Speaking at the Mortgage Business Expo in Manchester this week, Philip Riley from TLT Solicitors warned that small as well as large firms had to be able to demonstrate they had embedded principles six and seven from the FSA’s Code of Conduct throughout their businesses.
Principal six relates to TCF, while principal seven stipulates that firms must be ‘clear, fair and not misleading’ in their dealings with customers.
Riley said: “If the industry does not show it is responsive to the FSA’s requirements then it is inevitable that it will become more prescriptive in its approach.” He went on to describe this as the worst case scenario.
A key area where Riley advised firms to pay attention was in their numeration policies, where he warned that purely sales-driven targets could be construed as not in the customers’ best interest.
Broker firms were also told to take extra care over advertising and marketing. “Financial Promotions are a risk area for all of you,” he said.
While many small firms may consider they already treat their customers fairly, Riley said that mortgage firms would be under close scrutiny and were to some degree falling foul of scandals which had enveloped other sectors in financial services such as pensions, split caps and precipice bonds.
He went on to encourage firms to use TCF as an opportunity and predicted that those who were best at implementing it would in the long-term be the most successful commercially
