FCA's new boss must ride into battle on behalf of mortgage prisoners and forgery victims - Greg Wright

His first job will be to clear up a mess which is not of his making. Mr Rathi’s first months in office will surely be dominated by actions to mitigate the impact of the coronavirus pandemic on the financial services sector.

However, as he prepares to take on the tough job of regulating the UK’s banks, there are two issues which are crying out for his immediate attention.

Firstly, he must flex the regulator’s muscles to ease the plight of around 200,000 mortgage prisoners. Many of these honest, hard-working people are at the mercy of so-called vulture funds, who seem to act with impunity.

The All Party Parliamentary Group on Mortgage Prisoners (APPG) has already written to the FCA to call for an immediate investigation into “price gouging” by unregulated funds and inactive lenders.

The APPG is calling for a market wide margin cap of 2 per cent above the Bank of England base rate on all mortgage Standard Variable Rates.

This measure would certainly provide immediate relief to homeowners who have been trapped on crippling interest rates for more than a decade.

One man who is a mortgage prisoner told me: “David is trying to fight Goliath, but David has his arms and legs tied. Some people must have lots of interests in our misery.

He added: “We are just ordinary people. Some of us get treated like common criminals. None of us have done anything wrong, it’s just that we all took out a mortgage.”

Earlier this year, the consumer rights champion Martin Lewis launched a campaign to provide justice for mortgage prisoners.

Mr Lewis, who founded the consumer website MoneySavingExpert.com (MSE), is supporting a study which aims to highlight the economic cost of failing to provide redress for mortgage prisoners, who are unfairly trapped in their current deal, often with an inactive or unregulated lender.

They are sometimes paying far higher rates than necessary. This group is rejected for all remortgages - cheaper mortgage deals elsewhere- because they don’t meet strict borrowing criteria brought in after the financial crash, even though they are keeping up with repayments.

Many mortgage prisoners have also told MSE that they face an “extreme emotional and physical burden”.

Yvonne Russell, who is another mortgage prisoner, said on Twitter: “I took my mortgage out with the market leader in 2007, Northern Rock, and because of Government bailout and their subsequent selling assets for profit I’m now labelled ‘bad-debt’ and can’t remortgage, yet I haven’t missed a single payment.”

The economic burden associated with the scandal is considerable. To quote the All Party Parliamentary Group on Fair Business Banking: “Think of the thousands of mortgage prisoners and business owners paying over the odds and having their cash funnelled offshore rather than keeping that cash in their pockets and spent locally.”

Secondly, Mr Rathi can also shine the light on a dark corner of the financial services world.

The APPG on Fair Business Banking has confirmed that its members receive “frequent and consistent” representations from constituents who are concerned about alleged signature forgeries in court documents involving the banks.

The group has given its formal backing to the Bank Signature Forgery Campaign. The campaign is supported by the Yorkshire Tory MP Kevin Hollinrake, who is the co-chair of the APPG, and has been alarmed by claims that business customers have been the victims of forgery.

This is a global problem. In the US, all 50 state attorney generals have already investigated the industrial-scale forgery of bank signatures on court documents in cases against customers.

By focusing on these two burning issues, Mr Rathi can show that he is willing to ride into battle on behalf of consumers and small businesses.

His reputation - and the FCA’s credibility - would soar overnight.

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