Mark Chilton, Chief Executive of Purely Mortgages comments, “Whilst it is very encouraging that the FSA is taking its role of regulating the mortgage industry seriously, we feel there are additional ways in which the FSA should tackle the problem of unauthorised mortgage brokers.”
In its statement the FSA says that in identifying unauthorised brokers, it will focus on its database of registered brokers and leads from industry and the public, in the meantime consumers are inadvertently using unregulated firms who continue to advertise illegally for their mortgage advice or borrowing.
Chilton adds, “Too much of the FSA’s proposed crack down is reliant on whistleblowers to expose bad practice. The focus is also too far down the mortgage process which is too late for those customers who are still inadvertently taking out mortgages through unauthorised intermediaries and thus not gaining the protection of the compensation schemes available to customers of authorised brokers.
“If the FSA is committed to cracking down on unauthorised mortgage brokers their attention should be on advertising, specifically online adverts and the classifieds. Anecdotally we believe that over 50 % of customers use the internet as a source of mortgage information but I’d say that around 90 per cent of all online-mortgage advertising is non-compliant. If the FSA clamped down here they would rapidly uncover further unauthorised sales rather than waiting for us in the industry to complain.”
