The Mortgage Business Plc · DRN-6189046

The complaint This complaint’s about an unregulated buy-to-let (BTL) mortgage that Mr A and Mr H hold with The Mortgage Business Plc (TMB). There are various strands to the mortgage; the summary below is taken from Mr A’s letter to us dated 11 October 2025, albeit in a slightly different order: • mis-handling of a data subject access request (DSAR) and phone call recording requests; • payments of compensation in June and September 2025 for service failures; • lack of clarity over a repayment plan and the non-provision of a statement; • failure to notify Mr A and Mr H when it instructed solicitors; • TMB refusing to capitalise arrears; and • the refund of historic arrears fees and charges. The decision to appoint LPA Receivers was subsequently added to the complaint. Both borrowers have joined the complaint, but all of our dealings have been with Mr A, on behalf of himself and Mr H, his business partner in the BTL venture. What happened The mortgage started in 2005; there have been periods of arrears over the years, which have then been brought back up to date. In 2017, we received a complaint against TMB that the mortgage had been mis-sold. We told Mr A and Mr H that we were unable to look at the complaint because it had been raised outside the time limits in our rules. In 2018, TMB carried out a remediation action that involved refunding some of the fees and charges that were debited to the mortgage account in connection with the aforementioned periods of historic arears. Since 2023, the mortgage had been in a more sustained period of arrears, as I understand it due to the tenant not keeping up with their rent. There was some initial dialogue in 2023, when TMB agreed not to take any recovery action, but there was then a gap in contact until July 2024. At that point, Mr A and Mrs H said the plan was to see the remaining seven months of the tenancy out and then hopefully get new, more reliable tenants. In October 2024, with no improvement, a field agent visit was carried out and Mr A and Mr H said they now planned to see out the tenancy and sell the property. Another field agent visit was carried out in March 2025, which established that the property was still tenanted, but the arrears were still getting worse. In May 2025, TMB instructed a firm of solicitors I’ll call A, with a view to appointing Law of Property Act (LPA) Receivers. There was a delay in informing Mr A and Mr H about the instruction of solicitors, but a letter before action was issued on 29 September 2025, informing Mr A and Mr H of the intention to appoint LPA Receivers. That happened on 7 October 2025, when a firm of Receivers I’ll call S was appointed. Meanwhile, throughout the second half of 2025, TMB received, and responded to, a succession of complaints from Mr A and Mr H about its treatment of them. These included

-- 1 of 5 --

but weren’t confined to, protesting the appointment of S and again saying the mortgage had been mis-sold at the outset. The case is with me now because our Investigator thought that TMB had dealt fairly with the complaints and taken reasonable steps to put right the mistakes it had made. Mr A and Mr H didn’t agree with that. What I’ve decided – and why I’ll start with some general points. We’re not the regulator of financial businesses, and we don’t “police” their internal processes or how they operate generally. That’s the job of the Financial Conduct Authority (FCA). We deal with individual disputes between businesses and their customers. In doing that, we don’t replicate the work of the courts. We’re impartial, and we don’t take either side’s instructions on how we investigate a complaint. We conduct our investigations and reach our conclusions without interference from anyone else. But in doing so, we have to work within the rules of the ombudsman service, and the remit those rules give us. I can’t consider the fairness or otherwise of the actions taken by the LPA Receivers, the fees they charge for the work they carried out, or the impact on Mr A and Mrs H of the Receivers’ decisions. The Receivers, once appointed, act for Mr A and Mr H, not TMB, and there’s nothing in the evidence provided that cause me to suspect that TMB was or is controlling or influencing S since the appointment was made. The rules of the Financial Ombudsman Service don’t permit me to consider the acts or omissions of a party acting for a complainant. For completeness, I note also that the alleged mis-sale of the mortgage has been raised again. This was brought to us in 2017 and we said then that we had no jurisdiction to look at that, because of the time limits in our rules. It’s standard practice that we revisit jurisdiction at each stage of our complaint-handling process. I’ve done that with regard to the allegation that the mortgage was mis-sold. I agree that it does fall outside our jurisdiction, but not only for the reasons we gave in 2017. Aside from being time-barred, as it was already by 2017, that element of the complaint falls outside the jurisdiction of the Financial Ombudsman Service for two other reasons. Firstly, the sale was not conducted by the business against which the complaint has been brought. TMB lent the money, but the sale of the mortgage was carried out by a third-party intermediary. Secondly, the activity of arranging or advising on unregulated mortgages doesn’t fall within the list of activities about which we can consider a complaint. I apologise that we didn’t make this clear in 2017. I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Mis-handling of a data subject access request (DSAR) and of phone call recording requests Generally speaking, complaints about DSARs are the preserve of the Information Commissioner’s Office, and I note that Mr A has expressed his intention to refer his dissatisfaction with the content and format of the DSAR product to that body. All I’ll add is that the DSAR seems to have been handled reasonably from a customer service point of view, and it hasn’t in any way hindered my consideration of the evidence when reaching my decision. Payments of compensation in June and September 2025 for service failures

-- 2 of 5 --

Where a business identifies that it has made mistakes or provided poor service, then admitting so and paying redress is the right thing to do. That’s what TMB has done here. Across the various complaints it dealt with during 2025, separate from the specific issues listed separately, TMB acknowledged a number of shortcomings in service, for which it offered £325 compensation in all. When assessing fair compensation for people’s time, trouble and upset there’s no specific calculation to work this out; everyone perceives things, and reacts to them, differently. One person’s minor annoyance is another significant and stress-inducing inconvenience. It’s all about the individual, and their personal circumstances. That’s why the guide we publish on the subject incorporates ranges rather than tariffs. Here, I have to keep in mind that the stress and/or upset Mr A and Mr H may have experienced during the period is primarily down to the underlying situation itself, rather than the service-related mis-steps on TMB’s part along the way. In that context, I think TMB’s offer is fair and reasonable in all the circumstances. If on further reflection, Mr A and Mr H wish to accept the compensation on offer, they should contact TMB directly. Lack of clarity over a repayment plan and the non-provision of a statement These are amongst the issues in the series of complaints TMB received and addressed in 2025, and which, in the preceding section, I found it had dealt with fairly. I can see that Mr A and Mr H continue to dispute the accuracy of the arrears figure TMB is saying they owe. We don’t audit mortgage accounts; it’s not a service we provide. If Mr A and Mr H believe there are mistakes in TMB’s accounting of their mortgage, it is open to them to arrange for the mortgage accounts to be audited by a suitably qualified and independent party. The evidence of the audit could then be used as the basis for a new complaint, but not as the basis for this one to be reopened. I make the latter point because TMB would need to be presented with the finished audit first, and be given the opportunity to consider and respond to it. Mr A and Mr H would have to meet the cost of the audit, albeit if errors were found that were to his detriment, we would then expect TMB to reimburse any reasonable cost of the audit as well as taking any corrective action the audit revealed to be necessary. Failure to notify Mr A and Mr H when it instructed solicitors This isn’t something on which I need to make a finding of fault. TMB has admitted the delay in notifying Mr A and Mr H that it had instructed A. It’s apologised, refunded the associated costs, and paid £100 compensation. In my view, that’s a fair and proportionate response, and no further remedy is warranted. TMB refusing to capitalise arrears Capitalisation of arrears is one of a number of forbearance options that a lender might consider offering a borrower in financial hardship. But it’s not something lenders are required to agree to; capitalisation increases the mortgage account balance and the contractual monthly payment (CMP) and lenders should not commit borrowers to higher payments that might not be affordable. So it’s an onerous concession, and lenders’ policies typically reflect that. I haven’t seen anything in the evidence from either party here to conclude that TMB should have had confidence in Mr A and Mr H’s ability to maintain the higher CMP that would result from capitalisation of arrears. Appointment of LPA Receivers

-- 3 of 5 --

I’ve already explained why, once the LPA Receivers were appointed, any act or omission on their part falls outside the jurisdiction of the service. But I can consider if TMB was justified in appointing the Receivers. Overall, I think it was. The mortgage had been in arrears for quite a long time, the amount of the arrears was rising rather than falling, and the plans Mr A and Mr H had previously told TMB they had to resolve the situation showed no signs of coming to fruition. It’s important to remember that the mortgage, as a BTL is unregulated; it’s a commercial transaction between two corporate entities. An enterprise engaging in commercial activity, such as Mr A and Mr H are doing here, is held to a higher standard than a consumer, and is not covered by the regulatory protections that apply to residential mortgage borrowers. The refund of historic arrears fees and charges As I set out in the summary, TMB debited fees and charges for arrears management during the early years of the mortgage. It also carried out a remediation exercise in 2018, resulting in some of those historic fees and charges being refunded. As Mr A and Mr H were made aware of the fees and charges, and the remediation exercise, when they happened, all of these events fall outside the normal time limits in our rules. That said, the relationship between Mr A and Mr H and TMB is ongoing, so I can consider whether the historic fees and charges resulted in a relationship that’s currently unfair or not. No fees or charges for arrears management have been debited in the six years immediately preceding the start of the complaint; i.e. since August 2019. There have been solicitors’ costs (later refunded in any event) and LPA Receivers’ costs. In neither case can I find that the circumstances didn’t justify those charges being debited. Insofar as arrears management fees and charges debited before August 2019 might have introduced unfairness into the relationship, I have to consider that TMB took steps in 2018 to remedy any possible unfairness that may have existed. I also have to consider that Mr A and Mr H were aware of the fees and charges at the time. They don’t appear to have taken any steps to mitigate any possible unfairness the fees and charges might have created, for example, complaining about them, earlier than they did. Putting all of the above together, I’m not persuaded that the actions of TMB’s complained of here led to a relationship which is currently unfair between Mr A and Mr H and TMB. Overall, I can’t fairly require TMB to do anything further regarding this. That begs the question of what happens next. I don’t know what TMB’s intentions are regarding enforcement of its security over the mortgaged property. But clearly that is something it can consider as a next step. It’s important to explain here that lenders will generally agree not to pursue recovery action whilst we look at a complaint, but they don’t have to and we can’t force them to. If the Financial Ombudsman Service had that power it would undermine our impartiality between the parties to a complaint. It would also create the potential for complainants to use our service to bring complaints with the intention of having any legal action put on hold, thereby obstructing businesses that were trying to take action through the courts to recover money legitimately owed by the complainants. I do not wish to alarm Mr A and Mr H but I would not want them to be under any misunderstanding that we would tell TMB that it must delay recovery action in the event of any new complaint being raised about the mortgage. It is a matter for a court to decide whether it is appropriate to adjourn or suspend any legal action, not this service.

-- 4 of 5 --

I know this isn’t the outcome Mr A and Mr H wanted. They are faced with the prospect of having losing their investment property (either by selling it themselves or TMB enforcing its security). It might help them to have some advice from an independent financial adviser to discuss their options. My final decision My final decision is that I do not uphold this complaint or make any order or award against The Mortgage Business Plc. My final decision concludes this service’s consideration of this complaint, which means I’ll not be engaging in any further discussion of the merits of it. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A and Mr H to accept or reject my decision before 6 April 2026. Jeff Parrington Ombudsman

-- 5 of 5 --