Santander has dropped its judicial review at the high court against the Financial Ombudsman Service (FOS) to review mortgage overcharges.
The review aimed to prevent the FOS from accessing historic standard variable rate (SVR) variations more than six years before a mortgage complaint was lodged.
Quanta Law, who challenged the review, has called the decision a “step towards justice” for those who have been mis-sold a mortgage.
The lender has agreed to pay both the FOS’ and Quanta Law’s costs in the matter.
A Santander spokesperson says: “We do not have a comment at this time.”
Quanta Law chief executive Jonny White says: “This decision is important and necessary for firms like ours striving for justice on behalf of clients that have been mis-sold mortgages.”
“We’re delighted that Santander filed a notice of discontinuance and the FOS’ decision to look at the full mortgage term regarding each rate variation to assess overcharge claims, can go ahead.”
Also commenting on the case, UK Mortgage Prisoners lead campaigner Rachel Neale states: “Lenders have profiteered from vulnerable customers and this is another example of a successful challenge to enable rates across the entire mortgage term to be considered.”
“We hope FOS decision in due course will help all borrowers who have been trapped historically and that those who have suffered detriment will be recompensed in due course and that this will extend to inactive administrators also.”
Last week, Neale said mortgage prisoners could be facing rates of 9% and above in the current economic climate.
On 22 September, mortgage prisoners, and the wider public, faced the seventh interest rate hike this year after the Bank of England (BoE) increased the base rate by 50 basis points to 2.25%.
As the highest, the base rate has been for 14 years, the move is said to help counter rising inflation, which the BoE now predicts will hit 13% before year-end.
At the time of the announcement, Neal said: “We already have a housing crisis in this country but there is a real live historical mortgage crisis that the government think if they ignore it will be swept under the carpet.”
The Co-op Bank took a legal challenge against a judicial review at London’s High Court on a customer’s past mortgage interest payments in June.
The review was to consider whether the FOS can investigate a complaint about the fairness of the interest rates that the lender charged customer Gwen Davies.
Co-Op Bank was said to be trying to stop the ombudsman from investigating Davies’ case on the grounds that it is time-barred, according to UK regulatory rules on dispute resolution.
