A recent case where the FOS has found against a broker has gathered some headlines together with significant sympathy and support from the adviser community. AMI is having discussions with the Ombudsman Service on how it is interpreting the Emptage case and what the implications may be for advice on increasing a mortgage.   We will be advising our members on this in the weeks to come.

What is interesting in looking at the FOS case is that this was a regulated residential mortgage, but we cannot find any evidence that the firm held the appropriate FSA permission. This appears to be missed in the judgement. It is unlikely that the firm will pay the customer the amount adjudicated by the Ombudsman so the firm may fold and the case will go to the Financial Services Compensation Scheme to decide if they will pay. FSCS do have different standards to FOS. FSCS have already defended the industry’s honour to the hilt in pursuit of the Emptage case, so I fear it will have to pay and ask the broker community to pay the levy.

Unless of course Barclays, who are alleged to have taken the deal on fast-track from an unauthorised source, decide to pay up for not looking at the purpose of the advance at all. I am not holding my breath.