SRB market temporarily shuts after FSA review
03 February 2012 at 17:45
The sale and rent back (SRB) market has been temporarily closed following an investigation led by the Financial Services Authority (FSA), it was announced today (February 3rd).
Mortgage compliance officers should be aware the SRB market has been shut after an FSA review uncovered failings that saw customers ill-advised on transactions that were “either unaffordable or unsuitable and never should have been sold”.
The watchdog reviewed 22 firms and found that just nine had been active since the FSA undertook regulatory control from HM Revenue and Customs in July 2009.
Of those nine, five have now ceased doing SRB business, while a further two have kept their regulatory permission but do not intend to use them in the future.
Consumer group Which? has called for redress to be paid to affected consumers.
Chief executive Peter Vicary-Smith said: “It’s welcome news that the FSA has taken action to stop people falling prey to shoddy advice from sale and rent back firms.”
The organisation paved the way for the FSA investigation after its own review determined advice was “woefully inadequate”.
Posted by Claire Robin