View more on these topics

MCCB voices concern over clarity in sales process

The Mortgage Code Compliance Board released its response to the FSA&#39s Consultation Paper 146 yesterday, outlining the proposed approach to regulating mortgage sales.

Drawing on its regulatory experience, the Mortgage Board has reviewed CP146, highlighting areas which it feels deserve comment. The Mortgage Board&#39s chief concern centres on the proposed introduction of a new level of service, “non advised sales using filtering questions”, which it fears could be perceived by consumers as offering some form of recommendation or guidance.

The Mortgage Board&#39s experience suggests consumers are often unsure as to whether they have received advice or information, and the Board believes that in the interests of consumer clarity, there should be a clear distinction between advised sales and non-advised sales – something that could be undermined by the use of filtering questions in a &#39non-advice&#39 sale.

The MCCB also suggests the proposed Pre-Application Illustration (PAI) should include a requirement for full disclosure of fees, commissions and other inducements which might be an influencing factor in directing the consumer to a particular product.

The body adds that the FSA&#39s definition of &#39Independent&#39 should have the same meaning across the financial services market and the phrase &#39whole of market&#39 in relation to research/sourcing should be dropped as potentially misleading. Firms providing advice should also be required to provide &#39reasons why&#39 letters, indicating to the consumer the reasons why the recommendation was made.

Though a useful way of providing comparative mortgage information, the PAI is not an adequate substitute for written confirmation of the reasons for the recommendation in the MCCB&#39s opinion.

Despite these criticisms, the Mortgage Board welcomes the FSA&#39s proposal to introduce transitional arrangements for those individuals who have met its own Fitness & Competence Requirements and give &#39due credit&#39 to firms of &#39good standing&#39 registered with MCCB.

Luke March, chief executive of the Mortgage Board, says: “We support the Government&#39s clear direction on the future regulation of the mortgage industry and welcome the opportunity to contribute from our own regulatory experience to the FSA&#39s consultation exercise on CP146.

“It is very important that customers clearly understand how the mortgage sales process works and the nature of the service (whether information or advice) which they have received, as this may affect their rights to obtain redress in the event of any future complaint.


The Mortgage Mole

Frying pan to fire? Sniggering and tasteless jokes all round at last Thursday&#39s Broomstick Ball, ably organised by Bristol & West&#39s Deirdre McManus in aid of Cancer Research UK. The auction – which raised £39,500 – was originally due to be hosted by TV scoundrel John Leslie, who inexplicably cancelled the booking last month. Kevin […]

Peter Burt to retire from HBOS

Peter Burt, HBOS deputy chairman, will retire from the group with effect from 6th January 2003. Burt, 58, has been overseeing the group&#39s integration process. A HBOS spokesman says: “The main elements of that process are now in hand, the senior management team is in place, branch integration is underway in Scotland and all the […]

Preferred Mortgages agree bridging-loan partnership

Preferred Mortgages has partnered with Cheval Property Finance Plc to offer bridging loans to provide intermediaries with access to interim funding for their clients with minimal formalities. The most common use for bridging finance is to assist people buying property before their present house is sold. Preferred believe this type of funding is much underused […]

Packager views on CP146 revealed by SPML survey

Southern Pacific Mortgage Limited (SPML) recently polled its packager base on the regulatory issues raised by CP146. Results were analysed in two groups: packagers dealing both with advisers and public, and those who only deal with advisers (a roughly 50/50 split). Regarding the pending December 31 deadline for adviser qualifications, the survey found that, although […]

Infographic - thumbnail

Infographic — health cash plans 2014

Health Shield has strengthened its position in the cash plan market, according to the latest Laing & Buisson report, increasing its market share by income from £27m in 2012 to £29m in 2013. The Health Cover UK Market Report 2014 revealed that the non-profit-making Friendly Society was the only provider in the top four to have increased its market share by income over the past year. Health Shield was also the only cash plan provider in the top four to have increased its market share by income every year for the previous five years. This infographic presents the figures.


News and expert analysis straight to your inbox

Sign up