This week, Riz Malik, director at R3 Mortgages, ran a poll on LinkedIn asking brokers one question: “Do same-day product withdrawals align with the spirit of Consumer Duty?”
So far, 97% of respondents said no, while just 2% said this situation does align with Consumer Duty, and 1% were unsure.
In light of this, Newspage asked brokers for their views, and one said: “Withdrawing rates with only a couple of hours’ notice is not fair to consumers.”
Another added: “Let’s face it, buying a property is the biggest purchase that most people will make and some borrowers are forced to decide on a mortgage product in three hours.
“No time to sleep on it or discuss it with their family or friends, they have to decide there and then.
“This doesn’t align with the ethics around Consumer Duty and a 24-hour minimum notice should be mandatory.”
Further reaction:
Riz Malik, director at R3 Mortgages:
“I thought we had seen the back of same-day product withdrawals in 2023 but we still have it happening today even when the markets are a lot less volatile.
“I do not think it is the spirit of Consumer Duty nor do I think it can be justified by lenders.
“I know many brokers feel strongly about this as, ultimately, it’s the borrowers who loses out as they are forced to make big decisions under immense time pressure.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“Lenders withdrawing rates with only a couple of hours’ notice is not fair on consumers.
“It’s also not fair on the brokers who are ultimately responsible for securing those rates for their clients who often have to work excessive and late hours to get deals across the line in time.
“Lenders are making hundreds of millions in profits, so to say they cannot afford to give appropriate notice is simply false.
“Lenders should be able to announce rate withdrawals before 10am and give brokers until close of play same day at a minimum to secure those rates.
“Giving notice at 4:30pm that products are being withdrawn at 5pm is not acceptable.
“Huge credit to Coventry who always give sufficient notice and Nationwide who allow you to book a rate prior to full application.”
Gary Bush, financial adviser at MortgageShop.com:
“Lenders sending out emails warning brokers and their clients at 4pm on a Friday that unless an agreed decision in principle with them hasn’t been fully keyed as an application before 8pm the same day then they will lose the rate is beyond pathetic.
“This shows a lack of care to their customers and their financial adviser partners and that they pay little regard to their mental health.
“The past two years have seen many brokers at breaking point, yet the pain from this keeps coming.
“The Financial Conduct Authority needs to address this ridiculous situation and get lenders refusing to offer a minimum 48 working hours notice to formally fall in line with Consumer Duty.
“A number of lenders can do this why can’t these rogue firms? Working in mortgages recently is like working in a pressure cooker.
“We need the FCA to reach for the release valve.”
Ben Perks, managing director at Orchard Financial Advisers:
“Consumer Duty is all about doing things in the best interests of the customer, namely making sure that we offer a tailored and bespoke journey to fit their individual circumstances and identify anyone that could be deemed vulnerable.
“It’s a great initiative and one that most brokers have been doing anyway.
“Pulling products at the drop of a hat forces a rushed decision for some borrowers.
“Let’s face it, buying a property is the biggest purchase that most people will make and some borrowers are forced to decide on a mortgage product in three hours.
“No time to sleep on it or discuss it with their family or friends, they have to decide there and then.
“This doesn’t align with the ethics around Consumer Duty and a 24-hour minimum notice should be mandatory.”
Michelle Lawson, director at Lawson Financial:
“The simple answer to this is, no it doesn’t. We have been fighting for consumers about short notice period withdrawals for months.
“Considering Consumer Duty is about putting the customer at the centre of the transaction, putting pressure on a borrower to make a decision when products are withdrawn with little or no notice cannot be seen as complying with it whichever way you look at it.
“Consumer Duty is one thing for the lenders and another for brokers and borrowers. I wonder how many are sat waiting for the repercussions before they take it seriously?”
Matthew Jackson, director at Mint FS:
“I don’t think even the most corporate and wooden representative of any lender could argue that their actions during a turbulent market are within the spirit of Consumer Duty.
“However, this seems to be very much a do-as-we-say directive and not as-we-do from lenders. They seem willing to ignore the wellbeing and mental stability of the brokers they rely on and borrowers in their pursuit of profit.
“Claiming a lack of margin as an excuse for being able to continue pulling rates with mere hours’ notice whilst posting profits of billions the next week feels morally corrupt.”
Justin Moy, managing director at EHF Mortgages:
“‘Market conditions’ ate the usual excuse for late announced price changes, but that doesn’t reflect the spirit of Consumer Duty, the much-heralded and all-encompassing prophecy about delivering what is right, at the right price.
“How can any mortgage broker have a chance to deliver on Consumer Duty if lenders can railroad that belief with 3pm emails for a 5pm product withdrawal?
“What if the adviser is in a meeting or dealing with a family need at 3pm? There are a few lenders that give us good notice periods, so we know it can be done, and done effectively.
“All we ask is for a reasonable notice period so we can operate effectively, follow the ethos of Consumer Duty, and at the end of the day, ensure borrowers get the right advice at the right price.
“Borrowers should be the priority for lenders, but short notice periods are forcing people to make major financial decisions on a dime.”
Darryl Dhoffer, adviser at The Mortgage Expert:
“Consumer Duty states: To act in good faith towards customers, avoiding causing foreseeable harm to customers and enabling and supporting customers to pursue their financial objectives and outcomes – unless of course some lenders Product Withdrawal notice periods fall outside this remit, which in some cases is four hours notice period.
“Not sure I saw that on the small print, on the FCA or lenders websites – so must be acceptable right ?”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“Consumer Duty is meant to address four outcomes: Products and Services, Price and Value, Consumer Understanding, and Consumer Support.
“With a few hour’s notice of product withdrawals, it seems to grind against both understanding and support because it forces consumers to decide with little time for reflection, often fewer than two or three hours.
“Of course, brokers understand that lenders are commercial operations and need to turn a profit. We’re also aware that sudden swings in money markets can put enormous pressure on lender’s pricing mechanisms where they have to react to external factors outside their control.
“However, I don’t think a few basis points, either way, merit the pressure that is exerted on consumers’ shoulders.
“The fix surely has to be to provide notice early in the day, ideally before lunchtime, or no notice at all, not five hours’ warning at 3pm.”
Craig Fish, director at Lodestone Mortgages & Protection:
“No they do not. According to the Financial Ombudsman, consumer duty is underpinned by concepts of fairness and reasonableness, and treating customers fairly means putting customers in a position where they can make informed decisions, where they are presented with suitable products and services for their individual needs.
“Giving anything less than 24 hours is irresponsible and goes completely against this. Consumers are being put in a very dangerous position, and are ultimately the losers.
“However this is purely lenders passing the book, and I can foresee lots of ambulance chasers in the future based purely on this lack of time to make an informed decision.
“Lenders need to give at least 48 hours to protect both consumers and ultimately brokers.”
Simon Bridgland, broker and director at Release Freedom:
“It appears that most lenders have not got the memo about Consumer Duty.
“They can’t have given the crazily short notice periods we have been seeing over the past few weeks, in what is starting to feel like 2023 all over again.
“How can next to no notice be given with the borrower foremost in mind?
“I appreciate rates need to change but it seems that lenders want their cake and to eat it.”
Rohit Kohli, director at The Mortgage Stop:
“The bottom line is that anything that forces a potential borrower to make an instant decision simply cannot be in line with Consumer Duty, as it effectively puts serious pressure on people that could be avoided.
“Same day product withdrawals feel like they are against the spirit of what Consumer Duty was all about.
“With such a one-sided response, lenders should take note and invest in systems and processes that allow more notice to be provided.”
