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FSA: Debtors should be treated fairly

06/08/2008

Mortgage lenders must ensure they treat customers fairly regardless of their credit history, the Financial Services Authority (FSA) has said.

A recent review by the FSA found "weaknesses" in the manner some lenders are dealing with home repossessions and arrears, in particular involving customers with a history of debt problems.

Furthermore, the authority found the number of people handling arrears and possessions is increasing, although it is "historically low".

The FSA`s director responsible for the mortgage sector Lesley Titcomb said: "As our data shows in these current market conditions more people are struggling to meet their mortgage payments and it is vital that firms treat them fairly."

She went on to say lenders must take individual circumstances into account and only repossess homes when there is no alternative.

The behaviour of specialist firms was underlined by the report, which said there was evidence of lower standards of control of arrears, a readiness to go to court and a blanket approach to recovering debts.

Commenting on the review, the Council of Mortgage Lenders said it was "surprised" by the conclusions about specialist firms.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according