FOS slams HSBC for over-40s snub

Sarah Davidson

April 13, 2015

The couple applied for a £250,000 interest-only mortgage over 18 years on their home, which already held substantial equity.

They were granted a decision in principle but HSBC pulled the plug on the deal because the husband would have been over-65 when it needed to be paid off.

The couple complained to the Financial Ombudsman Service on the grounds of age discrimination – and the decision was upheld.

Q&A with Martin Stewart of The Adviser Alliance

The FOS said HSBC’s decision to apply the policy wasn’t fair and reasonable and relied on “untested assumptions, stereotypes or generalisations in respect of age”.

HSBC was ordered to pay £500 to the couple for “distress and inconvenience” over the “unfair application of its age policy”.

In response, HSBC said: “As a responsible lender, we need to ensure our customers’ ability to repay the mortgage.

“With interest-only lending we also need to understand how a customer will repay the capital when the mortgage matures.

“Regulatory requirements to show responsible lending and the repayment vehicles associated with interest-only loans have become more stringent since this application was made. It’s important to stress that when we look at a mortgage application we take a number of different factors into account, which includes assessing each customer’s individual circumstances.”

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