Another week, another fine. At the end of last week Hadlenglen Home Finance joined the list of those penalised for inadequate systems when recommending re- mortgages and PPI to customers (A £133,000 fine reduced from £170,000 for early payment), bringing the total number of final notices issued by the FSA this year to 103! This one had a personal as well as corporate sting in the tale as the chief executive got personally fined £49,000 (reduced from £70,000 due to early settlement) – the first time the FSA has fined a chief executive for re-mortgage and PPI failings.
Looking through the list of press releases from the FSA the story is pretty consistent – firms are getting fined for not putting in place the procedures to ensure clients are recommend the right product. Forget the FSA though – the fact that firms are still behaving this way is poor customer service and simply bad practice. With tools available to avoid this why does it still persist? Brokers can check clients credit position up front from companies such as Verifi, they can ensure efficient sales processes are in place using point of sale systems from numerous providers in the market including Crystal, Distribution Technology and Focus, and they can employ efficient T&C systems using solutions from the likes of Redland. Mortgage brokers also have a wider choice of sourcing systems than has existed for many years with a number of packager initiatives launched to compete with the established offerings from Mortgage 2000, Trigold and Mortgage Brain.
Some may question the affordability of these systems for the smaller organisations. However, if this is true it calls into question the survival of the smaller firms. If chosen carefully a cost effective solution can be put together – often with a cost that is spread in line with the level of business written – and given the size of the fines – both corporate and personal, can anyone not afford to invest in these systems!
