The contract, which was introduced in 2003 but has since been updated, had four sections which the regulator believed gave the lender unfair discretion to change the terms of the mortgage during its term.
The FSA said that Woolwich had fully co-operated when asked to make changes and the lender insisted that few customers would be affected.
Emma Austin, PR manager at Woolwich, said: “It was not a widespread issue but the FSA investigated and asked us to make changes. This has resulted in a simple update to some historical terms and conditions, which we had already updated.”
Woolwich was asked to delete Condition 1.6 of its contract, which stated: ‘If your requirements or circumstances change for any other reason we may re-issue, revise, amend or vary your mortgage offer at any time before completion,’ as the FSA believed ‘this may be unfair as the term appears to give the firm excessive discretion to vary the terms of the mortgage offer unilaterally’.
The FSA believed Condition 4(3) of the Mortgage Conditions – Daily Interest gave the lender too much leeway over varying rates during the term and Condition 10.1 of the Mortgage Conditions gave it ‘excessive discretion to alter conditions’.
However, the FSA acknowledged the final two had not been used since December 2005.
