Mortgage firms fail mystery shop key documents checks

Mortgage lenders and intermediaries frequently fail to provide consumers with obligatory disclosure documentation according to the findings of a mystery shopping exercise conducted on behalf of the FSA in April and May this year. 82 assessments were carried out on 62 different firms, based on quick quotes and full interviews, face-to-face and over the telephone for lenders and only face-to-face full interviews in the case of intermediaries. In 23 assessments (28%) either an Initial Disclosure Document (IDD), which sets out the nature of the service, including whether advice will be given, or a Key Facts Illustration (KFI) of costs, features and risks of a specific product offering, was not provided. In 12 instances, (15%) neither document was supplied and in 10 (12%) the material was presented to the customer but at the wrong point in the sales process. Clive Briault, FSA Managing Director of Retail Markets, admitted that the results were “disappointing”. He noted that the regulator would continue to monitor firms’ distribution of disclosure information through its supervision work and persistent failures would risk enforcement action.