Mortgage advisers have criticised Lloyds Banks’ use of live webchat on a new online remortgage service saying it transforms the service from non-advised to advised and breaks Mortgage Market Review rules.
Lloyds Bank’s new execution-only service, announced this week, is aimed at making it more convenient for borrowers to remortgage, with the live webchat providing support by customer service advisers.
A spokesperson for the bank said the webchat service is there “purely to help applicants navigate the online forms should they have questions about the information being requested or the process itself before they submit an application” and does not provide advice.
But Ray Boulger, senior technical manager at advice firm John Charcol, argued a webchat facility would mean the lender is giving advice.
“When I saw that a webcam was included that struck me as being odd from a regulatory point of view and there is absolutely no doubt it would be an advised service,” he said.
Mr Boulger also criticised the 30-minute service, saying it was unrealistic and useless without a “basic” conversation.
“The danger for the consumer is that they might be saving a modest amount from these technologies, but may end up paying more through choosing the wrong products. I can understand what Lloyds are trying to do, but it’s not sensible.”
The Lloyds spokesperson said the webchat is managed by its customer service team, not by our mortgage advisers, so no advice would be given.
However mortgage brokers posting on forum Cherry remained sceptical about the development, with one calling it “a half-cocked system” with considerable manual interaction but unable to advance with a new client, a remortgage with a existing one or carry out a second charge.
Asked for the regulatory position on webchat facilities, a spokesperson from the Financial Conduct Authority pointed to the following guidance in its MMR PS12/16: “Online help facilities such as ‘adviser chat’ functions, where the customer can interact with an adviser while applying online, will involve ‘regulated advice’, if the adviser steers the customer to a particular product or range of products.
“If the interaction is merely to help the customer navigate through the process or provide generic advice or information, this would not be considered regulated advice.”