Trade bodies to lobby MoJ on rogue firms
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The Association of Mortgage Intermediaries is joining forces with the Council of Mortgage Lenders and the British Bankers’ Association to try and put an end to unscrupulous claims firms.
The trade bodies are uniting to raise several issues with the Ministry of Justice and other organisations about what can be done to achieve better practice in the sector.
Robert Sinclair, director of AMI, says they are going to put pressure on the MoJ and possibly other bodies such as the Solicitors Regu lation Authority to stamp out bad practices by some claims firms such as sending out standard ised letters to brokers who have never mis-sold a product and charging upfront non-refundable fees.
Sinclair says: “The MoJ has limited re sources and is not necessarily de signed to grant firms authorisa tion as well as regulate them.
“There might be a better alternative, but that is something to be discussed further down the line.” The news comes as the Financial Ombudsman Service revealed last week that it upholds just 10% of all mortgage mis-selling claims made by claims management firms.
It is encouraging bor rowers to complain directly to it instead of paying fees of up to £500 that some claims firms charge.
A spokesman for FOS says: “Com plaints are typically being made about sales practices and whether the borrower could afford the mortgage.”
FOS says it is unable to specify what type of claims it is receiving on affordability, but says the firms’ websites make it clear what areas they are targeting.
Some typical questions claims firms ask is whether borrowers used a mortgage broker, took out a self-cert or interest-only loan or used a specialist lender.
A number of companies that specialise in mis-sold mortgages are advertising their services on the internet.
One claims: “70% of mortgage and remortgage agreements have been mis-sold in the last seven years.”
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