FSA tells mortgage-lenders to 'play fair'

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FSA tells mortgage-lenders to 'play fair'

Fri 28th Nov 2008

The Financial Standards Authority (FSA) has issued an open letter to lenders asking them to 'play fair' regarding arrears and repossessions during the recession.

According to the FSA, lenders should take steps to ensure they employ best practice when dealing with such cases by reviewing their current arrears policies, as well as management procedures and sample case profiles.

In the letter, FSA retail managing director Jon Pain comments: "In such a challenging operating environment it is particularly important for senior management to ensure the fair treatment of customers, including when they go into arrears.

"Where we [the FSA] find that lenders are not complying with our requirements we will make appropriate and properly targeted use of our existing regulatory tools, which may include enforcement action."

Chief executives of the mortgage lenders concerned have until January 31st, 2009 to review their procedures and report any weaknesses found, including reparatory actions, to the FSA.

The action follows a recent FSA study which showed that the number of repossessions in the UK, while still low, is increasing.

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