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AMI publishes promotions guidance in light of sub prime failings

The Association of Mortgage Intermediaries has launched its latest factsheet entitled Financial Promotions for sub-prime or non-conforming mortgage products.

It has been designed to give an overview of common errors on sub-prime promotions and how these can be addressed to help create compliant financial promotions.

Earlier this month the FSA published a progress update on its financial promotions work. The report also included information on the future direction of the regulators work, outlining a number of key areas it would focus on. One of these was the financial promotions produced by mortgage intermediaries, in particular sub-prime promotions from small broker firms.

In light of the upcoming focus in this area, AMIs factsheet covers the FSAs specific financial promotions requirements and outlines the common errors the regulator has uncovered in sub-prime promotions. These include: omitting or not using a correctly calculated APR plus the APR not being prominent enough; missing risk warnings or risk warnings which were inaccurate or not prominent enough; missing or incorrect fee disclosure information; and a lack of balance promotions listing the benefits but not the potential downsides.

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