In the final Mortgage Market Review consultation paper the FSA proposes making the vast majority or mortgage sales advised to avoid customer confusion over whether advice has been given or not.
The FSCP is an independent statutory body set up to represent the interests of consumers in the development of policy for the regulation of financial services.
In its response to the paper the FSCP argues that advice would be unnecessary for the majority of mortgage customers.
Adam Phillips, chairman of the FSCP, says the new rules have gone too far and there is evidence the majority of consumers understand the process.
He says: “Consumers need honest and straightforward disclosure with clarity and transparency but if they have already bought a mortgage they should be able to do it again without being advised.
“The FSA is potentially confusing a request for information with advice and that makes shopping around and the buying process more difficult. The requirements should be limited to those customers who are credit-impaired, equity release, sale and rent back, right to buy and potentially first-time buyers. These are a group of people that may need advice but not the majority of people.”
Phillips says buyers who shop around could be forced to take advice two or three times before getting a deal.
He adds: “The seller will have to demonstrate to the FSA that it has advised the customer which is the problem with regulating advice.
“It’s a reasonable to ask about what the right amount of advice should be but for people with experience or remortgaging there is not much evidence that they were mis-sold.”