The Financial Services Authority has ditched its plans to demand intermediaries insist lenders tell them why a mortgage application is rejected.
In a consultation paper produced earlier this year, the FSA stated it wanted intermediaries to ask lenders their reasons for refusing applications.
However, in a 168-page guide to financial crime published today (9 December), the watchdog admits advisers were unlikely to be able to do this as “a lender might want to withhold this information if, for example, they have suspicions about the intermediary.”
The FSA stated: “While we consider that sharing this information is a valuable fraud prevention tool, we acknowledge the difficulties faced by intermediaries seeking to apply this piece of good practice and have decided to remove it.
“We encourage lenders and intermediaries to work together to improve their information sharing.”