Alan Dring, sales director at eConveyancer, said business practices, such as recommending a particular solicitor or conveyancing firm as part of a mortgage deal, may be breaching TCF guidelines.
He explained: “There seems to be a bit of confusion about exactly what the FSA’s treating customers fairly approach includes. When brokers have to refer some business to solicitors, many intermediaries refer this business to local companies. In most cases the intermediairy will not get a fee for this service, but are these firms breaking TCF rules because they are not giving the borrower enough choice about what firm to use?”
Dring added that The Law Society has stated that the borrower should be presented with three quotes so that comparisons can be made, but these more often than not are from local firms that the broker has dealt with before.
He said: “They might get a better, cheaper, more reliable service from a solicitor a few hundred miles away, but they won’t be considered in most cases. I don’t think this practice is wrong, but there could be issues with TCF.”
However, a spokesperson at the FSA denied its TCF guidelines were being broken. He said: “TCF relates to regulated brokers and lenders, but not some of the other, unregulated functions that go with this. Roughly 25 per cent of all housing transactions are not as a mortgage, so these are unregulated by the FSA, so there are certain areas within the market where we do not get involved.”
