Imminent changes in the way Irish Nationwide treats its mortgage holders follow representations to the mutual society by the Director of Consumer Affairs following complaints.

The director, Ms Carmel Foley, confirmed yesterday that her office had been dealing with a significant number of complaints from Irish Nationwide mortgage holders about high mortgage rates, "swingeing" penalty rates and a failure to provide adequate information.

"I have been concerned about some of the practices at the society and at the pattern of complaints, and have been closely monitoring them," she said. She welcomed the changes announced at the society's annual meeting this week and said she was "disgusted it has taken them so long to do it".

She expressed concern that lenders could act within the letter but not the spirit of consumer legislation and hoped "the new financial services regulator will be able to look at such situations" and will, as a matter of urgency, seek to have the Consumer Credit Act updated. She will "fully apprise the new regulator of concerns like this" when she hands over her responsibilities for credit institutions to the new office.

Welcoming Irish Nationwide's announcement that interest payments would be credited monthly to mortgage holders' accounts from June 1st, she said crediting interest payments on an annual basis was "totally unjustified". The change would mean a significant reduction in the amount borrowers would have to pay over the life of their mortgages she said, and she hoped it would be applied to all mortgage accounts. "There is no justification in discriminating between existing and new mortgages on this issue," she argued.

Irish Nationwide was unable to say whether the new arrangements would be applied to all mortgages.

On the society's decision that details of the interest rate charged would now be included in mortgage statements to borrowers, Ms Doyle said that, while consumer legislation did not specifically require this inclusion, she saw it as a basic piece of information borrowers were entitled to receive.

She said she was concerned about arrears' situations where conditions were imposed that involved the borrower "repaying considerably more than the cost to the institution of collecting the arrears".