The Council of Mortgage Lenders has revealed its members have found Financial Conduct Authority supervisors have a tendency to adopt a “tick the box first, think creatively second” approach.
Sue Anderson, head of member and external relations at the CML, applauded the FCA’s efforts to tackle disclosure documents, inspiring lenders and providers to work with it to come up with alternative ways to highlight potential pitfalls of products to consumers.
However, she said despite the regulator urging providers not to be so ‘tick box’ and to think creatively, the FCA does not always practice what it preaches.
The CML was responding to the FCA’s communications paper, published at the end of last month, which stated consumers’ ability to make informed decisions is often hindered by information overload; a symptom of a ‘tick-box’ approach to communication.
The paper challenges firms to consider innovative ways of engaging with consumers about products and services, for example by using videos, infographics or other new approaches to present information clearly and in a way that is easy to understand.
Ms Anderson said she could see just how hard mortgage lenders are already working to deliver an enormous list of essential changes driven by absolute, non-discretionary requirements of regulation.
“I also understand why giving this initiative an optimum level of resource may struggle to compete for space in lenders’ already crowded worklists.
“Whisper it quietly - there is also the possibility that as a large organisation with multiple strands, the FCA’s own culture may not yet be entirely aligned to the message - we still sometimes hear some lenders telling us that their supervisors have a tendency to adopt a ‘tick the box first, think creatively second’ approach.”
She backed the discussion paper’s suggestion of “writing for the consumer first and then ensuring communications are compliant, rather than the other way round” as a challenge to the financial services industry that lenders are already rising to.
The current CML/Which? voluntary initiative to improve information and understanding on mortgage fees and charges may only be one step, but Ms Anderson added it is one that is going in the right direction.
“This is going to end up making it far easier for consumers to compare and understand different lenders’ mortgage tariffs, as well as making it easier to get a clearer picture of what they will have to pay and when.
“Squaring legal compliance with consumer-friendly communication isn’t easy - perhaps not as easy as the FCA implies - and the FCA isn’t the only outfit firms need to satisfy.”