Mortgage advisors attacked
Which? has revealed that its representatives received acceptable advice from only three out of 39 mortgage advisers.
10:19 02 September 2004
Following an undercover investigation, Which? has revealed that its representatives received acceptable advice from only three out of 39 mortgage advisers.
From November, mortgage advisers will be regulated by the financial services watchdog (the Financial Services Authority) which hopes to iron out such discrepancies.
The current mortgage code is designed to protect consumers from bad mortgage advice, but - in complete disregard for the code - seven advisers examined in the Which? study did not mention it and 14 gave misleading information about it.
In addition, 21 advisers failed to properly explain the ways to repay a mortgage and 23 did not clarify the different deals available.
The editor of Which?, Malcolm Coles, said: "Some of the bad advice we received was down to inexperience and poor training, or advisers being more concerned about selling protection insurance that pays big commissions than giving mortgage advice."
The advisers from top high street institutions such as Abbey, Halifax, HSBC, Lloyds TSB, NatWest and Nationwide didn't make it clear that they could only recommend their own company's mortgages, although the code says they must.
"Regulation won't solve these problems, though it should mean advisers become more accountable," Mr Coles added.
He concluded: "Bad mortgage advice can cost you thousands of pounds or - even worse - your home. Consumers deserve better. We'll be keeping an eye on the situation."