As revealed exclusively by Mortgage Introducer last week, the mystery shopping exercise of 82 visits or calls to 62 mortgage lenders and brokers showed 45 (55 per cent) of the firms did not provide the two key disclosure documents (KFI and IDD) to clients at the right time in the sales process.
In 23 assessments (28 per cent), the firm failed to provide an IDD or a KFI; in 12 assessments (15 per cent), the firm failed to provide both an IDD and a KFI; and in ten assessments (12 per cent) the firm provided the documents but not at the right time.
The findings also showed directly authorised brokers were more likely to provide KFIs at the right time over their appointed representative counterparts, while lenders were more likely to provide the KFIs at the right time than brokers.
Clive Briault, FSA managing director of retail markets, said: “These are disappointing findings. We will continue to monitor closely firms’ distribution of these documents through further supervision work.
“If we find some firms continue in these failings we will take this very seriously and the appropriate action will be taken, including enforcement action if necessary.”
The FSA also undertook a review of 20 mortgage lenders’ websites which showed two-thirds of the sites complied with some but not all of the requirements. For example, IDDs were not displayed or they were displayed but not at the right time.
