Prescriptive rules mean too much information in key facts illustrations according to Beachcroft Wansboroughs Consulting.
Information over-load rather than length is the main problem with KFIs according to the financial services consultancy.
The independent analysis of 44 KFIs provided by 22 mortgage firms follows reports of excessively long illustrations.
The consultancy concluded that the objective of enabling borrowers to compare mortgage offers of the same type may only work to a limited extent.
The study also found the cost of a mortgage measured by the FSA’s concept of total payments per of loan may be confusing as it may give a different figure of the cost of the mortgage to APR.
Plain English was also an area highlighted to help improve KFIs.
Beachcroft Wansboroughs consultant Ian Reynolds says: “We believe the Conduct of Business rules could be amended to better meet the FSA’s objectives of settting out information that is ‘clear, fair and not misleading’ and remembering that it is key, rather than comprehensive information that is required.”