FCA chief executive Martin Wheatley (pictured) is expected to urge financial services providers to do what is right rather than what their terms and conditions allow in a speech this evening.
Property 118 founder Mark Alexander, who is organising the class action against the Bank of Ireland tracker rate rise, said he agreed with Wheatley’s message.
However, he said the FCA had already outlined principles of fairness: “The thing that really saddens me is the FCA isn’t upholding this. They are not enforcing their own principles in the case of the West Bromwich Building Society and Bank of Ireland.”
The Law Department principle Justin Selig, who is acting for the case, added: “Unfortunately actions speak louder than words, and the response we have had from the FCA doesn’t sit with this at all.”
The FCA declined to comment.
Wheatley is expected to say few consumers read the terms and conditions of financial products: “Relying on ‘fine print’ because somebody has ticked the box, but which allows things which are ‘unfair’ is not the way forward.
“But of course, buried in that ‘fine print’ are lots of terms and exclusions that firms rely on when economic conditions change.”
Whether a contract was fair could depend on the marketing, what happened at the point of sale and branding as well as the fine print, he will add.
Wheatley will say the regulator was moving towards more emphasis on good judgement and less on narrow compliance: “Hopefully to a culture where the ‘ethic of care’ – doing what is right takes precedent over the ‘ethic of obedient’ – doing what is allowed.”
In correspondence with MPs earlier this year, Wheatley described the Bank of Ireland’s decision to raise rates on certain tracker mortgages as fair.
However, in the wake of the West Brom’s decision to raise rates on its buy-to-let tracker mortgages, the FCA announced it would be consulting on mortgage small print.