You can’t escape GDPR news, from articles to regular consent emails being received.  Many firms will be GDPR ready, but if you’re not, you still have time.  In large the GDPR is not a big change from existing data protection rules for brokers, so firms which already have robust procedures wont have a difficult task updating to GDPR.  With the deadline nearing ( 25^th May), below is a summary of the main requirements. 

The European Commission began a review in 2010 of the Insurance Mediation Directive (IMD) which came into force in January 2005. The review resulted in proposed revised directive known as the Insurance Distribution Directive (IDD).  UK firms were originally required to comply with this by 23rd February 2018, but this date was put back to 1st October 2018 by the EU.

The key points which are more relevant to mortgage and insurance intermediaries have been summarised below.  

It has been published that mortgage fraud is on the increase, its unclear if the level of mortgage fraud has increased or if firms and lenders are getting better at identifying it?  Either way it’s important that brokers do all they can to avoid getting involved in fraudulent applications.   What are the requirements?  What should you be doing?  How can you identify mortgage fraud?  

The FCA have finalised new complaints handling rules, which take effect from the 30^th June 2016.  The new rules will give firms more time to resolve complaints in a non formal way but will also mean all complaints will have to be reported on Gabriel returns and a new written communication sent.  We have summarised the changes below

Are you giving suitable advice when recommending debt consolidation?  We often see mortgage files with clear evidence that the customer is making a monthly payment saving and the relevant warnings have been given regarding unsecured to secured, total cost may be higher etc but this by itself is not sufficient. 

It’s not long now until the Mortgage Credit Directive (MCD) comes in and we’ve heard a lot of conflicting messages regarding what to do about second charge mortgages (secured loans).  Some of this conflicting information is from the second charge providers during BDM visits so we wanted to clarify what’s required.

Many brokers use the FCA templates for disclosure, either the CIDD, IDD or both.  The FCA are concerned that the templates create a risk that firms adopt a tick-box approach to disclosure rather than creating a more personal form of disclosure to help your target customers understand the service you provide and costs. 

From the 21^st March 2016 BTL mortgages will be treated differently.  The government has chosen to use an exemption in the MCD that means they do not have to apply the Directive’s requirements to buy-to-let mortgage activity.  However in order to rely on this exemption, an appropriate framework for this type of activity has to be put in place.