Claims management firm Cartel Client Review has warned that the misselling of self-certification mortgages is set to spark the next wave of controversy in the financial services arena.
The firm also hit out at financial services industry incompetence in managing the impact of the misselling of payment protection insurance (PPI) policies in the UK.
Commonly sold to the self-employed without any requisite proof of income, Cartel said the self-certification mortgage loans were a classic reflection of the financial services industry's focus in recent years on individual affordability, as opposed to underwriting on the basis of borrower income, when it comes to assessing mortgage loan risks.
Carl Wright, managing director of Cartel, said it had already seeing a steady trickle of fines being levied for self-certificated mortgage misselling but this was only the beginning.
He explained: "Once again the authorities are not publicly acknowledging the problem. But this is yet another hornets nest which, once stirred, is going to sting the reputation of the financial services industry as a result of governance shortcomings.
Wright said the lack of a structure enabling those with concerns to relay their views and seek immediate action to strike back at the misselling culture, was coming back to haunt the industry.
He concluded: "Until a suitable mechanism is put in place, fiascos of this kind are going to re-occur time after time."Mortgage Solutions
Risk to retail investors
Joined as head of strategy, multi asset, in June
Group income protection