An industry mystery shopper has lifted the lid on unregulated brokers trading postMortgage Day, warning that many are flouting the law but remain undetected by the Financial Services Authority.
Ironically, he reveals some of the worst offenders are continuing to work right under the nose of the FSA, within a five-mile radius of its Docklands-based headquarters in London.
Since M-Day, the industry source has gone undercover into various brokerages to see whether they are complying with the FSA rules and he says he is shocked by what he has discovered.
The majority of advisers he spoke to, posing as a customer, had not even heard of the Mortgage Code Compliance Board, let alone the FSA. They were also unaware of the need for CeMAP or any other qualification.
The FSA says that it is looking at using a form of mystery shopping itself at some point in the future. However, the association says the fact a trader may be operating unregulated only five miles away is just a question of geography and that it will be conducting checks across the country.
Robin Gordon-Walker, spokesman at the FSA, says: “The whole point of regulation is to find out what might be going wrong and find a remedy for it. A form of mystery shopping is one tool that we might use in the future, under specific guidelines set by the marketing industry.
“We take notice of any complaints, but we haven’t got limitless resources and we have to prioritise.”