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Mystery shoppers will be used in crackdown

The FSA will mystery-shop mortgage firms and lenders following regulation of the sector.

Managing director (retail markets) Clive Briault told the CML
conference that an early priority for the FSA will be to enforce the
new regime and crack down on any firms which are carrying out
unauthorised mortgage business.

He said the regulator expects to use mystery shopping to establish
whether consumers have access to the right documentation at the right
time, with appropriate explanation during the advice process.

Briault said: “We will pay close attention to high-risk areas such
as lifetime mortgages, sub-prime lending and debt consolidation. We
will be visiting some firms to review their marketing strategies in
these product areas.”

Savills Private Finance director Simon Jones says: “IFA firms should
have expected this. The FSA will be checking that advice is being
given correctly to customers. If the FSA picks up things that need
changing or recurring trends, it would surely be a help to the
industry.”

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