Financial Ombudsman Service upholds first age-related complaint

The Mortgage Solutions website yesterday reported what is described as the first instance of an age-related complaint being upheld by the Financial Ombudsman Service (FOS). HSBC was rebuked for its age discrimination in turning down the mortgage application of a couple where one of them would be over 65 at the end of the term. They  were in their forties and had applied for a joint £250,000 interest-only mortgage and planned to repay over an 18-year term. When their application was rejected, they made an official complaint to FOS.

The ombudsman reprimanded the bank and described its decision process as “inadequate” and “flawed“. The ruling stated that “The bank relied on untested assumptions, stereotypes or generalisations in respect of age.”

The story was also covered here in The Sunday Times which also claims this as a victory for its ‘Play Fair on Age’ campaign, which highlights instances where customers are told they are too old to borrow as a result of ‘tough new rules’ (not sure exactly what it means by this).

We’ve covered this topic on the blog before, making the point that longer working lives and the disappearance of ‘jobs for life’ means greater flexibility is required about where we live if we are going to be able to compete at all ages in the labour market. This in turn means having the ability to take out new financial products like mortgages.