DRN5725301 – Arrears and unpaid direct debit fees; £1,685 refund ordered and interest on fees removed
What happened: A complaint brought through a claims management company about fees and charges added to a mortgage taken out in August 2006. Arrears fees, the cost of possession proceedings and unpaid direct debit fees had been added to the account. The Ombudsman upheld the complaint and required Rooftop to refund 31 monthly arrears management fees of £50 and six unpaid direct debit fees, totalling £1,685, and to rework the account to remove interest added to those fees.
What the Ombudsman decided: Complaint upheld. Rooftop Mortgages Limited required, in full and final settlement, to refund £1,685 to the account and rework the mortgage to remove any interest added to those fees.
The published decision records that the complaint was upheld.
What mattered to the Ombudsman
- That the borrower was in financial difficulty and had still paid the monthly payment in the months in question
- That charging an unpaid direct debit fee on top of a legitimately charged arrears fee was not fair
- That interest added to refunded fees also had to come off
These are the factors this particular decision treated as important. Ombudsman decisions are not precedent and another case can turn out differently.
What this does not prove
It does not decide the wider argument that the fee terms breached the Unfair Terms in Consumer Contracts Regulations, and it does not cover fees applied more than six years before the complaint, which the business did not consent to the service considering.
Source details
- Source type
- Financial Ombudsman Service decision
- Source
- Financial Ombudsman Service, final decision DRN5725301 (Ombudsman: Jan O'Leary)
- Date
- 12 October 2019
- Reference
- DRN5725301
- Mortgage type
- Unknown
- Jurisdiction
- United Kingdom
- Organisations
- Rooftop Mortgages Limited
- Source quality
- Official source
- Last checked
- 2 September 2026
- Added
- 2 September 2026
What happened
A complaint brought through a claims management company about fees and charges added to a mortgage taken out in August 2006. Arrears fees, the cost of possession proceedings and unpaid direct debit fees had been added to the account. The Ombudsman upheld the complaint and required Rooftop to refund 31 monthly arrears management fees of £50 and six unpaid direct debit fees, totalling £1,685, and to rework the account to remove interest added to those fees.
What the borrower complained about
The complainant, through a claims management company, said the fees and charges added to the account breached the Unfair Terms in Consumer Contracts Regulations 1999, and that Rooftop had refused to refund fees and interest of over £9,000.
What Rooftop said
Rooftop's solicitors said the fees were not unfair and did not breach the Regulations, and that fees and charges had been applied in accordance with the account terms and conditions and Rooftop's tariff of charges. During the case Rooftop offered to refund 14 arrears fees and three further direct debit fees totalling £80.
What the Ombudsman decided
The Ombudsman recorded that the service takes account of a customer's terms and conditions but also considers whether the customer has been treated fairly, and that it is not fair to charge an arrears fee to a consumer in financial difficulties in a month when the monthly mortgage payment has been paid. She also found that where a monthly arrears fee had been legitimately charged, it was unfair to charge an unpaid direct debit fee as well.
Outcome
- Complaint upheld. Rooftop Mortgages Limited required, in full and final settlement, to refund £1,685 to the account and rework the mortgage to remove any interest added to those fees.
- £1,685 refunded to the mortgage account and interest added to those fees removed.
- Amount stated: £1,685
Charges recorded in this source
| Charge type | Amount stated | Outcome | Interest recalculated |
|---|---|---|---|
| Monthly arrears management fees (31 × £50, July 2012 – May 2018) | £1,550 | Ordered refunded to the account | Yes |
| Unpaid direct debit fees (six fees, August 2014 – December 2015) | £135 | Ordered refunded to the account | Yes |
Key extracts
“The question is whether it's fair to charge an arrears fee to a consumer in financial difficulties when he's paid the monthly mortgage payment. This service's view is that it isn't fair.”
Ombudsman, final decision DRN5725301
“Rooftop Mortgages Limited must refund to the account the arrears fees and unpaid direct debit fees set out on the attached schedule totalling £1,685 and rework the mortgage account to remove any interest added to those fees.”
Ombudsman, final decision DRN5725301
Why this record may be relevant
This decision concerns arrears fees, unpaid direct debit fees, and interest applied to fees.
Source
Financial Ombudsman Service, final decision DRN5725301 (Ombudsman: Jan O'Leary)
View original sourceThe date shown is the date stated in the published decision by which the consumer was required to accept or reject it. Rooftop did not consent to the service considering fees applied more than six years before the complaint was first raised on 26 June 2018.
If you believe this record is inaccurate or incomplete, see corrections and right of reply.