News Article Published:
Friday, 17 August 2007
Category:
Financial Services
Twelve endowment mortgage providers, which might have thought they had got away without any bad publicity regarding a scandal, now face the Financial Services Authority (FSA) revealing their names.
After a review in 2001 found that 12 mortgage firms had "breached a contractual warranty and were guilty of "material pre-contractual misrepresentation in the sale of endowment mortgages", the FSA refused to name them, arguing that it was very bad publicity for the market.
It said that exposing these companies could affect future informal reviews and might possibly infringe the firms' rights, and since compensation was paid to customers, the providers did not need to be named and shamed in public.
Money Marketing magazine reveals that now, however, the Information Commissioner's Office says the firms must be named under freedom of information rules.
Independent Financial Advisers Defence Union chairman Evan Owen insisted: "The providers' dirty washing needs to be aired. How many complaints against advisers have been triggered by shortfalls which have been based on complete fiction?"
Compliance consultant Adam Samuel added: "The commissioner clearly disliked the FSA's way of conducting enforcement business behind closed doors. He is right. Public accountability is valuable as it helps regulators resist the temptation to make inappropriate compromises."
Bearing in mind that the revelation of the firms involved could affect hundreds of thousands of customers, the FSA is still considering its response before handing out a massive dose of bad publicity that could tarnish the whole market.
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