March 13, 2012

Bank of Ireland mortgage deal not meeting FSA’s TCF rules

The Bank of Ireland has been accused of failing the FSA’s TCF (treating customers fairly) rules after a deal to pay their customer £1,000 to remortgage with another lender

Melanie Bien, director at Private Finance, said: “Brokers who have recommended that clients take out a deal with Bank of Ireland may now be regretting that decision.

“This is no level playing field: even if the broker gets a chance to talk to their client before the £1,000 cash incentive is offered, it will be very difficult to propose a better alternative.”

Matt Fleming-Duffy, a Bournemouth-based broker who quit Abacus Financial in May this year, was furious.

He said: “Straightaway, how is that treating customers fairly? Equally, as an industry standard that is pretty low. £1,000 is a heavy incentive forcing customers to use a particular broker. What would you do as a consumer? Say no to ready cash?

“It calls into question the whole transparency that lenders should adhere to and it doesn’t bode well for brokers if this type of thing goes on. For small brokers and IFAs client loyalty is their life-blood and this is more bad news.”

The deal between Bank of Ireland and London & Country was announced yesterday as a way to entice certain mortgage customers to remortgage with another bank. The issue arises as the deal is only available via London & Country, a no fees adviser based in Bath.

Yesterday Robert Sinclair, director of the Association of Mortgage Intermediaries, said: “Given the current difficulties encountered by a number of lenders which used to be in the mortgage market, it’s possible we’ll see more of these schemes trialed.

“AMI would ask that any lenders considering this approach first of all offer this opportunity to the broker who introduced the deal before packaging up and using a single other broker.”

This deal is not available to customers using mortgage comparison sites, their own brokers or going direct to a lender.

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