This followed the announcement by the Financial Services Authority (FSA) that over 200 mortgage firms have been asked to ‘withdraw or amend misleading financial promotional materials’ in the last year.
This announcement comes following a focus from the regulator on the promotional materials of non-conforming mortgage brokers. After reviewing the financial promotions of non-conforming mortgage brokers, visits were conducted by the FSA and wider problems have been found. This has resulted in the regulator placing a number of firms into enforcement.
In its firm visits, misleading information found by the FSA in promotions included fee disclosure where the customer ended up paying more than the range of fees advertised. The FSA also identified the same firms selling non-conforming mortgages to customers where there was no evidence of impaired credit.
Earlier this year AMI published a factsheet for mortgage intermediary firms who conduct non-conforming business and issue financial promotions in this sector. It is available from the AMI website.
Rob Griffiths, associate director of AMI, said: “There is a clear message coming from the FSA in this action: it wants to see the standards of non-conforming mortgage financial promotions improve and improve quickly. Those firms who chose to publish uncompliant promotions can expect further action from the regulator. The FSA are finding poor promotions as ‘a sign of a wider problem in the way firms are managed and controlled’ and action is clearly being taken with those firms breaking the rules, not just in promotions but in other areas of their businesses.
“The non-conforming promotions factsheet has been designed to give an overview of common errors on sub-prime promotions and how these can be addressed to help create compliant financial promotions. It will be useful for any members who are active not just in the sub-prime area but also in other non-conforming or specialist areas such as self-certification or right-to buy mortgages. AMI would advise all member firms conducting non-conforming mortgage business and issuing financial promotions to use this factsheet and review their procedures.”
