Speaking at the Mortgage Business Expo in London today, FSA director of small firms and contact centre Lesley Titcomb also challenged the extent of dual pricing by some lenders, questioning why lenders bother to market some intermediary products at all as they are such poor value.
Titcomb also sounded a warning on mortgage brokers referring clients to claims chasers, cautioning that it could put them in breach of data protection rules.
Titcomb said: “This is also a good opportunity for me to dispel some of the myths that are out there about our proposals. Does anyone really think that we really want to stop self-employed people – over three million people – from ever getting a mortgage again?
“And do we really want to make all lenders ask their customers how much they spend on cigarettes and alcohol? The answer to both of course is no, but you could be fooled into believing otherwise by some of the comments we’ve seen so far.”
On dual pricing, Titcomb insisted it was a commercial issue and not an area where the FSA would intervene.
However she added: “Where an intermediary product is of such poor value compared to a direct product from the same lender, we question why lenders would continue to market that product.”
In a warning on claims management companies, Titcomb said: “One area where we have seen anecdotal evidence of business growth and poor practice is where FSA-authorised firms are introducing their customers to claims management companies.
“I would just like to say that if a claims management company approaches your firm, be careful. We have seen firms failing to consider their data protection obligations when referring customers without the appropriate consent, others failing to perform any due diligence on the claims manager they refer to, asking no questions about success rates, the average length of time to complete on a claim and refund policies where fees are taken up front.”
Titcomb said that in one case the FSA has seen, an intermediary referred a customer for claims management despite evidence being held on file indicating the claim was unlikely to be successful from outset.