Equality Act - Pregnancy / Maternity Discrimination

[OneTwoOrThree]

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).

I just found this:

www.thisismoney.co.uk/money/mortgageshome/article-2117753/Families-home-buying-dreams-shattered-banks-tough-new-parents.html

I'd not waste any more time on your bank if you can get the loan extension elsewhere and you are absolutely sure it's something you should do. However, you might as well pursue it with the FSA anyway. But I wouldn't "bank" on getting anything out of it .

You should also bear this in mind:

"If you have been turned down for a credit card or loan, the worst thing you can do is to keep applying for more credit because any credit applications you make ? whether or not you?ve been successful ? will show up on your credit file. Several applications in a short space of time may make lenders think you are desperate for cash and this will damage your credit rating further. Your credit rating affects whether you can get credit, how much you can borrow and ? sometimes ? the interest rate you may be charged."

From here:

www.moneyadviceservice.org.uk/en/articles/what-to-do-if-you-have-been-refused-a-loan-or-credit-card

It is absolutely about the maternity pay and lender assumptions. If she were not on maternity pay and would have been given the loan that's discrimination. Maternity is not a permanent state. To make a lending decision assuming it is is wrong. The longest she could be on reduced pay is a year but it could be much, much less.

Plenty of women have babies and continue to pay the mortgage even on SMP or maternity allowance. Or in some cases nothing at all!

The OP has a permanent contract and no more expectation of non-return than anyone else. The lender is making assumptions based on her maternity.

From memory I think The Guardian have previously investigated lender discrimination related to maternity and some charities definitely have but I forget which (pos Fawcett society, maternity action, working families... Maybe CAB??). May be worth a look op?

Well Celine there was us all not realising the law on discrimination is so beautifully clear!

Is that really necessary? I'm fairly sure from reading back what I have written that there is no clarity because there is no definitive case law. We disagree - that's not unusual on untested points of law and is the whole basis of our court system.

I can totally see your argument Celine. I think the issue is whether a judge would say:

1. This is about the fact that the OP is on maternity pay, ergo it is about maternity/pregnancy; or

1. This is about the level of maternity pay the OP is on. Therefore it is not about the fact of being off, but the level of that pay.

I assume, btw, that there is no defence of justification available in this situation? I have assumed that is the case as it would be in the employment sections of the Equality Act, but I haven't actually double checked.

I also think, as I always advise anyone considering litigations/ombudsman complaints, that the OP needs to think really carefully about what she is trying to achieve. Because if she wants to get this escalated to someone in the bank who goes through the law with in house/external counsel and possibly changes policy, that needs a different approach to if she is after a small goodwill payment (and given the circumstances, a large payment is unlikely to be forthcoming).

"Income should be calculated from the employment contract, not the maternity pay which is short term."

But it would be uncommercial and irresponsible of a lender to give a mortgage to someone that could not afford the repayments in the short term. A lender could investigate whether the borrower had sufficient savings to meet the payments while income is reduced, but that would involve a potential minefield of enquiry and assumptions about dates of returning to work etc. which the lender is under no obligation to navigate.

That would be one line of defence for a lender. As you say Celine, it is not clear cut and no clarity has been added by any published case. Given that there are a number of lenders that are willing to lend on normal terms based on return-to-work salary there is little commercial incentive for a borrower to fight this, or public interest for their cause to be taken up by a representative body.

I don't think there is a defence of justification but I haven't checked recently either! I also wrote there is no idea of success rate, potentially costly and recommended contacting a broadsheet as ime that will be quicker and more successful.

I think there's a third scenario that could be considered along the lines of: is this an issue where the bank lends to other women who take or are likely to take maternity leave but have declined to provide the same service to this particular woman because she was on maternity leave at the time of application.

Of course I don't know the whole facts and I'm just pontificating but there's certainly enough existing law to try to make a case. If one had the money, energy and inclination.

I don't have reservations about Ombudsman route in same way as litigation because it's free but it can take an age and there's no guarantees.

Frankly I would be amazed if lending policy even mentioned maternity leave other than with instructions not to discriminate. I know it did in at least 2 of the 4 banks I have worked for but I've been out of banking for a while now and my career spanned several years.

Interesting debate :)

Agreed.

Sorry, I just realised that perhaps the last paragraph of my previous post wasn't that clear. When I said "I also think...", I meant I was agreeing with and expanding on what you said, not that I was disagreeing .

OP- if you do it, come back and tell us what happens!

Celine, it is because you said this: It is absolutely about the maternity pay and lender assumptions.

Whereas I am saying it is not so clear-cut. It's all very well ignoring the fact that the bank has an arguable case that it is about income level, but that will be their case. They will say that income which falls below the Affordability Calculator for any reason, whether the applicant is male or female, pregnant or not disqualifies the applicant.

This is not a case where the lender has assumed OP will not go back to work, it is about affordability. That's why couples who are having a baby are also being refused mortgages - as illustrated in the article I linked to above:

A drop in household income forced by most maternity leave periods can catch out couples who apply for a home loan when one partner is pregnant or on maternity leave.

There clearly are instances of discrimination against women in the provision of services, which should be properly pursued. I just don't think this is one of them.

As the article goes on to say:

A spokesman for the Council of Mortgage Lenders says: ?Lenders are expected to ask borrowers about, and to take account of, any ?foreseeable changes? (such as reduced income or increased expenditure) that the borrower knows may affect their ability to pay the mortgage.?

It's getting tougher for everyone to get any kind of loan. Today's clamp-down by Nationwide on interest only mortgages, requiring 50% equity, is another sign of the times.

Yes I understand that is your argument olgaga and I'm arguing a slightly different one. Until there is a clear case that sets out the argument both arguments' pertinent points are equally valid and it is my perogative, as it is yours, to state in the context of other posts points of that argument rather emphatically. To clarify, each of our arguments is clear cut within the rather fuzzy context of the law even though neither of us can be absolutely confident of how successful any of the arguments might be at the current time. I suspect we probably agree on that!

I am also very familiar with lending criteria, policy and the laws relating to that having been CeMAP qualified and FSA registered in a past life and involved in lending decisions and I still work in the industry albeit in a different role.

youlllaugh that makes sense :)

Hi OP - I have actually been in your exact situation and did take the case to the Financial Ombudsman on the grounds you mention under the Equality Act.

The lenders approach to me was discriminatory as I had sufficient funds to pay the mortgage during my maternity leave and they refused the mortgage on the grounds that I may not return to work. However, unfortunately after 2 years the Ombudsman decided against me and with discrimination claims you have to submit within six months.

I also participated in some research www.noreena.com/2011/11/banks-women-discrimination/ and the government promised an inquiry yes Lynne Featherstone looking at you but nothing ever came of it.

Wow! My longest MN thread to date , and what a debate!

Celine - my interpretation of the legislation was the same as yours, hence why I think I have a case. Whilst I'm up for the fight, realistically this will only be via complaint with the bank, the Financial Ombudsman, and perhaps the Guardian or other media route. I certainly don't have the money, nor would I want to spend any money taking this to the courts.

Olgaga - thanks for your input too. I hadn't considered this alternative view and now that you have explained it, I can see why the bank may interpret the legislation this way.

Ultimately, I am now in this for the sake of the 'fight' (as well as a slim hope of some financial compensation ). I have found another lender who sensibly is happy to use my salary as opposed to my current income, so there is no issue....

For clarity on the details.... The 'problem' lender is one of the biggest UK banks. I'm therefore somewhat surprised that they aren't erring on the side of caution in terms of their interpretation of the legislation (I work for a large financial services company who are scared shitless cautious not to inadvertently do the wrong thing). Interestingly, my new lender (assuming all goes to plan) is one of the other biggest UK banks.

Also (not that it should make a difference), the mortgage is in joint names with DH. His income + SMP is not enough to meet the lending criteria, hence why I need mine included. The request is for additional lending of circa 15% more than the current mortgage, and this would take us to and LTV of 65%. Furthermore, I have offered to evidence that I have cash savings to cover the shortfall in my income for the remainder of my maternity leave (up to the maximum of 12 months leave), but the 'problem' lender aren't interested. I suspect this is a "computer says no" situation. The lender didn't even take me through the full application - as soon as I declared my level of maternity pay they refused to proceed further, and told me to revisit when I returned to work at my normal salary (Celine - I think this is pretty concrete evidence to support maternity discrimination, based on your assessment of the legislation?)

So, where next? I've written my first complaint letter, and received a very bland (suspect it is a standard letter) response explaining that I don't meet lending criteria. I have written again, re-iterating that I believe their lending criteria is discriminatory and asking them to explain why they do not believe this is the case... I await their response... In the meantime, I'm going to move my mortgage to another bank.

Lastly (because someone asked), the reason I want/need extra borrowing is to to pay for an extension I have recently done on my property - bungalow attic conversion adding two bedrooms and and bathroom (required so that DC2 can have their own bedroom).

Thanks once again for your input / thoughts. I'll keep you updated as this progresses.....

BelleCurve - xpost...

Interesting, very interesting! Why did the Ombudsman rule against you, and how did they explain this? Also, who is it that a discrimination claim needs to be made to (within the 6 month window)?

Gosh. Given that Belle was one situation I thought would win- because it was based on assumptions about women maybe not returning- I would like to know too!

Also (not that it should make a difference), the mortgage is in joint names with DH.

Well I think that will actually make a huge amount of difference. I assumed you were on your own - I simply cannot see how you can possibly bring a maternity/sex discrimination claim as a couple!

The Ombudsman ruled that the bank (I'm guessing it may be the same one as our stories sound exactly the same) had not broken their lending policies and that their policies were not discriminatory.

At the time the research report was done, I gave an interview to the Times - but looking just now and the page has been taken down so can't link. It was a full 2 page spread. Plus I was invited on Woman's Hour to discuss it with the BBA but they backed out at the last minute.

I'm still furious about it now, even though I got the mortgage with another provider and all is well, so I understand the need to "fight the fight",

In order to complain to the Ombudsman you need to prove that you have been financially disadvantaged and claim an actual amount.

If you want to take the case to court under the discrimination legislation, ime it is difficult to find a lawyer who will deal with this type of complaint. Discrimination lawyers are mostly focused on employment law, not services. I have also tried various consumer associations, the Fawcett Society, the EHRC and complained directly to the FSA but with no success.

Given there were a number of women who participated in the research in a similar situation there was some initial talk of a kind of "class action" against the banks, but this really needs a sponsoring organisation and I haven't managed to find anyone who really wants to take this on.

But you wouldn't be bringing it as a couple. It would be discrimination against the OP because her contractual pay is not being factored in, only her SMP. Why in your view would it make a difference?

Belle - that is really interesting. Why didn't they think the policy was discriminatory. Or did they not give reasons?

I can totally see that there isn't the obvious well trodden path to claim in services situations. FWIW, I think the 'you might not go back' argument is dreadful, and far more clear cut than the OPs situation. In a comparable employment situation, you'd have a strong case and you'd easily get a lawyer who could help you file a claim in time. Awful the disparity.

Why in your view would it make a difference?

The decision doesn't relate solely to the ability of the OP to meet the Affordability Calculator. The mortgage is in both names - the affordability is their joint responsibility. If their joint income doesn't meet the affordability criteria, then they will be refused.

Get my drift? This is not a decision made on the basis that a woman is pregnant. It's a decision made on the basis that a couple don't meet the requirements of the Affordability Calculator.

But it is the treatment of the woman's pay that is making them dip below the threshold. If they had treated her pay in a way which ignored the maternity leave/pay, they would have met the criteria. As I say, I think the case is one that could struggle, but I don't think that the fact that it is a joint mortgage matters at all.

Are you a lawyer by the way (not a dig, just interested, and don't use jargon like 'justification' if I don't know I'm talking to a fellow legal bod).

The bank (and ombudsman) insisted that they were basing their decisions solely on income - which for the few months in question was obviously lower than usual. So from that perspective, they didn't consider it was discrimination.

In reality, they just didn't believe that I would go back to work. I have a handy transcript of the conversation if you can be bothered to read...

" Because I am on maternity leave you can?t count any of my salary in the calculations

Yes, yes What we generally do, I mean there is an official rule because obviously during maternity leave, you?re either on reduced salary generally or you?re on sort of state maternity pay er like benefit income and that would continue until you go back to work, which I believe is sort of February next year

Officially for a mortgage what we should be doing really is waiting until you?re back in work and we can see your salary back in the account as to the level we?d expect because we?re sort of signing off a mortgage for X amount of years, and until you go back to work, you know, on that certain date and that sort of salary and people obviously do change and reduce hours and drop salaries... And because, you know, obviously you?ve had children etc

In order for us to confirm for you know for definite what you are going to go back on, the official line is that we should wait until we?ve seen the salary at the level we expect, at that point we assess it, we can look at it a little bit in advance because obviously the fact you?ve been with us for a long time and you?ve already had mortgages with us which is what I was saying to X is we would ask for a return to work letter potentially sort of 3, 4 months before you go back to work which is towards the end of this year.

Which is nearer the time and hopefully would be sort of more definite sort of return to work generally...not...not...you might definitely be going back...

But generally as a rule sort of 3,4 months in advance is deemed the fact that if you were unsure you were going to go back or if there was a change in your details or whatever then hopefully it would have been sorted by then

Sort of 8, 9 months in advance is far too far really. Officially what we should do is wait until you are back into work and start seeing your salary but we can look at it a little bit because

But there is a legal obligation on my employer to give me the job back at the salary which I?m... I?ve got confirmation of my salary after I went on maternity leave. So there is a legal obligation on my employer to give me my job back at my existing salary

Yeah, yeah. I understand that part of it, I mean you don?t have to go back to work and you don?t have to accept the hours or the terms that you?re going back to work on. But because of the circumstances you are in...But we wouldn?t agree a mortgage on the basis that you are currently on maternity leave

My husband could ask to go on flexible hours or anyone else could ask to go on flexible hours, I don?t see why I am the one you assume is not going to be working?

Well we don?t assume but we would need to confirm it. Being on reduced pay, because you?re on maternity leave, which we understand, but we would need it sort of nearer the time to want that confirmation.

Jesus, that is shocking.

So the Ombudsman either didn't read that transcript or didn't accept it reflected the actual decision making of the bank? That would have been total death to an employment case defence!

Essentially though, it sounds like the argument they gave is exactly the OP's situation - they claimed it was about your then current income. That is worth knowing.