The Association of Mortgage Intermediaries is urging all members to use its factsheet on financial promotions for sub-prime products.
This follows the Financial Services Authority’s announcement today that over 200 mortgage firms have been asked to withdraw or amend misleading financial promotional materials in the last year.
After reviewing the financial promotions of sub-prime mortgage brokers, visits were conducted by the FSA and wider problems have been found.
This has resulted in the regulator placing a number of firms into enforcement.
In its firm visits, misleading information found by the FSA in promotions included fee disclosure where the customer ended up paying more than the range of fees advertised.
FSA also identified the same firms selling sub-prime mortgages to customers where there was no evidence of impaired credit.
Earlier this year AMI published a factsheet for mortgage intermediary firms who conduct sub-prime business and issue financial promotions in this sector.
Rob Griffiths, associate director of AMI, says: There is a clear message coming from FSA in this action: it wants to see the standards of sub-prime mortgage financial promotions improve and improve quickly.
“Those firms who chose to publish uncompliant promotions can expect further action from the regulator.
“FSA are finding poor promotions as a sign of a wider problem in the way firms are managed and controlled and action is clearly being taken with those firms breaking the rules, not just in promotions but in other areas of their businesses.
The sub-prime promotions factsheet has been designed to give an overview of common errors on sub-prime promotions and how these can be addressed to help create compliant financial promotions.
” It will be useful for any members who are active not just in the sub-prime area but also in other non-conforming or specialist areas such as self-certification or right-to buy mortgages.
“AMI would advise all member firms conducting sub-prime mortgage business and issuing financial promotions to use this factsheet and review their procedures.