FSA to target poor Treating Customers Fairly firms

At the 2007 Manchester Mortgage Expo, Mortgage firms which have failed to meet the FSA's (Financial Services Authority) deadline on Treating Customers Fairly should expect a knock at the door from the regulator by the end of June 2007.

Head of mortgages and credit unions at the FSA, Mandy Spink, says the FSA will focus on companies it deemed "particularly poor" in its recent Treating Customers Fairly implementation results.

Small firms in general came out poorly following the March 2007 results, with only 41% meeting the FSA's deadline. However, small mortgage firms performed particularly badly, with only 22% of these mortgage companies making the grade. Major companies such as Northern Rock, Abbey Mortgages, Barclays Mortgages and Mortgage Express were not mentioned in the report.

Spink was quoted as saying: "We were a bit concerned about the slow progress of the small retail firms and particularly the small mortgage firms. Only 22% met the deadline, compared with 45% of general insurance firms and 52% of financial adviser firms."

Spink also says the FSA will be turning its attention to the sub-prime, self-certified and affordability areas of the mortgage market over the coming year and wants to not only measure the sectors more closely but seek improvement in them as well.

Spink continued: "We will be focusing on the areas of sub-prime, self-cert and affordability in 2007/8," she says. "Where sub-prime is concerned, we will soon be starting the second phase of our mortgage effectiveness review, where will be focusing particularly on firms' treatment of customers in arrears."

"On affordability, following our mortgage quality of advice survey, we would especially like lenders and advisers to apply the appropriate checks to make sure consumers can afford their mortgages."

"This is an excellent opportunity for firms to fully engage with us so together we can raise standards across the mortgage sector."