Data published by the Financial Ombudsman Service (FOS) showed that 92% of mortgage complaints about L&G which were resolved in the first six months of the year, were settled in favour of the customer. This compares to the industry average of 45%.
Stephen Smith (pictured), director of housing partnerships, Legal and General Partnership Services, said the majority of the complaints resolved in H1 this year related to a historic block of business written by a former appointed representative (AR) of the network.
The firm, which Smith would not name, had been operating a will writing service and adding the cost of the service to its clients’ mortgage balances. The firm in question also went into liquidation around three years ago.
Smith said: “A rogue firm caused a blip for us but is not indicative of the quality of ARs, in general, which worked with us historically.
“As soon as we found out about this we put a stop to it. Although the complaints show up in the mortgage statistics, they do not relate to the quality of mortgage advice being offered through the network.”
In an exclusive interview with Mortgage Solutions on the closure of L&G’s network earlier this year, Smith addressed the issue of legacy mortgage business.
Speaking at the time, Smith said: “Don’t underestimate the historic book you’ve got. We’ve arranged £65bn of mortgages through this network and we’ll be responsible until they run off. You won’t wipe out your costs [by closing a network]. You may reduce them but you’ll still need professional indemnity and infrastructure. It’s certainly not a cost-shedding exercise.”