Which EDR scheme for securitised loan disputes?

The Financial Ombudsman Service Limited (‘FOS’) and the Credit Ombudsman Service Limited (‘COSL’) have agreed on a process when one receives a complaint or dispute against financial service providers (‘FSP’) which may be more appropriately dealt with by the other scheme where the loan which is the subject of the complaint or dispute is part of a securitisation programme.

In a securitisation programme, the programme funder or servicer (also known variously as programme manager, fund manager, wholesale lender or wholesale funder) may be a member of one scheme while the securitisation trustee may be a member of the other scheme.

A complaint or dispute about a credit facility which has as its lender of record a securitisation trustee (‘securitised loan’) should, as a general rule, be directed by the scheme which receives the complaint or dispute to whichever scheme the programme funder or servicer (‘counter-party’) (or ‘white label’ lender) belongs to.

The complaint or dispute will be referred back to the scheme to which the trustee is a member if the counterparty is unable or unwilling for any reason to deal with a complaint or dispute which involves an application to vary or set aside a credit contract on grounds of financial hardship, an application to postpone enforcement proceedings, an allegation that that the loan or the fees are unjust or unconscionable or an allegation that the credit contract is ‘unsuitable’.

Special rules apply to a complaint or dispute received by it about a securitised loan under a PUMA programme funded by Macquarie Bank.

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