Speaking at the Westminster Business Forum in London, Deb Jones, director of competition at the Financial Conduct Authority (FCA), said the behaviour had been brought to its attention.
In October last year, Santander enraged the broker community by contacting customers, some of which were broker-introduced, six months ahead of the expiration of the product term, offering to waive early repayment charges if they switched to another product rate within a month.
Jones said that while she was not reaching any conclusions on what was competitive or anti-competitive, it was a facet of the consumer journey that the FCA was interested in exploring.
“Standing back, from a theoretical perspective, when you’ve got different levels of the supply chain who normally have a commercial relationship up and down and then at some point they start competing with one another for consumer attention, in this case, it can be quite a complex web to untangle.”
She added: “What I would always come back to is what is ultimately in the interests of consumers and that is the line which will thread right through the market study.”
The Mortgages Market Study, or competition review as it is more widely known, is examining whether competition should be improved to the benefit of consumers and how this can be done.
The study will investigate whether tools used by customers throughout the mortgage journey – including advice – help consumers to make effective decisions and if commercial arrangements between lenders, brokers and other parties are set up to the detriment of consumers.
Jones said the FCA’s objective was to enable a fair state of rivalry, and not to control competition.
The findings from the review will be published in an interim report expected this summer, and actions to address any failings will be implemented after that time. The final report is due to be released in 2018.
Jones added that market studies were rarely about quick wins and could take years before the industry could see any effects. “Allow us the time and space to do this properly. There are no easy answers,” she said.