variable rate (SVR).

The compensation could cost Santander £0.25bn in financial redress claims.

How does compensation work?

You are not entitled to what you would not have received. In short, there is an element of proof. Santander, along with all financial companies when compensation is due, are required to put you back to the financial position you would have been if you had switched mortgage to another deal and not been immediately placed on their SVR.

It has been reported that up to 270,000 mortgage customers since 2008 may be affected and all will be written to as agreed with the financial services regulator the Financial Conduct Authority (FCA).

Our view

If Santander has agreed to financially compensate all borrowers then there is nothing to add other than we are staggered that from a financial regulations and controls compliance perspective ‘heads should roll’. It is not rocket science to have a standard clause in a letter template that is issued to all clients at the end of their mortgage discounted, fixed rate or capped rate period.