The regulator may intervene to prevent lenders adopting aggressive dual pricing strategies, according to the Association of Mortgage Intermediaries.
Last week the Financial Services Authority warned in its Retail Conduct Risk Outlook that funding pressures may trigger a return to the hard-hitting dual pricing strategies seen in 2008, threatening brokers’ business.
Robert Sinclair, director of AMI, says the FSA could take action to stop these strategies but first it would have to decide whether they are detrimental to consumers or merely commercial decisions.
He says: “The regulator has to ask whether lenders are forcing customers to use a particular channel and whether they can justify the price difference between products offered through different channels.
“If they are making excess profit by offering a certain rate direct, that would worry the FSA.”
He adds: “The FSA has highlighted dual pricing as a potential problem it may need to deal with in the future.”
In its Retail Conduct Risk Outlook the FSA says competition from lenders’ direct sales is one of a number of challenges brokers face.
It says: “Survey findings suggest that the persistent uncertainty in market conditions continues to have an impact on intermediaries. This reiterates concerns that developing and maintaining a sustainable and compliant business model will likely remain challenging for mortgage intermediaries, particularly for network models.”
Fahim Antoniades, group director at Mortgage Centre IFA, says dual pricing is a major threat to brokers.
He says: “Dual pricing has been creeping back over the past 18 months or so. While it is difficult to say whether the problem will get worse, it is certainly not going to go away, so brokers will have to adapt to this threat and ensure they are promoting the value of the service they offer.”