The FSA last week urged consumers not to stand for excessive fees levied by mortgage providers for going into arrears. It’s the first time an authority body has publicly gone on record to criticise the charges and leaves questions about whether or not this might open the floodgates for a surge in unfair mortgage arrears charges claims.

Essentially, the FSA has announced plans to better protect consumers from excessive charges and mistreatment by mortgage lenders. These plans will be implemented from June 2010. However, when quizzed about whether or not this opens up the possibility for people to make unfair mortgage arrears charges claims, the FSA spokeswoman added, “We want consumers to take a handle on the situation so if they think they have not been dealt with fairly they should definitely complain.” The Financial Ombudsman echoed this sentiment closely.

So it seems that the door is open for individuals to reclaim mortgage charges. And according to the Ombudsman, you can claim as far back as you like, providing that you make your complaint within 3 years of finding out that you can complain.

But how do you know whether the fees that you have been charged are unfair? Well basically, ‘excessive’ fees are deemed unfair. These are fees where you are charged significantly more than the administrative cost of your arrears. So, for example, say you are charged £30 for entering arrears on your mortgage but the cost to your lender is only £8 (admin fees for sending letter etc), then the charge to your is excessive. There is certainly scope for a reclaim here.

The other main area offering scope for reclaims is that of unfair charging. This includes lenders making arrears charges to customers already on a repayment plan, or charing ‘non-direct debit’ payment processing fees when no payment was even made! Additionally, including arrears in the total balance of the mortgage is also deemed unfair.

If you think you might be eligible to relcima unfair mortgage arrears charges, you are perfectly entitled tomake a complaint independently, first to your lender and, failing any progress there, to the Financial Ombudsman. Alternatively, you could contact a specialist company to contact your lender on your behalf if you are not sure of how to handle it yourself.