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Family matter

My father-in-law is nearly 80 and has never, lucky man, had a mortgage in his life. He even struggled with the idea of borrowing to buy property for his engineering business so you can imagine his surprise or even shock when he got a cold call last week trying to sell him a sub-prime loan.

In fact, it was even worse than cold-calling as it was an automated message enquiring whether he was having problems paying his mortgage, in his words implying that he did have a problem. The message then invited him to “press one” to speak to an adviser who would be able to help him.

Of course, I asked him which organisation was calling and he was too shocked to recall this. He will not be next time and then I will do the FSA’s job and whistleblow on the firm. While we are on the subject of our industry abusing the elderly, can you guess which top five lender is charging 12 per cent to my wife’s great aunt? You must be thinking she has terrible adverse credit but no, her only issue is that she is in her mid-90s and has a very old home equity mortgage. Hardly keeping to treating customers fairly, is it?

On a final note, you may all recall my sagas with car insurance from a few weeks ago. Well, having had my details passed to Zurich by Volkswagen Insurance, I have had my first renewal quote. You will remember that Volkswagen moved its branded offering from a broked to a single provider, without ever making this clear to their customers.

I specially declined the transfer of my data but the renewal reveals three issues with the transfer. First and most important, my data was transferred against my preference. Second, I am being provided with a non-broked, non-advised service, details of which are hidden in the small print. Finally the renewal premium has jumped by about 50 per cent.

Why this tirade? I am in favour of principle-based regulation but unless we come up with the tools to police the system, it offers less protection than a strict rules-based system. Regulatory control of such an environment relies on intelligent reviews of business practice as much as checking that the correct forms have been completed at the right point of the sale. The above examples of my family’s experience shows that big organisations are simply not adhering to the basic tenets of TCF.

I do not have magic solutions to all this but for certain I do know that these issues are closer to consumer protection than considering the impact of bird flu on the market. I support the FSA’s endeavours but we need to get much closer to protecting those most at risk in the financial services consumer world. Two of my examples above deal with areas where the elderly are being mistreated. With many believing that equity release is the next misselling scandal waiting to happen, perhaps it is time for the FSA to set up a specific review of how the elderly are treated by the whole financial services industry.

Mark Chilton is chief executive of Purely Mortgages.

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