Mortgages and cold calling

A number of mortgage intermediaries are concerned with the proposed regime for qualifying credit promotions as set out in CP146 - The FSA’s approach to regulating mortgage sales. Philip Ryley, solicitor and John Virgo barrister look at the subject of unsolicited real-time promotions.

The regulatory requirements in respect of the financial promotion of mortgages are set out in the draft MORT rules, chapter 3, which appear in annex B of CP146. For the purpose of mortgage regulation, any financial promotion for the provision of qualifying credit will be known as a “qualifying credit promotion”. A qualifying credit promotion is defined as “any financial promotion (such as a brochure, advertisement, website or telesales call) which either refers to the provision of credit secured on land (whether by first or second charge) by an authorised firm, or relates to the advising on or arranging of such credit. The credit can be secured either in whole or part on land so, for example, it includes the promotion of a flexible mortgage that features an unsecured credit card.” This wide definition means that the financial promotion rules will apply to promotions for both regulated mortgage contracts, and non-regulated mortgages, such as second charge lending and buy-to-let mortgages.