Feb 22 2005
The FSA has started a UK-wide crack down to protect homebuyers from unauthorised brokers who arrange and advise on mortgages illegally.
The FSA's 'perimeter' project team, which includes both supervisory and enforcement staff, is investigating firms which may be breaking the law by conducting mortgage business following the start of the regime on 31 October last year.
The list of firms being contacted is based on a number of sources, including the FSA's database of firms that registered or applied for authorisation, but then withdrew. The FSA is also reacting to leads received from the industry and the public.
Clive Briault, Managing Director at the FSA, said:
"Tracking down firms operating outside our regime is a major priority for the FSA. This is vital to protecting consumers since they do not have access to statutory redress and compensation if they deal with unauthorised firms. At the same time we urge consumers to check the status of the firm they are dealing with before conducting business. Details of authorised firms can be found on our web site."
"Additionally by cleaning up the industry we are making a level playing field for legitimate authorised firms. Unregulated mortgage brokers should act now and decide to get in the regime or stop that side of their business."
The FSA will not put firms out of business unnecessarily. Where breaches are inadvertent, or result from genuine misunderstanding, options for the firm will include obtaining proper authorisation. However, in order to protect consumers, the FSA can choose not to authorise firms that have wilfully breached the Financial Services and Markets Act and can take criminal proceedings if necessary.
A recent pilot scheme in Edinburgh and Glasgow included over 100 visits to targeted firms. The crackdown in other areas across the UK is now continuing.
Prospective customers can check that the firm they want to deal with is authorised by visiting the FSA Firm Check Service.
http://www.fsa.gov.uk/