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Equality Act - Pregnancy / Maternity Discrimination(84 Posts)
Looking for some help, please....
I believe that I have been discriminated against by my mortgage provider on grounds of pregnancy / maternity. I am in the midst of their complaints process and will escalate to the Financial Ombudsman if necessary.
In short, the bank are refusing to lend me additional funds purely because my 'maternity pay' does not meet their lending criteria however if I was receiving my normal salary they would be happy to lend. Please shout if you disagree that this is maternity discrimination.
Anyway, the reason for my post is that I'm not sure what to do next. I could get the funds at a similar rate from another bank, so why fight my current lender? What do I gain? (Apart from, perhaps, influencing a change in policy so others don't suffer the same discrimination).
Sorry (on phone so struggling to type this), but I'd also like to know what the consequences are for my bank if they are deemed to have discriminated on the grounds of maternity? Would there be any personal gain to me in pursuing this car (aside from satisfaction!)
TBH, I don't agree that this is maternity discrimination. All they are interested in is whether you have enough money to make the repayments. And if your maternity pay is such that you don't, then they are within their rights to refuse. Same as they would if you had a low paid job and wanted tI borrow lots.
i'll be surprised if you win this. while any mortgage applicant can lose their income at some point in the future, I suspect that the statistical chance of that happening to women on maternity leave is much higher than for the general population at large, because they choose not to return to work. your mortgage lender will factor this in to their lending criteria. so whilst it is discrimination i would suspect it's justifiable - in the same way that insurance companies can discriminate when setting premiums for example.
i'd be interested to hear if anyone has experience of a different outcome. Sorry, it's probably not what you want to hear. But also bear in mind that no lender is ever obliged to lend to any borrower.
Is the bank's issue that you might not return to work from maternity leave so potentially would not have ongoing income? I guess they'd say the same if you were on long term sick leave, which would be the nearest male equivalent.
What proof do you have that you will return to work before your maternity pays tails off?
Thank you all for such quick replies - I love MN!
Without wanting to be ungrateful, or sound cheeky - can I ask if any of you are legal experts / professionals? The reason I ask is that I have done some significant research on the Equality Act, and have learnt that (and I quote...):
4.34: The Act protects women from discrimination because of their pregnancy and maternity in the provision of services.
4.38: The unfavourable treatment will be pregnancy and maternity discrimination if the woman would not have received the treatment, but for the fact that she is or has been pregnant.
4.40 (What does 'because of' mean? (ref 4.34)): Pregnancy and maternity needs to be a cause of the unfavourable treatment, but does not need to be the only or even the main cause. Example: A woman applies for a mortgage and lets slip that she is pregnant. She is subsequently refused a mortgage. She asks why and is told that the lender is concerned she may not be able to maintain repayments. Although the reason given for the refusal is her inability to maintain repayments, the cause of that assessment is her pregnancy and the refusal is likely to be pregnancy discrimination.
4.43: Another way to identify whether pregnancy and maternity is a cause of the unfavourable treatment is to ask 'but for the woman being pregnant of recently having given birth, would she have been treated in that way?'
My interpretation of this, in conjunction with my conversations with the bank are that they ARE discriminating against me. I do understand why some of you may think their 'discrimination' is sensible etc, but to the letter of the law it feels very much like discrimination.
I guess my main question is (assuming that the bank are discriminating against me) - what do I gain by fighting my corner? What are the consequences for the bank if they are found to have discriminated, and what good reasons are there for me to put all my energy into this fight rather than move to a more sympathetic lender?
Given that what has happened to you is pretty much what is in the case study, you could be on to something. Certainly prior to the passing of the Equality Act what you describe was pretty much bog standard behaviour from mortgage companies so it's possible yours simply hasn't caught up.
Why don't you try contacting the Guardian's consumer rights column and see if they'll take up your case? This sort of thing would be right up their street.
But from what you are saying, their decision relates to whether or not you meet the criteria in their Affordability Calculator. Presumably they will say any applicant who failed to meet the criteria would also be refused additional funds - regardless of the reason for that failure - or indeed their sex.
In other words, pregnancy or maternity is not the reason for the refusal. Low income is the reason.
OneTwo no I'm not legally qualified but I think you're asking yourself the wrong questions. You are being turned down for a mortgage because of a lack of provable long term income. Would this happen if you were a male? Yes. Would this have happened if you were a non-pregnant female on sick leave? Yes.
Sorry but I think you're determined to prove a case where there isn't one.
I disagree that this is discriminatory. You fail to meet their criteria. Your income is not above their threshold. I would imagine that if you received a generous maternity package that paid you enough to be above that threshold then they wouldn't care two hoots that you were pregnant. However, if they had said that you met criteria but were risky due to possible non return to work or losing your job that would be discriminatory.
What you are actually asking them to do is to positively discriminate in your favour on the basis of your pregnancy/maternity leave. That is, that despite failing to meet their affordability criteria, you should be exempted on the basis of possible future earnings once you return to work. I imagine their policy is black and white - you meet criteria at the time of application or not.
I am legally trained, and though not in provision of services, I worked in employment, which obviously uses different section of the same act.
I think you could struggle TBH.
If they were refusing because you might not return to work, that would be discrimination.
But what they are saying is that your income at present is such that they do not want to increase your lending (I note that this isn't them withdrawing a product you have, it's a refusal to extend). This isn't like the example- where the bank is jumping to a conclusion based on no information and simply because of the pregnancy. This is a concrete 'we are not happy that this would be a good idea on your current income'.
Why do you want to extend by the way - if you were on your full salary would you meet their repayment criteria? Presumably once you return to work, you will do so again?
Also, if you bring a claim in employment, you get compensation for actual financial losses, plus a bit for injury to feelings. That element in a comparable employment case (if you won) could easily just be a few hundred or couple of thousand pounds. I would hazard a guess a case in provision of services would be similar.
"I suspect that the statistical chance of that happening to women on maternity leave is much higher than for the general population at large, because they choose not to return to work. your mortgage lender will factor this in to their lending criteria."
That would be unlawful discrimination so no lender does this.
"All they are interested in is whether you have enough money to make the repayments. And if your maternity pay is such that you don't, then they are within their rights to refuse. Same as they would if you had a low paid job and wanted to borrow lots."
Exactly: this is not unlawful discrimination and so every lender may do this.
It doesn't matter what your reason for the failure to meet the criteria is, as long as the criteria is applied equally.
It wouldn't be correct to argue that the you would not have received that treatment but for the fact that you are pregnant. If on the other hand you met the criteria despite being pregnant or in receipt of maternity pay, and were refused because they didn't trust you to make future payments because of your pregnancy, you might have a case.
Again - thanks to everyone for their responses....
<muses about how wonderful a place MN is, and how I shouldn't bother asking elsewhere for advice / comment>
The reason I believe it's discrimination is because I have a full time, permanent job to which I intend to return (and the position / salary is guaranteed by my employer). As such, I think my lender should take my actual salary into account, not my current level of maternity pay. They are lending for 20/25 years, so why my short term (3-6 months) cashflow is more of a concern than my longer term financial plan doesn't make sense to me... (I have offered evidence of cash savings to cover the shortfall in my income, but the lender isn't interested!)
Olgaga / Fireover (and others) - the Equality Act states Pregnancy and maternity needs to be a cause of the unfavourable treatment, but does not need to be the only or even the main cause. IMO, pregnancy/maternity is the cause of my unfavourable treatment, as it's the cause of my temporarily reduced income. I have a guaranteed higher income to return to, which my employer will happily evidence.
If I had applied a year or two ago, then the lender would not know that I intended to get pregnant / go on maternity leave. Also, I (or any mortgage applicant) could resign as soon as funds are drawn down....
Interestingly, I have spoken to a couple of alternative banks, both of whom say that they would base lending on my full time salary, as long as my employer will write a letter confirming the date I will return.
I do think I have a case here, however suspect it will take some time to win this battle. As such, in all likelihood I will move to one of the alternative banks. I wonder if it's worth pursuing this with my current lender to:
a) force them to make a change so nobody else suffers this 'discrimination' (if they do eventually concede that they have discriminated)
b) to get some king of goodwill gesture / payment from them
c) to keep my mind active in the midst of maternity leave
Thanks again for your help and views - keep 'em coming!
Also.... From the Financial Ombudsman Service:
"Case Study 37/3 - sex discrimination
The firm refused to give Ms Y a mortgage, because she was pregnant. Nowadays all women have the right to return to work after maternity leave, and many do. So the firms practice was discriminatory on the grounds of sex."
Not quite the same, but similar??
OneTwo - The thing is, banks do make decisions based on your current financial circumstances .That is how they do it. I think your stuff about resigning, or getting pregnant a year later is a bit of a red herring to be brutally honest. I don't think any of that is relevant to your case - though of course it is relevant to the annoyance and frustration.
I do think you are perhaps getting so angry on this one that you aren't seeing the big picture. Take the fact that it is maternity pay out of the equation for one moment. You are an existing borrower who is asking to increase your borrowing at just the time you have reduced earnings. I suspect that is one of the reasons you are having an easier time with other banks - they are seeing this as simply 'customer on salary X wants to borrow Y', whereas your current bank are seeing potential warning signs. And banks are under massive pressure currently to lend responsibly.
On what you could get out of it:
1. You might get them to change their policy or 'retrain' people. You would most likely get that with a fairly formal complaint, but will not get it if you threaten legal action. The shutters will go down and you will get no concessions.
2. You might get a small amount. I got a couple of hundred from a bank who rather stuffed up my account. I would take the views of someone who works at a bank if they are reading this, but I'd be surprised if they do much bigger payments without financial loss.
3. There are better ways to keep mentally active! Get thee over to the feminism board or something!
<off to find a different battle to pick>
IMO, pregnancy/maternity is the cause of my unfavourable treatment, as it's the cause of my temporarily reduced income.
But they can argue that it's of no interest to them what the reason for your reduced income is. It is the temporarily reduced income in itself which is the reason. They would argue that anyone applying for an extension to their loan who was in a position where they were expecting a temporarily reduced income would be treated the same, because they would not meet the Affordability Calculation.
For example a man, about to go on reduced sick pay through an accident or illness, who would also expect to go back to full pay at a later date.
Anyway, I meant to say good luck with the baby! Plus I think the Financial Ombudsman is completely snowed under with PPI claims, so you would probably be in for a long wait. You might have achieved potty training by the time you get a response!
I think you have a case but there is no precendent so how successful you would be is unclear and you would have to go through the courts which is potentially costly.
I have a background in banking and a qualification that allows me to give advice on the Equality Act 2010. For the purposes of the law comparisons between women on maternity and sick people is a big no-no. This has been the case for quite some time and stems from EU Directives.
The simple question needs to be would you be given the service if you were not pregnant or on maternity leave? Yes or no? Income should be calculated from the employment contract, not the maternity pay which is short term. Lenders don't make decisions based on a customer's liklihood of taking maternity leave or going off sick at other times so making these decisions because someone is pregnant or on maternity leave is prohibited by the Act.
Op, I would suggest contacting a broadsheet's money section about your treatment. I think that would get you a better resolution than anything else because the negative publicity would be more of a concern to the bank.
OP why not get in touch with the Equality Advisory Service:
Celine, the relevant issue in the comparator I suggested was not that the person was sick. It was the fact they were on a temporarily reduced income.
I understand that but the cause of that reduced income is important.
Besides maternity is a tempory situation, unlike unemployment or another legitimate reason to decline.
Another thing that has just come to me, is that there is only a requirement for women to take 2 weeks compulsory maternity leave (4 if they are a factory worker) so reduced income cannot be expected because there is no reason to presume how long someone will take off.
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