Thomas Reeh, chief executive of blackandwhite.co.uk, said brokers and lenders needed to look at what they were doing to migrate customers back to prime lending after they came to end of their deal. He said non-conforming customers needed to be actively helped as many were not as financially savvy as prime customers and ended up sitting on high standard variable rates (SVR).
Reeh said: “A lot of clients get into difficulties for innocent reasons. From a TCF angle, you have to look at the client’s situation when they come to the end of their deal and it should be a combination of both broker and lender input when doing this.”
He pointed to Mortgages plc as being one of the first lenders to recognise the issue with its credit repair product.
However, Jeff Knight, director of marketing for GMAC-RFC, said he could not see any issues of TCF if the product details were communicated clearly and were not misleading. He added: “The onus is on the lender to design a suitable product, so the client can rehabilitate themselves. In terms of customer contact, the only onus on the lender is if they deal with the client direct.”
Robin Gordon-Walker, spokesman for the FSA, commented: “A proactive effort to move people on from an SVR if they are being disadvantaged would be a really good example of TCF. But as long as the lenders haven’t treated their customers badly in the first instance, then TCF has not been breached.”
