View more on these topics

Too much choice is confusing customers

Too much choice in the financial services market is a mixed blessing and is confusing consumers, warns the European Consumers Organisation.

Speaking at the European Mortgage Federation conference in Brussels last week, Jim Murray, director of the ECO, warned delegates that the complexity of financial services and consumer choice made it difficult for consumers to make rational and optimum choices.

He says: “If consumers knew the full facts of the choices on offer they would probably conclude they weren’t the optimum ones.”

Murray also says that educating consumers on financial services is not the answer and in most contexts is a cop-out.

He adds: “Preparing consumers is worth doing but in most contexts it is a cop-out. The notion of educating consumers on financial services, diet and medicine is not realistic.”

Murray criticises companies for trying to change consumers by turning them into financial experts and says they should deal with consumers as they are.

Murray maintains that he is not anti-education, but simply anti the education of consumers. He says if everybody was fully educated on the range of financial services available they probably wouldn’t buy half of them.

Specific areas of financial services that concern Murray include APRs on mortgage products and equity release.

He calls for more controls on features such as early repayment charges because as well as not being consumer friendly, they are also anti-competitive.

Murray adds: “Tie-ins are not always unjustified but they are anti-competitive and may be detrimental to consumers.”

Murray believes the equity release sector will continue to grow in the future, but he warns that it is a fertile breeding ground for “abuse and outright fraud”.

He adds: “This is a horrifically difficult area and could attract rogues that prey on vulnerable consumers.”


Lehman considering retention policies

Lehman Brothers has entered the retention policy debate by confirming this is something it is also looking at across its three brands.Simon Hinshelwood, managing director and chief operating manager of the investment bank’s European Capital Mortgage division, says that all sub-prime lenders should be considering its approach towards retention and looking to structure both its […]

Origo tool to boost firms’ security

Origo has launched the Unipass Control Centre tool to help firms improve their online security.The service enables users to track the progress of their members’ applications and view certificate status details online, as well as helps manage company leavers and the removal of their certificates.It can also be used to reissue lost or compromised certificates, […]

Money Partners completes fourth securitisation

Money Partners has completed its fourth securitisation transaction in the UK residential mortgage backed securities market. Totalling £600m, the transaction, called Money Partners Securities 4 Plc (MPS4), was issued by Kensington Group with The Royal Bank of Scotland and West LB acting as lead managers.For the first time, MPS4 comprises assets originated by both Money […]

72% Of brokers say there should be no age limit

Just 28% of Mortgage Strategy online readers think that lenders should impose a maximum age limit on mortgages. The overwhelming majority, at 72%, think it’s a bad idea. This week, Mortgage Strategy asks: “Do you think house prices will plummet in two years time?” Q: Should lenders impose a maximum age limit on mortgages?

‘How to…audit your auto-enrolment scheme compliance’

Avoid pension penalties with our auto-enrolment checklist

According to the Pensions Regulator’s annual commentary and analysis report released this month, 785 potential non-compliance cases were referred for investigation, with 23 auto-enrolment compliance notices issued. And they predict that the use of their statutory powers is only going to increase.


News and expert analysis straight to your inbox

Sign up