High-pressure SARB sales tactics face ban
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The Financial Services Authority is to ban cold-calling and high-pressure sales echniques in the sale-and-rent-back market under guidelines to be introduced on June 30.
The FSA has adopted a two-stage approach to regulating the SARB market. It implemented an interim regime in July 2009 and the second tier of regulation will come into force in June this year.
The FSA will ban exploitative advertising and high-pressure sales techniques, and prohibit the use of emotive terms such as ’fast sale’, ’mortgage rescue’ and ’cash quickly’ in promotional literature.
It will also introduce a 14-day cooling-off period and ban firms from dropping promotional leaflets through letter boxes.
Furthermore, firms will have to follow rules that ensure consumers have security of tenure for a minimum of five years and will be expected to introduce affordability and appropriateness checks.
Adam Phillips, chairman of the Financial Services Consumer Panel, says: “The FSA must police this area thoroughly. We still have worries that some firms will exploit consumers both within the rules and by trying to work outside them.
“The fact that only around 80 firms have applied for FSA authorisation shows it must monitor the boundary carefully.”
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