West Brom launched its prize draw to win a ride on the Orient Express last week. In a press statement, the firm reminded brokers that the more applications they sent in, the more chance they had of winning.
However, this sparked concerns that by offering one entry per application, the incentive might unduly influence brokers to place business with the lender.
Ray Boulger, senior technical manager at John Charcol, says: “If you get one entry per application, that’s an inducement and has to be disclosed on a Key Facts Illustration.”
West Brom has now amended its rules to offer one entry per individual and it is also possible to write to the society to qualify for free entry into the competition.
Paul Marland, assistant general manager of intermediary sales at West Brom, says: “The original press statement was drafted prior to final approval of the terms and conditions. Upon validation, our opinion was that an entry into the draw for each application might not be within the spirit of the regulations relating to inducements.”
Chris Pearson, head of sales and marketing at BM Solutions, says: “All we are doing is supporting Trigold’s promotion to use the ETC link when submitting pre-sourced business. But we’ll be sitting down with it to discuss the competition rules with the intention of being even more explicit.”
Financial Services Authority rules state that a firm must take reasonable steps to ensure that it does not offer or accept an inducement or direct any business in relation to a regulated mortgage if it is likely to conflict with a duty that the firm owes its customers.