I have always believed that regulation of any form is a type of restricted practice ‘ a monopoly ‘ and that it almost always involves increased costs due to the accompanying increase in compliance. The only people who will make money out of this will be larger brokers, PI insurance providers, the FSA, lenders, and compliance officers. The rest of the players (smaller brokers) are generally considered as ‘the fall guys’. And all this is happening in the name of consumer protection.
I recently read a report in the press that the Financial Ombudsman is requesting all brokers join the scheme now, so that it would be easier when regulation is finally implemented in 2004.
The Financial Ombudsman also pointed out the fees that will be involved in such a scheme. Obviously this will add costs to any mortgage business. Furthermore, if you remember, the initial press reports (when the MMCB first came into being) said that procuration fees will ‘sky rocket’, but has this happened?
No. The procuration fee is still meagre ‘ around £150 per case. However, the increased fees have now had to be passed on to the consumer ‘ so much so for the consumer protection!
I would hasten to add: ‘I told you so!’