Lenders withdrawing rates with only a couple of hours’ notice is “not fair on consumers or on brokers” and goes against consumer duty, according to brokers.
A poll on LinkedIn, run by R3 Mortgages director, Riz Malik, asked brokers if same-day product withdrawals align with the spirit of the consumer duty.
In response, 97 per cent of the broker respondents said it does not.
Yellow Brick Mortgages managing director, Stephen Perkins, said there are no excuses as to why lenders cannot give appropriate notice.
“Lenders should be able to announce rate withdrawals before 10am and give brokers until the close of play the same day to a minimum to secure those rates.
“Giving notice at 4:30pm that products are being withdrawn at 5pm is not acceptable.”
Malik added: “I thought we had seen the back of same-day product withdrawals in 2023 but we still have it happening today even when the markets are a lot less volatile.”
He said this was not in the spirit of consumer duty nor can it be justified by lenders.
Lodestone Mortgages and Protection director, Craig Fish, agreed saying that giving anything less than 24 hours notice is “irresponsible” and goes “completely against” consumer duty.
“Consumers are being put in a very dangerous position, and are ultimately the losers,” he added.
“However this is purely lenders passing the book, and I can foresee lots of ambulance chasers in the future based purely on this lack of time to make an informed decision.”
Meanwhile, EHF Mortgages managing director, Justin Moy, gave some insight into the lenders’ reasoning for this, saying market conditions was the usual excuse for late announced price changes.
However, he argued this doesn’t reflect the spirit of consumer duty.
“How can any mortgage broker have a chance to deliver on consumer duty if lenders can railroad that belief with 3pm emails for a 5pm product withdrawal?” he asked.
Additionally, Lawson Financial director, Michelle Lawson, pointed out that brokers have been “fighting for consumers” about short notice period withdrawals for months.
“Considering consumer duty is about putting the customer at the centre of the transaction, putting pressure on a borrower to make a decision when products are withdrawn with little or no notice cannot be seen as complying with it whichever way you look at it,” she said.
The Mortgage Stop director, Rohit Kohi, said anything that forces a potential borrower to make an instant decision "simply cannot be in line with consumer duty", as it effectively puts pressure on people.
“Same day product withdrawals feel like they are against the spirit of what consumer duty was all about.”
Thanks to the Newspage community for sharing their thoughts with FT Adviser
tom.dunstan@ft.com
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