I have yet to work out whether Capital Mortgage Connections (CMC)’s fine was for cold-calling or the old chestnut of single premium mortgage payment protection (MPPI) being sold with little or no information given to vulnerable customers.
Whichever it is, I cannot help but think that the FSA has been very kind. As a small broker trying to build a post-regulation business, I get more than a little ticked off when I see that some firms are not put off cold-calling because the FSA does little more than bare its teeth when one of its main rules is breached. What sort of punishment is £ 17,500 when ‘an FSA investigation found that 85 per cent of CMC's business was generated by cold-calling potential customers. It also showed that over 97 per cent of ASU insurance polices sold by the firm were on a single premium basis.’?
I have no idea what level of business CMC were writing, but I would be surprised if £17,500 amounts to more than the commission from a handful of days’ cold-calling. No wonder, therefore, that some firms may be willing to take the risk. Where some petty criminals may see prison as an occupational hazard; some firms may see the risk of an FSA fine for cold-calling as a variable business expense.
Am I being melodramatic? Possibly. However, my wife and I have found ourselves on some form of marketing list which means that we get one or two mortgage cold calls a month – and that’s without the endowment claims companies’ calls. These are mainly from Indian call centres (including the one who told me he had ‘enjoyed’ my wife when I challenged him), but also include one my wife had from a well-spoken lady in London telling her that I may be restricted to a panel and besides, they weren’t cold-calling because my wife ‘must have ticked a box at some point’. When my wife tried to explain that we had not requested advice or given permission for someone to call and had certainly not been given her details before she called; the lady went on to kindly explain that my wife ‘didn’t know what she was on about’ before putting the phone down on her.
We all know what sector of the market some of these firms target; and I thought the FSA was there to protect the most vulnerable from the worst vagaries of our industry. Until the FSA starts making an example of these firms and withdrawing the authorisation of any firm found to have cold-called or to regularly used leads generated by cold-calling, it will continue, and I will get closer to booking an appointment with one of my regular callers.
Yes, I am jealous of your Ferrari and big wallet, but I am also sure that the regulator will have to crack down on cold-calling in a meaningful way before it can even begin to think about bringing in a principles-based approach to regulation. So, until it does and you join the dole queue: beware of any appointment booked by cold-calling for a hefty self-certification, heavy adverse remortgage plus insurances in East Yorkshire. It may just be an honest broker, jealous of your success, looking to share his thoughts with you in a frank, face-to-face fashion.
Michael Curran
Mortgage adviser
