Press Release – Mortgage brokers and financial advisers must ensure they comply with FCA requirements despite working from home
Complyport a leading compliance and regulatory consultancy has warned mortgage brokers and financial advisers, they should ensure, despite the fact that most are working from home or remotely, that practitioners are compliant with current regulations put in place by the FCA during the COVID-19 crisis. These changes include the FCA accepting digital signatures on loan agreements, more online meetings with clients, which will require verification methods of income, address and affordability of loans and agreements to have inbuilt rigour and compliant with current legislation.
The FCA recently confirmed it would accept electronic signatures for fund-related applications and on all applications from mutual societies. The FCA is urging firms to take steps to minimise the risks involved with using electronic signatures, especially those which may impact their responsibility to treat customers fairly and with due care.
The FCA said: “Firms should consider the client’s best interests rule and the fair, clear and not misleading rule to ensure that, when a client signs a document electronically, this does not make it more difficult for the client to understand what they are agreeing to.”
Paul Grainger CEO of Complyport Ltd said:
“The COVID-19 crisis has meant that we have lost the ability to have physical 1-1 meetings to check applications and explain the implications of legal agreements entered into by customers. Mortgage and consumer credit brokers must still ensure that in the new “norm” of electronic and digital meetings, brokers must exercise great care when completing transactions. They must be very mindful of the FCA rules relating to treating customers fairly and with appropriate care. They must consider the legal position around the use of electronic signatures and, indeed, around other associated areas such as explicit consent needed in the processing of certain data.”
“So we would expect firms to adjust their business processes to meet FCA rules whilst also taking a pragmatic approach to how they help advise clients and help them to complete transactions required.”
Paul Grainger CEO Complyport Ltd commented that:
“Complyport has warned firms that where firms do move from wet-ink to electronic signatures, they should monitor data including conversion rates, cancellations and complaints.”
The FCA has also provided guidelines in a 3-months payment freeze to customers that are facing financial difficulties in meeting their finance or leasing payments due to coronavirus and suggests firms not to end any agreements.
The FCA advises that in most other loan freeze arrangements, firms will be able to charge interest rates during the payment freeze period but, for those customers who require full forbearance, their interest rates should be waived. The current forbearance arrangements, such as suspending, reducing, waiving or cancelling any further interest or charges, deferring payment of arrears or accepting token payments, will still be applicable for customers with pre-existing financial problems.
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Notes to Editors:
- Complyport is a leading compliance and regulatory consultancy providing bespoke, practical solutions for all manner of regulated firms both in the UK and overseas. Our specialist compliance services expertise can either sit alongside your current compliance teams or, for an independent solution, we can bring our team in-house.
- Established in 2002, Complyport combines former regulators, industry practitioners and legally qualified individuals to offer our clients an unparalleled, professional team.