The pilot study looked at six of the largest retail groups and reviewed their procedures at various stages of the product life cycle. It found that while senior managers said they were committed to the fair treatment of their customers, the systems and controls that the firms had in place didn’t always match up to the commitment expressed.
The research also highlighted concerns over the way advisers were remunerated and how this influenced the sale of products.
The FSA announced that a further study on the fairness issue is to take place between September 2004 and March 2005. However, it has confirmed that mortgage firms who become regulated in October will be exempt.
FSA spokeswoman Jackie Blyth, said: “We will still expect these firms to abide by the spirit of fair treatment.”
Ben Stafford, policy officer at AMI, commented: “AMI fully supports these studies as they will help the industry improve its standards and will improve our image in the eyes of consumers.”
John Ellis, head of public affairs at the LIA, commented: “This is exactly the sort of study that mortgage intermediaries must come to expect when they come under FSA regulation. The FSA is clearly intent on enforcing the policy of fair treatment.”
Bill Warren, network director of Complete Mortgage & Loan Services Ltd: said: “The FSA have done the right thing by not including mortgage firms in the September to March study.”
