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Mortgage lenders slammed for "hiding" fees

A financial watchdog has called on mortgage lenders to stop misleading customers in regard to fees.

The Financial Services Authority (FSA) claims that many lenders offering sub-prime mortgages to people who have poor credit ratings are disguising the true cost of the fees involved.

The FSA visited a number of the worst offenders during October and November after studying hundreds of adverts and other promotional material.

Often the adverts were found to fail to clarify the full cost of a mortgage, while in other cases customers were sold costly, sub-prime mortgages despite having an unblemished credit history.

"Firms in this sector should be on notice that this is a priority area for us in assessing whether they are genuinely treating their customers fairly," said Vernon Everitt, from the FSA.

"We will continue to intervene where this might be the case, including taking further formal disciplinary action."

The FSA undertook legal proceedings against 12 firms in the past year.

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01/12/2006 12:29:27

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