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Loan brokers still confused by promotion rules

The FSA says mortgage brokers are still confused about prom-otion rules over a year after their introduction.

In its round-up of the first year of mortgage regulation, the FSA says there have been mixed responses to the new rules from brokers.

Feedback from brokers shows that there may be some confusion over when a risk warning is required, particul-arly for lifetime mortgages. Some brokers are also having trouble understanding when a promotion must state an APR and other brokers are confused about whether charges or fees need to be shown in their promotions.

AMI policy officer Ben Staf-ford says: “We are still getting a lot of feedback from members who are confused by the rules for APR.

“It is very difficult, for example, for firms to work out what fees to show in generic promotions as their fees will vary. If the broker puts the wrong fee in the advert, they may be accused of misleading the customer.”

FSA head of financial promotions department Teresa Poy says: “We have seen positive and negative responses. For each firm raising a claim that regulation stifles their ability to advertise, we see examples of other firms working within the regulations with innovative and compliant marketing ideas.”

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