Brokers who contacted Mortgage Intoducer - News regarding our ‘Get The Facts Straight’ campaign said they were particularly concerned that KFIs require fees to be displayed even if a particular product or service was fee-free.
Peter Tatam, broker at The Best Mortgage Company, said: “I agree with your campaign concerning the KFI debacle. How on earth can it be correct that a KFI for a product offering free legal services must show a charge for that service?
“I have discussed the matter of legal charges shown on KFIs with Trigold and various lenders. They all say that the regulations dictate that a sample figure must be entered even if no charge applies. My response is always ‘How can the KFI be accurate in that case?’ but I can get no answer.”
He added: “It can be explained to the client but I can see the doubt in their faces when this happens. What happens when a client makes a complaint that their KFI is incorrect and misleading?
“This is preventing clients doing a clear comparison between products. If brokers produced illustrations that blatantly lied to the clients then we would deserve to be reprimanded but it seems fine so long as the FSA decree so.”
And Steve Herbert of Select Mortgages & Loans, said: “I do not feel that these new KFIs are honest especially when fees are shown as having to be paid on a fee-free product.
“The FSA would do well to have a broker from the field sit down with them to explore how compliance, convenience and service can work together on the KFIs. It looks to me as if they only meet large company spokespeople who just pay lip service.”
Robin Gordon-Walker, spokesman at the FSA, said: “Putting a sample figure even if it is fee-free was one the things we recommended. We are aware people have said it is misleading.
“We will be reviewing some sample KFIs and consulting with the industry to see what we can do to improve these documents.”
