The Financial Conduct Authority (FCA) has warned borrowers that if they take out loans using unregulated advisers or lenders, they will not be protected and their money may be at risk, says a December 2016 SWNS.com article.
The FCA said that, although there are a number of regulated businesses that have broken FCA rules, they are more concerned with companies that are not FCA regulated. They say that unregulated and irresponsible lenders are a prominent cause of individuals and businesses being in a bad financial position. The FCA added that it has limited resources, so will prioritise acting against unregulated lenders, saying:
“We will prioritise intervening outside the perimeter when we believe our objectives are threatened.”
Fortunately, most brokers and lenders provide very good service, but dealing with a company that is not committed to the best interests of the borrower can result in the borrower being exposed to risks. Many borrowers fail to check the credentials of the financial adviser or lenders before deciding which service to use.
There has been a recent spike in the number of bridging loans. Bridging loan lenders and brokers regulated by the FCA tend to be very experienced due to a large client base. They employ expert staff to make sure that each bridging loan applications proceeds smoothly and quickly.
The lesson from the FCA is that borrowers seeking bridging and other loans need to deal solely with regulated brokers and lenders that have a good reputation for acting in their client’s best interests.