Edeus chief executive Michael Bolton believes the FSA is struggling to understand whether retention strategies conform with its principles on treating customers fairly.
Bolton says other contentious areas, such as payment protection insurance, are easier to understand and have been dealt with head on but the regulator has not yet got to grips with the relatively new phenomenon of mass retention.
FSA retail markets managing director Clive Briault, speaking to Money Marketing at last week’s Mortgage Business Expo, could not clarify whether the regulator has any issues with retention schemes or whether it could give them a clean bill of health.
The regulator has only previously stated that it is not about to start an investigation into retention but has not passed any judgment, saying only it is aware of the debate.
Bolton says: “Retention is not like flagrant misselling of PPI, which is easy to identify. Retention takes a lot more thinking through and I am not sure the FSA has got to grips with it yet and it has not given an opinion.”
Meanwhile, Woolwich has revamped its retention scheme so that it covers both regulated and non-regulated mortgages, as it previously only covered non-regulated homeloans. But a glitch means it will not be available for fee-charging brokers on retention cases until next March.
The Mortgage Practitioner sole trader Danny Lovey says: “It is pleasing to see that Woolwich is now doing the regulated side as well.”