FSA in TCF ‘mixed message’

Ramesh Sharma

April 1, 2006

Speaking at a Complinet Conference, Sarah Wilson, director responsible for TCF at the FSA, said the regulator would be taking enforcement action against firms not complying with TCF rulings. Targeting her speech at firms continuing to breach TCF guidelines, she said: “You are increasingly being left behind by competitors who are finding commercial advantage in putting consumers at the heart of their business; you will also find that the FSA has less and less patience with inactivity and starts to consider greater use of enforcement action.”

However, speaking at the Association of Independent Financial Advisers (AIFA) and Association of Mortgage Intermediaries (AMI) regional conference in London on 15 March, an industry source reported that Michael Lord, head of mortgages and credit union at the FSA, said TCF was not an enforcement action.

Danny Lovey, sole broker at The Mortgage Practitioner, was unsurprised with the FSA’s approach to TCF. He said: “It is not unusual for the FSA to give a mixed message and the move to a principle approach is evidence that the FSA realises it can’t make a rule for everything. Brokers don’t quite know where they are with regards to it, but I think the FSA should be able to enforce actions, especially with regards to exit fees, which clearly don’t treat customers fairly.”

Robin Gordon Walker, spokesperson at the FSA, disputed claims the FSA was providing a mixed message, and argued the central theme of ensuring a culture of treating customers fairly was apparent in both speeches. He said: “Breaches of TCF can be enforced and there may be specific breaches of MCOB, which can be acted upon. TCF is about changing the market culture to ensure everyone is treated fairly.”

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