Treasury plans to transfer mortgage complaint handling to the Financial Ombudsman Service could leave many borrowers without protection, warns the Association of Mortgage Intermediaries.
The AMI believes there is a loophole in the proposals so anyone claiming against a broker who becomes an appointed representative after N4 will not be covered by the FOS. The client's only recourse would be to pursue their claim in the courts.
The extension of the ombudsman's powers to include mortgage and general insurance complaints means that any complaints received by the Mortgage Compliance Code Board will now be transferred to the FOS.
AMI director Chris Cummings says: “We will be closely monitoring FOS activities in the mortgage industry and lobbying for our members. In particular, the FOS must judge complaints against current best practice rather than any subsequent reinterpretation of the rules.”
Consumers' Association senior policy adviser Laurence Baxter says: “We are very concerned by proposals to leave consumers with legitimate issues completely out to dry. All consumers should have access to redress, irrespective of where and when they bought their product. Consumers who bought financial products with the promise that they were protected have a right to expect this promise to be honoured. A Government decision to renege on this commitment will not only cost consumers dear, it will reduce consumer confidence even further.”