OFT weighs into cold-calling row

Mortgage intermediaries have been reminded by the Office of Fair Trading that cold-calling for leads for non-status customers is not permitted under its non-status guidelines.

Proposals from the FSA to bring cold-calling under plans for mortgage regulation have left some brokers unaware of existing limits on cold-calling, in particular the OFT ban on cold-calling non-status clients without their prior consent. The FSA attracted some criticism for including near-final rules proposing to outlaw “unsolicited real-time” promotions in the annexes of CP146, but the detail simply draws upon existing OFT guidelines.

OFT spokesman Mark Kram says: “The rules are quite clear as laid down in the guidelines for lenders and brokers in non-status lending released in November 1997. Brokers must be aware that there should be no cold-calling or canvassing off trade premises without the borrower&#39s prior consent.”

But some brokerages appear to have overlooked this rule. Ben Gould, general manager of Gillingham-based Equity Mortgage Finances, uses a telemarketing system and says he cannot be sure whether the guidelines are being met. He told Mortgage Strategy: “Even though we have a former MCCB inspector working for us, it is still hard to be 100% sure of what we can and cannot do.”

Paul Banfield, managing partner of Best Advice Financial Planning, believes cold-calling rules should have been included within the syllabus for the CeMAP and MAQ exams to increase awareness. Banfield says: “There is a lack of understanding on this issue and it would be a good idea for the FSA or OFT to clarify this grey area.”