Frank Thurlby, head of compliance at Genesis Home Loans, explained the frustration that prospective ARs are experiencing being left unable to trade while waiting to be issued with an authorisation number.
He said: “It is a frustrating time for ARs who have completed the paperwork and are just waiting to be able to work.
“The FSA has compounded this by granting 25 firms interim authorisation to trade even though their applications under new regulations have either been refused and are on appeal, or not yet approved.
“It seems like the FSA are sending out mixed messages.”
Interim authorisation has been created for those firms whose application has been refused or to whom a warning notice has been sent before 31 October.
This is to allow such firms to carry on doing mortgage business while disputed applications are determined through the usual channels.
Meanwhile Which? has critised the FSA stance over interim authorisation because the firms are not covered by the Financial Services Compensation Scheme (FSCS).
Laurence Baxter, senior policy advisor for Which?, said: “We put the FSA under notice to deliver regulations that would put the public’s mind at rest when it comes to making the biggest financial decision of their lives.
“Unfortunately it looks like the FSA has fallen at the first hurdle.”
He continued: “People receiving bad advice from companies with only interim authorisation, and therefore not backed by the FSCS, will not be able to claim recourse should these firms cease to trade (eg, their appeal is rejected) and things subsequently go wrong.”
Robin Gordon-Walker, spokesman for the FSA, said: “It’s a temporary measure. The rules require interim authorised firms to make it clear to consumers that they will not be entitled to compensation.
“Regarding a ‘mixed message’ it is unfair to compare firms who applied early enough and are going through the appeal process to others who have applied late and have to wait.”
