FSA demands 'tough standards' from firms

25 June 2010 at 16:36

FSA demands 'tough standards' from firms The Financial Services Authority (FSA) has demanded tough standards from firms by setting out rules to ensure there is proper protection in place for vulnerable customers in arrears on their mortgages or entering sale and rent back (SRB) agreements.

According to the regulator, it defines the standards firms must follow on arrears handling and contains details of the full SRB regime, to provide customers with greater protection from June 30th 2010.

"Today's announcement demonstrates the FSA's commitment to intensive and intrusive supervision to ensure firms treat their customers fairly. It forms part of crucial next steps following the FSA's Mortgage Market Review launched last October," the watchdog said.

The document states that for customers in arrears, firms must not apply a monthly arrears charge where an agreement is already in place to repay.

In addition, payments by customers in financial difficulties must first be allocated to clearing the missed monthly payments, rather than to arrears charges, which can be repaid later.

Posted by Claire Robin ADNFCR-3006-ID-19858518-ADNFCR

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