Mortgage lenders and brokers will soon have to adhere to new rules governing how they sell products to consumers buying from the comfort of their own home, according to the Financial Services Authority (FSA).
The FSA has set out the long-awaited proposed changes in a move to bring its existing regulations more in line with Europe, which has already adopted the Distance Marketing Directive (DMD).
The FSA is responsible for implementing the directive for the companies it already regulates as well as first charge mortgage and general insurance providers, which it will regulate from October 2004.
The DMD aims to provide increased protection and greater choice for consumers throughout the European Union by setting minimum standards for information provided to consumers, and giving a cooling-off period during which consumers may cancel their contract.
Once the proposals are implemented across Europe, consumers buying retail financial services or products by post, fax, internet and telephone will be given common rights and protection when dealing with any financial services firm within the European Union.
The Department of Trade and Industry (DTI) will implement the Directive for consumer credit, second charge mortgages and related activities.
James Mayne, director of compliance at Competent Adviser, said: ‘Any protection is of some benefit but, ultimately, if consumers are concerned about whether they are buying the right product or not, they should obtain financial advice.’