Lenders are making it even more difficult for customers to clear their arrears on their mortgage payments

Lenders are making it even more difficult for customers to clear their arrears on their mortgage payments by charging unfair fees according to new research.

The study by moneysupermarket found that a selection of leading mortgage lenders were charging £35 for every correspondence regarding a customer’s arrears, and even £100 for advice on how to deal with their situation.

The research also found how confusing it can be for customers, with many variances on lender’s penalty charges. Banks charged anything from £20 to £35 for returned cheques, with some giving a grace period and others charging immediately once a borrower misses a payment.

There was also inconsistency on how much was charged for debt counselling from the lenders, with Halifax and GMAC charging £100 for the service. Only two lenders didn’t charge for their debt counselling services (Accord & Coventry BS), although Barclays and Abbey didn’t offer an advice service for their customers at all.

Moneysupermarket.com’s Louise Cuming says: “Under the Mortgage Conduct of Business rules, regulated by the Financial Services Authority, all cases of financial hardship must be treated sympathetically. My biggest concern is that, in most cases, it will cost a borrower to be treated sympathetically.

Chiltern’s Nathan Gladwell says: “When customers are struggling to keep up their repayments on mortgages or any debt repayments, it’s best to seek independent and impartial advice.

“Banks are businesses and will generally have somewhat different needs to those of the individual in debt.

“Customers should always read their terms and conditions to understand exactly the charges they face in such circumstances.”

Moneysupermarket researched: Halifax, C& G, Accord, GMAC, Coventry Building Society, BM Solutions, Northern Rock