2015年4月13日星期一

HSBC rapped for age discrimination over mortgage application by couple in 40s



  • HSBC was ordered to pay £500 to couple for ‘distress and inconvenience’

  • The banking giant was criticised for refusing to grant the £250,000 loan

  • Bosses defended decision and argued it was ‘entitled to apply maximum age policy’





A couple in their 40s became unusual victims of age discrimination after their bank rejected a £250,000 mortgage application because it deemed the husband to be too old.


HSBC was ordered to pay them compensation after the banking industry watchdog found it ‘relied on untested assumptions, stereotypes or generalisations in respect of age’ in the case.


The banking giant was criticised for refusing to grant the £250,000 loan because the husband would have been over 65 when the 18-year-deal finished, according to The Sunday Times.



A couple in their 40s became unusual victims of age discrimination after HSBC rejected a £250,000 mortgage application because it deemed the husband to be too old


A couple in their 40s became unusual victims of age discrimination after HSBC rejected a £250,000 mortgage application because it deemed the husband to be too old



In the first case of its kind, the Financial Ombudsman Service found the lender guilty of being ‘unfair’.


HSBC was ordered to pay £500 to the couple for their ‘distress and inconvenience’ over the ‘unfair application of its age policy’, and was told to reconsider their loan application.


Bosses at the bank defended their decision and argued it was ‘entitled to apply a maximum age policy’, according to ombudsman documents seen by the newspaper.


But the ombudsman said: ‘The bank relied on untested assumptions, stereotypes or generalisations in respect of age.’


The couple, who do not wish to be named, applied for the joint interest-only mortgage over 18 years on their home, in which they held substantial equity.


HSBC had issued a decision in principle, indicating that they would be prepared to lend the money, but it then refused to proceed due to the husband’s age.


The husband, however, does not plan to retire at 65 and his final salary pension would be large enough to cover the monthly repayments.


He also has pension pots and his wife would have been able to pay the loan from her income alone, if necessary.


The couple complained and claimed they had been victims of discrimination. The complaint was upheld by the ombudsman - the first time it has done so specifically on the grounds of age for a mortgage.


HSBC said its decision was based on its age restrictions for interest-only loans, a type of mortgage that allows borrowers to pay off the interest but none of the capital.



HSBC was ordered to pay £500 to the couple for their ‘distress and inconvenience’ over the ‘unfair application of its age policy’, and was told to reconsider their loan application


HSBC was ordered to pay £500 to the couple for their ‘distress and inconvenience’ over the ‘unfair application of its age policy’, and was told to reconsider their loan application



The bank – like many other lenders - has tightened its criteria, and does not offer interest-only loans with a term beyond a borrower’s 65th birthday. For repayment mortgages, the age ceiling is 75.


The bank told The Sunday Times: ‘As a responsible lender, we need to ensure our customers’ ability to repay their 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.’


The ombudsman’s decision offers hope for borrowers who have struggled to get mortgages due to strict policies on age and income.











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