Self-cert lender hits back at FCA

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Controversial self-cert lender selfcert.co.uk has hit back at the Financial Conduct Authority after the regulator urged consumers to be wary of dealing with the firm.

Selfcert.co.uk, which claims it has had to suspend lending due to high demand, is based in Prague and is doing business in the UK by using the Electronic Commerce Directive.

On 27 January, the regulator said self-cert loans had “caused harm to consumers in the past”, arguing this was the reason it decided to ban such loans as part of the Mortgage Market Review. They became known as ‘liar loans’ because they do not require borrowers to prove their income

It also warned customers that they would lose their UK consumer protection rights by taking out a loan from a foreign lenders, including the use of the Financial Ombudsman Service.

But Selfcert.co.uk has hit out at the FCA, arguing that borrowers should be able to make up their own mind as to whether self-cert loans are appropriate for them.

A statement on its website says: “The FCA have issued a statement about this site. Whilst we disagree with the points in it, we certainly think people should read it and decide for themselves. We are not anti-FCA in anyway and people should listen to them with an open mind.

“On the face of it they don’t actually disagree with anything we have said, they have however inferred things that aren’t true.

“When we get some time we will address these.”

However, there are doubts over selfcert.co.uk’s interpretation of the Mortgage Credit Directive and whether it can continue to offer these loans after 21 March.

The Mortgage Credit Directive is less strict on rules around creditworthiness and income verification than the MMR.

The directive merely states that the borrower’s income must be “appropriately verified, including through reference to independently verifiable documentation when necessary”, whereas the MMR explicitly states “a firm must not accept self-certification of income”.

An FCA spokeswoman says: “We wouldn’t comment on this particular firm.”

Selfcert.co.uk did not respond to requests for comment.