Association of Mortgage Intermediaries director general Chris Cummings has warned the Financial Ombudsman Service against automatically importing misselling lessons from the investment market into the mortgage market.
The call comes after FOS principal ombudsman Tony Boorman told a Council of Mortgage Lenders’ event last week that the FOS would make “significant awards” against poor advice that would aim to put the customer back into the position they would have been in if the poor advice had not been given.
Boorman said: “We see cases where I find it difficult to imagine how the lender could have considered the customer capable of maintaining the required level of payments. It seems that the advice has been more about generating commission or fee income than a fair assessment of the interests of the customer.”
He told delegates in recent months the FOS has seen very high levels of mortgage complaints, with volumes twice what they were a year ago.
Boorman said: “Much as the stockmarket falls earlier in the decade helped expose misselling of investment products, so credit restrictions today will expose doubtful lending practices and poor customer service in the lending sector.”
Cummings says: “I am disappointed by the strength of the Financial Ombudsman Service’s comments, bearing in mind that the market has always been a low complaints’ industry. Putting the consumer back into the position they would have been in, what does that mean? It needs to be careful not to import lessons from the investment market.”
Editor’s View – see www.moneymarketing.co.uk