GMAC, one of the largest mortgage lenders in the UK who focused on residential property loans, now face the prospect of £10 million in fines. The property lender is being accused of overcharging its clients and now will have to make amends by returning a staggering £7.7 million in interest. According to the Financial Services Authority, the clients were forced to pay extra under unreasonable circumstances.
The FSA claims that GMAC went ahead with repossession procedures much before exhausting all alternative options. Some clients were charged unreasonable fees and interest despite of having successfully made payments on their loan. Those who were unable to pay their balance, their cases were forwarded to solicitors.
The FSA found that GMAC botched up the proper assessment of the financial situation of clients with outstanding debts, before looking for alternative payment solutions.
GMAC now has to pay £7.7 million to mortgage holders, apart from a separate fine amounting to £2.8 million. The mortgage provider will be required to also pay interest on the sum returned to consumers, so the £7.7 million amount will only end up being higher.
This ruling is sure to impact residential landlords and regular homeowners as GMAC has lent more than £12 billion each year to these two groups.
