Tim Henson, AToM

Web-based or otherwise, anecdotal evidence suggests there are a number. Whether they are significant or not depends on the identifiable damage they are inflicting on the industry in general and individuals in particular. While the web provides an effective medium to draw potential clients in, it does not follow that there is an intention not to be compliant. That will only become apparent in the manner the enquiry is handled and how many clients are sufficiently acquainted with FSA regulations to make that call?

Proving any individual or firm has transgressed the regulatory line is likely to be difficult except for the most blatant breaches. The FSA, by allowing part of the market to go unregulated, has given the opportunity for this gap to be exploited. The essence remains that there are those who will always attempt to part a fool and his money to the detriment of the industry as a whole. Financial education and an approved list for the unsuspecting might help to identify the ‘rogue trader’. Fines and compensation is not the answer, but maybe a system of ‘licensing’ could provide the data base to develop a record of recognised introducers subject to standards of operation in accordance with best practice and sound governance.

Kevin Paterson, Park Row

For the first time mortgage websites have to comply with the FSA rules regarding financial promotions and disclosure so it is no surprise that many are failing to meet the required standard. I am sure many are waiting until they are slapped by the FSA before doing anything, unfortunately the FSA light touch does not extend to introducers who have made no effort to conform to the new rules.

I know from experience that amending introducer websites can be a big job, there may be hundreds of pages plus an equal number of ‘meta tags’ (pointers to a website) but to be fair this had been coming for some time.

Ignorance is no defence and search engine positioning means that any downtime will be very punitive so introducers can ill afford not to comply – in this fiercely competitive arena being forced to shut down and possibly fined by the FSA for a period of time could be commercial suicide.

Tim Hague, BM Solutions

With grey areas, such as the recent issue with financial promotions and non-regulated web-based introducers, it can be all too easy to stray into regulated activities. This may be done unintentionally in some circumstances.

However, if a firm claims an exemption then it needs to understand the boundaries and the lines that cannot be crossed. We have all been operating in a regulated market for a long time now and there should be no excuses for not complying with the rules.

The FSA has been clear that from its research it does not think this is a widespread problem. But there is no room for complacency and I am sure that the FSA will be keeping a close eye on this going forward. It is sending out the wrong message to the rest of the market if everyone can see that these firms are blatantly ignoring the rules on the internet.

Sean Hornsby, Mortgage 2000

There are quite a number of web based introducers that have compliance issues. For the FSA to clamp down on them would require a huge amount of resources and so the regulator has to be in the business of prioritising its activities. In terms of finding out the firms who are failing to comply it is a very straight forward process of simply trawling through websites.

This industry has been regulated by the FSA for less than a year and it should be focussing most of its attention on firms that are actually giving out bad advice rather than web based firms who are not actually regulated giving what may well be good advice.

That is not to say this should be brushed under the carpet rather we need to take a more long term view. The FSA could make an example of a small number of web based firms with a series of stern letters. The additional publicity this would generate would be enough pressure to reduce the problem of non-compliance in this area and leave enough resources to tackle other regulatory activity

Mark Leaper, Vesta Packaging

At the time of statutory mortgage regulation Vesta took on board many hundreds of mortgage introducers who did not want to go to the cost of being directly authorised, or be restricted by becoming a member of a network.

Most of these introducers who channel their cases through Vesta, which is directly authorised, are not web based and they comply with the relevant Financial Services Authority (FSA) rules. If they do have a web presence we make sure that they point out that we are their authorised firm.

However, if you browse the internet, you come across hundreds of web-based brokers who fail to comply with minimum FSA requirements. I cannot say I am particularly surprised though. In the area of financial promotions and marketing there is so much on the internet, television and the press that flagrantly breaks the FSA guidelines.

I suppose the FSA does not know where to start it has so much potential enforcement on its hands. In time I guess all the industry will come around to the correct way of doing things but until then we are going to have to put up with a few cowboys.