This week’s Star Letter goes to Pat Bunton for his comment on Lender evasion on policy disclosure raises doubts for mortgage prisoners.
“The big issue here lies in the fact that the same lenders treat new and existing customers very differently and by acting in concert have created more mortgage prisoners (those who can’t switch lender) than MMR Rules intended.
“Doing one thing for back-book customers and making switching easier for them is great, but when all lenders do that together, but not for new customers, all they do is collectively lock in their own back books. This is to lenders’, not consumers’ collective advantage, and too often the rates offered to those who lenders know are trapped are higher than those they know may vote with their feet.
“It’s quite shocking how this keeps getting spun into an implied ‘we’ or ‘they’ use transitionals and that the regulator appears to have bought this hook, line and sinker. The reality is they are being used sporadically and in a way that traps back book customers. This is diametrically opposed to the original policy intent of transitional provisions, so why the FCA seems so happy to just let this slide is beyond me.
“The evasiveness of the responses you received was not surprising and just highlights all of this even further.”