Dear Mr Bakie, thank you for your email of 28 May regarding dual pricing in the mortgage market.
You had three points, which I will deal with in turn.
Firstly, I, and other FSA representatives, have made clear on a number of occasions that the FSA does not believe mortgage lenders are obliged to deal through brokers, and that the way lenders choose to distribute and price their products is a commercial matter for them. We will not be compelling lenders to do business through brokers. I do not believe there is anything further we can add on this particular point.
On your second point, we entirely agree that it is important for consumers to understand the service they are receiving. That is why Jonathan Fischel's recent speech at Mortgage Expo addressed this issue. He clarified what our expectations are of firms under current conditions, including clarifying to the consumer any limits to the scope of the firm's service. The speech was widely reported and is published here and on our website.
Thirdly, you suggest consumers who go direct to a lender may be sold inappropriate products or misunderstand the service they are receiving. A lender will need to disclose the level of service it is offering, in exactly the same way that a mortgage intermediary does. While we do of course take allegations of mis-selling extremely seriously, we do not have any compelling evidence to suggest that consumers are generally more likely to be mis-sold a product if they go direct to a mortgage lender. However, if you have any specific intelligence on mis-selling by a particular firm, then we would of course be interested to receive it.
To read IFAonline's letter to Hector Sants, click hereIFAonline
Duo start roles on 1 October
Where true value lies
Economy to thrive despite global risks
Behaviours, animals or something else?