Financial Regulation Roundup

Be wary of Self Cert Mortgages

FCA recently highlighted concern regarding lenders based outside UK offering self certification mortgages to UK consumers.

From 21 March 2016, all firms offering mortgages in the UK (including EEA firms) will have to comply with the Mortgage Credit Directive, which requires a thorough affordability assessment based on information that has been verified by the lender.

FCA have issued warnings regarding  firms based outside of the UK  offering self certification mortgages. The  concern is that borrowers taking such mortgages  will lose important UK consumer protection benefits eg right to seek redress from  Financial Ombudsman and the right to be treated fairly.

These firms are regulated only by the European Credit Directive and the firms can only contact customers on-line, not by telephone or post.  Such limited communication methods raises a concern   that borrowers will have limited means of seeking clarification.

FCA order Quick Quid & Pounds to Pocket to compensate almost 4,000 customers

Customers were provided loans that could not afford to repay and following FCA intervention Quick Quid & Pounds to Pocket have made changes to their lending criteria. For the 3,940 affected customers the following redress has been offered.

• 2523 customers will have their current loan balance written off
• 961 customers will be paid a cash refund of interest paid on the unaffordable element of the loan, and
• 456 customers will receive both a cash refund and have their current loan balance written off