Banks allowed to reject mortgage applications based on age, complaints institute rules

The financial complaints institute Kifid acquitted lender Florius of age discrimination in a complaint filed by an 82-year-old man who said the lender rejected his application for a mortgage increase because of his age. According to the Kifid ruling, the rejection wasn’t based on the man’s age and the ban on age discrimination does not apply to products and services.

The 82-year-old man had sold his house after his spouse died. The home sold for around 300,000 euros more than his remaining mortgage, but he needed some cash while he waited for the transfer to set up his new rental home. He, therefore, applied for an additional mortgage of 25,000 euros, but lender Florius rejected his application.

According to the man, when he was on the phone with the lender, the Florious employee asked for his age and immediately responded, “We can’t do anything for you,” when he replied that he was 82.

The bank denied this and provided a transcription of the call with the man in which the employee did ask for his age, but only to confirm his identity - age is one of the bank’s security questions. The transcription did not show that the employee said the bank couldn’t help the man due to his age. The man said that the transcription was from a call he had with the bank in the afternoon, and the incriminating statement came from a call he had with the bank earlier in the morning. But, the bank could not find a record of the call, and the man could not substantiate the claim further.

According to Kifid, the bank rejected the man’s application on the basis that a loan of 25,000 euros was irresponsible on his state pension income, despite the fact that he would soon receive some 300,000 euros after the transfer of his sold home went through. “The fact that the bank rejected the application based on the consumer’s income and, therefore, apparently adhered very strictly to its income criteria is admittedly annoying for the consumer, but that falls under the bank’s freedom of contract,” Kifid ruled.

Without substantiation of the phone call the man said he had with the bank, there is not enough evidence to prove age discrimination. Moreover, age discrimination does not apply in this case, the disputes committee ruled.

“Age discrimination is not prohibited when offering goods and services. The legal prohibition is limited to age discrimination in employment, profession, and vocational education and, therefore, does not extend to mortgage loans and other banking products,” the ruling states.