FSA called on to act against predatory lenders

The Financial Services Authority (FSA) should move fast to act against lenders who are reportedly encouraging borrowers to lie about their incomes in order to obtain a mortgage, one adviser has suggested.

A programme due to be broadcast by the BBC this evening alleges that some lenders are abusing the self-certification market by advising borrowers to fabricate their income in order to get onto the property ladder, only for the homes to then be repossessed once repayments are not met.

Financial inclusion adviser and former Which? policy director Mick McAteer has told the Today programme that the FSA needed to be aware that the report had all the hallmarks of a "classic" selling scandal.

"The lenders of the financial services companies are killing themselves to get market share," Mr McAteer commented to the BBC Radio 4 programme..

"To cap it all you have very, very weak regulation at a time when possibly millions of people are vulnerable to interest rate rises and may have been mis-sold mortgages.

"I think it's about time the FSA took tough action and enforced action against these predatory lenders," he concluded.

The FSA has come under criticism this month for its role in the Northern Rock crisis, with the FSA chairman and chief executive both set to face a Treasury select committee to discuss the matter next month.


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