The Mortgage Code Register of Intermediaries is attacking IFAs for the first time with a threat to deregister 120 firms if they fail to prove they hold a consumer credit licence.
A valid consumer credit licence is a requirement of membership of the MCRI. If deregistered, a broker would not be able to place business with 98 per cent of lenders.
The Office of Fair Trading and the MCRI held a joint exercise to discover which firms are working without a consumer credit licence. They have still not heard from 120 firms. The MCRI has written to these firms demanding a reply by October 29.
It is threatening to effectively ban firms from doing mortgage business if they fail to reply.
Chairman Colin Harris says: “About 120 firms are not responding to our letters. This is a key issue. If firms have any concerns at all, they should check and contact the MCRI.”
Mortgage brokers are backing the MCRI's efforts.
MPI managing director Robert Clifford says: “I wholly support the move. The code is absolutely pointless unless it shakes up the sector and weeds out the unprofessional operators.
“The consumer credit license is an absolute minimum requirement to get involved in the advice process in the UK. Any firm unable to demonstrate it holds a valid licence is presumably acting illegally.”
London & Country senior manager Patrick Bunton says: “If these companies do not have a consumer credit licence, they should not be giving advice.”