Santander UK invites borrower complaints Santander UK must contact more than 270,000 customers after the regulator said the bank had raised a cap for variable interest rates on mortgages in 2008 without properly informing borrowers. The Financial Conduct Authority said on Friday it had reached an agreement with the British unit of the Spanish group, under which Santander UK would contact customers to tell them about the information it had provided before the lender increased a cap on its mortgage standard variable rate more than four years ago, and invite them to complain if they have lost out financially. The SVR is the rate of interest that mortgage borrowers move on to after the end of an introductory deal such as a fixed-rate or tracker mortgage. Lenders are allowed to raise any cap they set on this but must clearly communicate the raised ceiling to borrowers. When Santander raised the cap it should have given affected borrowers clear information in easy to understand terms. But the letters it sent were not clear so borrowers may not have understood what was going to happen, how this was going to affect them and the options open to them," the watchdog said. It added that some borrowers had not received a letter at all. The body's predecessor, the Financial Services Authority, began regulating mortgages in 2004. The announcement comes at a time when banks are seeking to restore their reputation with customers after a string of high-profile scandals, including the payment protection insurance mis-selling debacle, which has cost UK lenders about £14bn in compensation to date. However, the FCA warned against the expectation of mass payouts, saying that the level of compensation would depend on whether customers could have moved to a better deal. "While a large number of people will be contacted, it is likely that only a minority of borrowers will be entitled to redress," the watchdog said. Whether borrowers have lost out financially will depend on the circumstances of their case. Santander UK said the move would potentially affect only certain customers. In November of 2008, its SVR cap was 2.5 per cent over the Bank of England base rate but this was raised to 3.75 per cent the following month. "This change did not impact all Santander mortgage customers at that time," the bank said on Friday. The majority of our mortgage customers would not have suffered any detriment as a result of any lack of clarity in the original communication in December 2008. It will start contacting customers from the beginning of next week until the autumn. More than a million homeowners were hit by rising mortgage costs in 2012, after Halifax, the Co-operative Bank, Bank of Ireland and Yorkshire and Clydesdale Banks all chose to increase rates. In March 2012 Halifax wrote to 400,000 borrowers to inform them that it was going to increase the cap on its SVR from 3 per cent above the bank base rate to 3.75 per cent. Additional reporting by Elaine Moore