Mortgage broker websites misled customers, Central Bank finds
Published 24/08/2011 | 05:00
A large number of mortgage brokers have misled consumers through their websites, with some wrongly claiming to be regulated by the Central Bank, while others advertised incorrect interest rates for the products they were selling, according to a review by the Central Bank.
A review of 486 of these firms by the bank found wide-scale breaches of the Consumer Protection Code.
The bank's director of consumer protection, Bernard Sheridan, said it was writing to all mortgage brokers it had inspected, and to the wider financial services industry, to ensure they are aware of the requirements they need to adhere to when advertising their services to the public.
"We have dealt directly with all firms found not to be complying with the Consumer Protection Code to ensure corrective action was taken" Mr Sheridan said.
On top of this review, the bank also investigated 85 advertisements and required brokers to change or remove them in 80pc of all cases.
The main problems identified by the regulator were that in many cases brokers were claiming to be regulated by the Central Bank when they were providing unregulated products and services. And indeed many firms displayed the Central Bank logo on their websites, which is prohibited.
Another common problem was brokers omitting or hiding the risk-warning notices about the products they were selling, making it impossible for consumers to adequately assess what they were signing up for.
The Consumer Protection Code requires that these warnings are displayed in bold type within a box in all such advertisements.
The survey also found that some firms were including misleading statements, saying "no proof of income needed" in information they were providing about mortgages they were selling.
And some firms were not advertising the correct rate of interest that applied to the terms of the mortgages and other products they were selling.
A number of brokers, for example, were only displaying the Annual Equivalent Rate (AER) beside a six-month fixed- term savings account when the relevant rate for the term of the product as well a the AER should be included.