Under the Financial Services Authority’s (FSA) major thematic work plan on TCF, published in April, it is stated consumers should not face ‘unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint’.
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According to Simon Chalk, mortgage planner at Mortgage Portfolio Services, this means that lenders who withhold client data from the broker prior to remortgaging could be seen to be imposing an unreasonable post-sale barrier, and therefore not treating the customers fairly.
He said: “To my mind, if a lender doesn’t release any product data, or will only read the options available to my client from that lender over the phone, can I provide the ‘associated service both of an acceptable standard and as the client has been led to expect’, another point raised by the FSA over TCF? Surely not releasing the information is a barrier to getting the best deal for the client?”
Sue Anderson, head of external affairs at the Council of Mortgage Lenders, refuted the claim and insisted the FSA meant structural barriers in product design and distribution restrictions.
However, she admitted that the move towards principles-based regulation would see more challenges made on interpretation.
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“I don’t think the issue over client data falls under this but the wider and more important point is what do things mean in principle, rather than a prescriptive environment? It’s going to be imperative for the FSA to explain its statements as people can adopt views on principles to suit their own needs.”
Robin Gordon-Walker, spokesperson for the FSA, commented: “Every time we produce a document, it’s providing interpretation of the principles and the fact brokers are starting to ask questions shows they are understanding what we are trying to do. The ultimate test for TCF is whether, if you were the customer, do you think you have been treated fairly by the provider? It’s an interesting point and with principles-based regulation, it is an ongoing process where we are finding different interpretations as we go along.”
