FSA Reiterates Requirement To Treat Customers Fairly

FSA Reiterates Requirement To Treat Customers Fairly



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The Financial Services Authority (FSA) has continued to reaffirm its call for mortgage lenders to treat their customers fairly within today’s uncertain market conditions.

Having introduced a fresh programme of actions, the FSA hope to address the problematic areas by scrutinising the examination of charges while referring lenders to enforcement and supervision, finally putting to bed a series of lender bad habits.

The FSA’s latest findings, which analysed a total of 13 mainstream lender brands, discovered weaknesses in many of their methods in thematic work such as handling repossessions and arrears in recent months. Particular concerns were the visible neglect for taking customers circumstances into consideration and the eagerness in taking needless court action.

With the FSA focused on monitoring the effectiveness of its regulation of mortgage lending, whilst ensuring customers are treated fairly within the mortgage sector, the latest findings revealed that the number of consumers facing arrears and repossessions is increasing.

The FSA have utilised the feedback and have requested its firms to be flexible when considering customers’ individual circumstances and utilise court action as a last resort.

In a further review consisting of 18 lending firms, findings revealed that some lenders were failing to check income where there was reason to doubt the figure declared. Self certification was also being used without an adequate justification by the lender.

A variety of lenders proved vague in their policies used to assess customers’ ability to repay proving the catalyst behind the FSA’s referral of several of the guilty firms to enforcement and further remedial work

The quality of mortgage advice was evidently lacking, in this case 250 firms offering mortgages were reviewed. Following last year’s Quality of Advice project, which discovered severe faults in the advice processes, firms were re-assessed to discover whether faults had been amended and improvements had been introduced.

With seven mortgage advisors requiring referral to enforcement and 23 urged to review customer files, the FSA now has the tedious task of lecturing lenders in the art of appropriate lending.

FSA Director Lesley Titcomb stated, “As our data shows in these current market conditions more people are struggling to meet their mortgage payments and it is vital that firms treat them fairly. This means paying attention to their individual circumstances and not repossessing their homes when there may be an alternative solution. Repossession has to be the last resort.”

 

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