Mortgage Brokers: Consumer Duty Teardown #3

Episode transcript

Amelia: Hey, I'm Amelia.

Paul: Hi, I'm Paul.

Pat: Hi, I'm Pat.

Russ: I'm Russ.

Amelia: And this is Fin the Week. How's everyone doing?

Paul: Good, yeah — another hot week.

Russ: Yeah, good, cheers.

Pat: Pretty good, yeah.

Russ: It's warm.

Amelia: It's nice, isn't it?

Pat: I'm going to try and go for a swim after this, I think.

Amelia: Oh, how nice does that sound? I feel like it's basically like living abroad at this point — when you wake up and it's 20 degrees and you're like, "oh, it's a bit nippy, isn't it?"

Pat: Ha — yeah. And then you have to go to work.

Paul: Yeah, it's like being on holiday, but then — yeah, exactly.

Amelia: Feels very European.

Paul: Yeah, work gets in the way.

Amelia: So we're four weeks into the trust reset, three weeks into our teardown series. This week we're tackling probably the biggest financial decision most people will ever make. Before we get into it, does someone want to briefly explain what these teardown sessions actually are?

Russ: Yeah, I can explain that. We're picking three firms and looking at journeys and how they conform to Consumer Duty — whether there's anything worth flagging that could put them at risk under Consumer Duty, against the full outcomes and the cross-cutting rules. Worth noting, we're using our scanning tool, UX Duty. We can manually put in a list of URLs and set it off on a journey, and it goes through and uncovers lots of different things. So we're pulling those out, finding some common themes, and going through them.

Amelia: So far we've looked at current account switching services, then consumer investment and robo-advisers last week. This week, perhaps the most complicated case of all the financial services journeys we've looked at — mortgages are probably the most fragmented, because you start at a broker, move to a lender, and then, if everything goes through, land with a servicer for maybe 25 or 35 years. Sometimes that's three different firms. Is that why we've chosen mortgages next?

Paul: Yeah, I think mortgages is an important one to look at because one of the things the FCA has highlighted in its commentary on the first two years of Consumer Duty is that firms are perhaps not looking hard enough at distribution chains. A lot of firms have embraced Consumer Duty and are looking at how they engage with consumers, but they're not necessarily looking at the technology providers along the chain. Those providers might consider themselves outside the scope of Consumer Duty when, in fact, what they're doing does fall within scope. Mortgages are the perfect example, because, as you say, there are sometimes three different firms involved in a single relationship with a consumer — so it's critical that everyone along that distribution chain considers what they're doing.

The other reason is that a mortgage is, in many ways, an aspirational purchase. Home ownership is a big deal for a lot of people, so getting on the ladder is important, and mortgages open the door to that — it's something people are quite keen to engage with. So it's important that the journeys they see guide them along the right path.

Amelia: That's why we've chosen mortgages. Let's get into it — what types of firms have we reviewed this week?

Russ: Similar format to the last couple of teardowns. We've looked at a top-tier leading firm, a mid-tier firm in terms of size, and a challenger, small-tier firm. Although in this case — and you'll see this a lot with mortgage brokers — the branding is more built around an individual's name, more like a consultant. That seems to be a common theme you wouldn't see as much in banking.

Paul: And we've gone for brokers as opposed to direct lenders, because brokers are often the starting point for people.

Russ: Yeah, absolutely. These are firms that give you a wide range of options across lenders — I think one of them pulls in information from around 120 lenders. So they're working with huge pools of information. Complete coincidence, but I'm actually seeing a mortgage broker tomorrow — not the first time I've gone through the lending process, I've done it about three times now, so I'm quite familiar with it, at least in Guernsey. That's helped.

Amelia: Very timely for you, then.

Paul: You're probably going to chew the broker's ear off about everything you've learnt.

Russ: Yeah.

Amelia: Ask if he wants to come on the podcast.

Pat: I found the colour contrast on your mortgage calculator's submit button non-conformant with WCAG AA.

Amelia: Ha!

Paul: Just sign the forms there.

Pat: I had to search for more than fifteen minutes to understand your cancellation policy.

Amelia: Good luck with that.

Russ: I'll probably get the worst deal on the list.

Russ: I was thinking, before we got stuck in — these teardowns are good because we all like a bit of a rant, and this gives us an excuse. It is important, in line with Consumer Duty, but it might be nice to also do an episode looking at the positive UX findings across these firms. With anything design- and UX-related, it's much easier to find problems than to agree on what's a good feature and what really works for the consumer. So, as an antidote to these teardowns, maybe we should do a positive UX session too — just an idea.

Pat: I don't think it would get many views.

Paul: No one likes good news.

Russ: No, no. All right, let's get stuck in.

Amelia: Nice idea, though. Let's dive in — why don't we start with a general overview of the findings?

Russ: In terms of the overall stats: we looked at six pages in the journey per firm, so we were consistent with the number of pages. The journey is a bit shorter on this one than some of the others, because you normally hit a mortgage calculator at some point, or a "contact us" or general information page. We also looked at some of the small print and policy pages, and checked those against Consumer Duty using UX Duty.

There were 125 findings across the three firms, 11 flagged as high severity. Accessibility issues made up 43% — in keeping with what we've seen before, around half. Firm A, the bigger firm, had 10 of the high-severity findings, which is quite interesting. We also had our first medium-risk result — everything else has been flagged quite cautiously as high, depending on what's found. Firm A and Firm C came through as high risk; Firm B, the mid-tier firm, came through as medium risk.

Amelia: What counts as high severity, Russ?

Russ: It can be a few things. If there's a recurring medium-risk issue, it can eventually be flagged as high risk. But it's normally when there's a clear, outstanding non-conformance against Consumer Duty — something UX Duty considers a real breach of the regulations.

Amelia: Is there anything that surprises us about these figures — is this what we'd expect based on previous weeks?

Russ: It is a bit of a surprise that the bigger firm has more of the issues. But we've discussed in past episodes how these startup and mid-tier firms are perhaps more agile with their digital platforms. Firm B has a really great-looking site, clearly quite new and modern — perhaps that's why it came through as medium, because they've considered everything carefully. They probably have a design team more tuned to accessibility and Consumer Duty than some of the other firms. It takes a while to bring these bigger platforms up to date, unless they rebrand — some big banks have done a splash rebrand, others evolve more gradually. It's a lot easier for smaller and mid-tier firms to have a modern, accessible website because they can build it in from the beginning.

Amelia: Paul, Pat — anything else stand out to you there?

Paul: Not necessarily surprising, but interesting to see one firm rank as medium risk — that's the first time we've seen that; every other time it's been high risk. I always wondered whether the Consumer Duty and accessibility bar is so high that nobody really hits it. So it's interesting there's a firm doing it successfully. Russ, when you were looking at the sites, was Firm B noticeably a more pleasant experience?

Russ: Yeah, definitely. You land on the site and it's just enjoyable to use, the content is friendly and clear, the font size is legible. As soon as you go through the site, it's quite reassuring — it shows that our tool, and what Consumer Duty is trying to achieve, actually works when a firm gets it right.

Amelia: So that's the general picture. Should we get into the specifics? What's the first finding?

Russ: Anyone who's gone through the process of getting a mortgage probably won't be surprised that these sites don't disclose fees and hidden costs particularly well. On one of the firms, fees weren't explained until the no-obligation appointment — you have to go down there to find out what the fees are, which isn't in line with Consumer Duty, especially the cross-cutting rule that firms must avoid foreseeable harm and provide transparency across the product lifecycle from the outset. That was a bit sneaky.

The other issue, on the mortgage calculators — again both on Firm A — is that it only shows the monthly repayment. If you look at your mortgage statement, you'd probably be surprised how much of that monthly repayment is interest. If you're being transparent about the product, it should also show how much you'll pay over the full term. It doesn't mention things like overpayments and how they can help — they're not really benefiting the consumer or being clear about the full cost, especially hidden fees. Early exit charges are a classic example — looking at our own facility letter, if we exited at a certain point we'd have paid 5% of the balance, which could be huge even on a modest mortgage, and would probably affect people's decision-making.

So these fees, in line with Consumer Duty, should be disclosed early — certainly not first raised at the appointment. That was a common theme across all three firms.

Pat: We talked quite a lot over the last two sessions about loans and APRs, and the recent car loan scandal, where dealers increased the interest rate on loans and the finance companies paid the dealers extra commission out of that additional interest — leading to a multi-billion-pound refund scheme. With mortgages, that point is even more relevant, because people don't really understand what a loan is. They see that they can get a particular car for £500 a month and don't think about the fact that they could get a 5% loan from a high street bank rather than a 12–13% loan from the dealer — and end up paying far more for the same car over the same term, or a lot less car for the same money.

With mortgages, it's similar but bigger, because mortgages are amortised — the interest and capital are split so that early on you're paying mostly interest, and it gradually shifts to mostly capital repayment towards the end. People don't understand that. They also don't understand that a small movement in the interest rate — even half a percent — can translate into a huge saving over the life of the mortgage. Likewise with overpaying: on an amortised mortgage, an extra £100 a month goes straight onto the capital balance, which dramatically reduces the interest you pay overall.

There's a lot of detail around mortgages that can save people a fortune, but for someone who doesn't understand it — a first-time buyer without a big deposit — the lender knows that person doesn't understand the mechanics, and gives them a worse interest rate. By your second or third mortgage you start to figure it out. If users understood upfront how a mortgage works, how fees work, and how much a small change in interest rate affects the total cost, I think they'd be savvier and better able to choose a product suited to them.

Paul: The other interesting thing about mortgages is vulnerable customers — sometimes people are vulnerable because of the situation they're in, and mortgages are a great example. When someone is trying to secure a mortgage, they've usually found a property they want, and there's often competition for that property, so they're already under time pressure to get the deal in place. I suspect a lot of people would be considered vulnerable simply because of that time pressure, and as a result less likely to pick apart the numbers and really understand what they're signing up to. They'll see the monthly repayment, think "I can manage that," and go with it — and they probably don't shop around, because comparing mortgages multiple times isn't exactly appealing. The stakes are high, and if there's one place where considering vulnerable customers is critical, it's this.

Pat: You never see, on a mortgage calculator, an option to see what happens if you pay an extra £50 a month on top — how that would reduce the term and affect the mortgage. That's actually really interesting, because a lot of people who sign up for a £2,000 or £500-a-month mortgage could probably afford another £50–100 a month, and that could save them five or eight years off the mortgage.

Russ: The challenge is that some lenders don't allow overpayments — ours doesn't; you can make one overpayment a year, and that's it.

Pat: That's a red flag in its own right, isn't it — that should factor into people's decisions.

Russ: The challenge for brokers is having a calculator that covers all lenders, because lenders' terms are so different. They can't just say "great, put in that you can afford an extra £100 a month" if your best option turns out to be a lender that doesn't allow overpayments. So it's difficult for them to give a generic overview without quoting specific lender terms. But the overpayment point should definitely be its own article, maybe even a separate overpayment calculator, so it isn't confusing — showing how, if your lender allows it, overpaying can drastically reduce your term or the interest you pay, with some examples of products that do allow it. That's where you reach genuinely good usability, and it's really clear for the user.

It's also worth remembering how time-consuming and stressful this all is. Everyone's got busy lives — if you're moving property with kids and a job, how much time do you really have for all the appointments and calls needed to figure this out? Moving house needs the stars to align: get an offer on yours, get that secured, find somewhere, get your offer accepted, get your mortgage application approved — all while trying to understand the products on offer and make the best decision, alongside everything else going on in your life. That's a real challenge. I don't know if firms play on that to make it seem more complicated than it needs to be, or if it's just inherently a complex, legally heavy process — building insurance, life insurance, and everything else all being sorted at the same time. But they do have an obligation to make it as easy as possible to understand.

Amelia: How much fee disclosure is reasonable, or possible, at these early stages, do you think?

Russ: I think it should be disclosed before the appointment.

Pat: And wherever a mortgage calculator gives you the monthly repayment — because that's the headline figure people try to align to their budget — it should also give a breakdown of the total you'll pay over the life of the mortgage, and how much of that is interest versus capital. Because when you get your first annual statement and see you've paid £24,000 to your provider and £23,500 of that is interest, that's a shock — that's what a first-year statement typically looks like, because it's almost all interest early on. It's important to show the total cost over the term, how much is interest, and to make clear that the split shifts from interest-heavy to capital-heavy as the mortgage matures — and that overpayments are hugely effective because they come straight off the capital rather than being absorbed by interest.

It's about giving a more rounded picture of how a mortgage works, in a way a layperson can understand, because it is a complicated product.

Paul: Whether it's reasonable for firms to quote specific fees at the early stage, I'm not sure — but they could certainly prepare people for what to expect. Something like: "this is what we typically quote, this is how it's broken down, this is how to read your annual statement." It doesn't need to be complicated, just a simple breakdown of what to expect once you get to the numbers.

Amelia: Should we get into the next finding — what's up next?

Russ: This one actually surprised me — UX Duty flagged it, but it also stood out to me as a potential legal issue. On Firm A's "contact a broker" form, there's no opt-in or opt-out consent for using your details for marketing — you have to email a separate address to be removed after submitting the form.

Amelia: And this is Firm A.

Russ: Yes. What's almost laughable is that it's the same on the complaints form. So if you're making a complaint to this firm, you can't opt out of marketing while doing so — you're on their marketing list unless you separately email them to be removed after making a complaint. You're probably getting a promotional email regardless.

The other issue is that this copy is nine pixels on mobile. For context, the GOV.UK Design System increased its smallest font size from 14 to 16 pixels, and the British Dyslexia Association recommends never going below 16 pixels, even on mobile. So we're talking about a drop of nearly half — on mobile, the text is essentially unreadable. Two big issues there. Pat, given how hot you are on GDPR, what are your thoughts?

Pat: I had to go for a little walk to calm down after reading this one. Opt-in checkboxes on forms — the GDPR guidance is absolutely clear: it has to be opt-in. If you want to use a user's data for anything beyond fulfilling the form's stated purpose, you need a checkbox saying "I agree for my data to be used in line with the privacy policy," for the specific purpose stated — for a mortgage broker, that would be "to compare against mortgage offerings and come back to me with possible matches." That's fine, and can be mandatory for submitting the form.

There should then be a second, separate, unticked checkbox: "I agree to be included in a marketing mailing list and presented with offers." That one should be optional. The problem, from a marketer's point of view, is that maybe only 2–3% of people will tick that second box — but email marketing is genuinely powerful, with better conversion rates than most other advertising, so building that list matters to the business. That's exactly why this gets abused so often — you'll see phrasing like "uncheck this if you don't want marketing," or "don't check this box if you don't want marketing," which is confusing, effectively a double negative, designed to trick people into opting in by accident. All of that is illegal under GDPR.

Amelia: What's the potential punishment for something like this?

Pat: A GDPR breach can be fined up to £17.5 million, or 4% of global annual turnover. But enforcement is very rare, which is why it's so widely abused — I'd guess something like half of forms online have an incorrectly configured marketing opt-in. It's practically impossible to enforce all of them, and those maximum fines have only really been handed out to firms like Facebook/Meta or Google for widespread privacy abuse — you wouldn't get a fine like that for a badly worded checkbox. More likely, if someone complained, the local data protection authority would just tell the firm to fix it.

But this example, where you have to email to opt out because there's no checkbox at all, goes a step further than a strangely worded checkbox — there's simply no consent mechanism. It would probably only take one complaint to the ICO for them to reach out and get it corrected.

Amelia: Not looking good for Firm A. And we're staying with Firm A for the next finding, aren't we, Russ?

Russ: Yeah — this one probably wouldn't get them fined, but they don't have their FCA registration number on the site at all, despite being FCA registered (I checked). It's not something I could see them getting fined for, but it ties into the theme of trust: how do you convey trust if you don't show your regulated number? It's important for consumers to be able to verify a firm isn't taking advantage of their details for marketing gain, so seeing it missing from the footer made me feel a little uneasy. UX Duty flagged it as high risk, because it's the kind of thing that could indicate a firm is acting without being properly registered — a huge issue if that were the case.

Amelia: Do you think that's an oversight or a technicality?

Russ: Based on everything else on their site, I'd say a technicality.

Paul: I wonder — regulated firms are generally required to display their FCA number across the site, but could it be a case where there's a separate marketing-facing company and a separate regulated mortgage-services company, and someone decided the number wasn't needed on the marketing site? Even so, from a trust perspective, that's a poor decision — showing the number tells a visitor "this is the real deal, you can look us up." Not showing it feels like an open goal.

Russ: Yeah, it seems minor in the scheme of things, but it's actually quite a major omission from the footer, or anywhere on the site. It would set off a red flag for me about whether to contact them — it doesn't benefit them at all. It should be there for the parent or group company if that's the registered entity, with the regulated activities carried out under that registration.

Amelia: Moving on to the next finding, and we're back to accessibility again.

Russ: Yes — and we might be on this for a little while, so I'll fold in the last finding too. This one's on Firm C, on the complaints page: the buttons can't be accessed by a screen reader, because they don't have accessible names. We picked up on it partly because of where it sits in the journey — someone making a complaint might be doing so because they can't use the site, or can't understand its communications, and might rely on a screen reader because audio is easier for them than text. But they can't get through the complaints process because the buttons aren't labelled for assistive technology. I understand accessibility is hard to get fully right, but in these key journeys, firms really need to make the effort.

Paul: This keeps coming up across our reviews. I wonder if it's because the people building these services don't have first-hand experience of what it's like to use something with a screen reader, no mouse, and so on. Is the advice to spend a day navigating the web that way — is that something that should be part of a designer's training?

Russ: Yeah, that'd be good training. I once attended a course by WebAIM — very late at night, since it ran on US East Coast time — that went through all aspects of accessibility, screen readers, and HTML best practice. Any designer at an FCA-regulated firm should at least watch a webinar like that, or attend a course. But beyond that, there should be a checklist, and firms should be using a design system that's accessible by nature, so all the components and underlying code are accessible out of the box, and journeys are built from those accessible building blocks. It's the firm's responsibility to make sure the whole design and production team understands accessibility and builds it in from the start.

Pat: I think it would benefit any designer to put on a blindfold and try to carry out a few common tasks using a screen reader, just to get a feel for how difficult it can be and how screen readers actually work — it'll open your eyes. Excuse the pun.

Amelia: It must be incredibly frustrating if you rely on this and can't access services that everyone else can.

Russ: VoiceOver on Mac is a good place to start — JAWS is another popular screen reader. You can just try navigating a website and listening to what it says. It takes a while to get used to, but it's worth it — WebAIM gave a great demo of this on their course too, and it's worth reaching out to experts in this space if you're interested.

Amelia: It's in these firms' interest, isn't it — these are potential customers, and excluding them is just poor business. And our final finding also stays on accessibility.

Russ: Not every site needs one, but two of the three firms had no accessibility statement at all, which is just best practice — explaining what standard you're conforming to, and how you've approached accessibility. Ironically, Firm C, which did have an accessibility statement, claimed all pages on the site were WCAG AA approved — but UX Duty picked up 34 errors across six pages. You have to actually meet the standard you claim in your accessibility statement, not just have it there for appearances.

Amelia: How important is it to have an accessibility statement?

Russ: If you're not actually following it, it's pretty useless. I'd guarantee most accessibility statements on the web claim WCAG AA conformance while the site still has real issues — there's a big gap. It's frustrating. I don't have access needs myself — I have a stammer I've grown up with, but it doesn't affect how I interact with a computer, aside from things like voice commands or fixed dictation. But it feels like the whole industry needs a shake-up to actually meet what these accessibility statements claim. Like we've said before, Consumer Duty feels like it's there to force that shift in financial services.

Paul: It's telling that the only firm with an accessibility statement was also the one that dropped the ball on screen reader support in its complaints form. None of this is individually that hard to implement correctly, but it just doesn't seem to be a priority, and nobody seems to get on top of it. I keep coming back to the idea that people simply aren't exposed to how beneficial getting this right is for people who rely on it.

I remember working on a project with a major search engine, building a browser plugin to help people understand content on the web. Watching screen recordings of people with different access needs using that tool revealed things I'd never have considered — a paragraph that made no sense to them and needed to be simplified, for instance. I think it should be required, for anyone working on this stuff, to have some real exposure to what it's like living with different access needs, and to understand that this isn't an add-on for spare time — it's fundamental to the system.

Pat: I think you're hitting the nail on the head — it's just not prioritised. A lot of the time, a website build falls to the marketing team, whose objective is to drive conversions and stick to brand guidelines — which is fine, that should be a top objective. But in a regulated environment like financial services, there should be an accessibility or customer UX team deeply involved in the project too, with a proper business case: either "we'll get fined if we don't do this properly," or "if we do it properly, we'll see a 5–10% increase in conversions from people who otherwise couldn't use the site."

Paul: The other part of that business case is that something built to accessibility standards is usually better for everyone — a site built with the simplest code and the fewest unnecessary bells and whistles is usually easier to use and more pleasant overall. There's almost no argument against doing this properly from the start, because it isn't even extra investment if you do.

Russ: In terms of validating it, I think giving designers and developers that first-hand experience is useful, but the only true way to validate is testing with people who actually have access needs. As part of QA and testing, and I've been banging this drum for a long time — a user-centred approach. On that project Paul mentioned, with the plugin to improve website comprehension, we ran ten testing sessions over ten weeks with people with varying access needs, specifically looking at the "bookends." One of the biggest learnings was that if something works for someone who struggles to read text and relies mostly on imagery to understand a page, it will work for everyone else across the spectrum. Testing with the bookends — someone with extreme access needs through to someone without — covers everyone in between. That process, actually testing, getting feedback, iterating, and validating before launch, is really important. Even if you score 100% on automated checks, you still want validation from real users, because they might use the product in ways you didn't anticipate. It's about user-centred design — digital equality, at the end of the day — and bringing those people into the process.

Paul: I remember watching one of those user testing sessions — the product had a feature that used emojis to help communicate what was on a page. Before watching it, I thought, "why does it need emojis?" Then I watched someone actually interact with it and respond to them, and realised the emojis genuinely helped them comprehend what was going on. You just don't have any real concept of that until you see it in action.

Pat: That was a fascinating example. Something I learned from that session about some people with autism was that a lot of them struggle to read emotion not just from face-to-face interaction, but from written copy too — they can't always pick up tone. Adding emojis helped give context, letting them work out whether an article was, say, upbeat, angry, or emotional, which they'd otherwise struggle to detect.

Russ: And all of that only came out through usability testing — without it, we'd never have known. If that product had gone to market without testing, we'd never have had that feedback to evolve it properly. So my suggestion is: if firms are rolling out new features, test them with people with access needs — they'll come up with better ideas as a result, and the product will actually be usable when it goes live.

Paul: And it also benefits everyone — I don't have access needs myself, but I could genuinely see myself using that product, simply because it made the experience easier and reduced the mental effort of reviewing things. You end up with a better product for everyone.

Russ: Reading level was a big factor in that product too — we looked at different reading grades. Once the plugin was installed, it would estimate the reading level of a page, and you could adjust that in the sidebar to make it easier to understand — though some people actually preferred slightly harder copy, because that's just how they were wired. So it's about giving people options, and from a Consumer Duty perspective, using plain language and explaining acronyms as standard practice in content production — something we've picked up on quite a few times now.

Amelia: I'm sure accessibility will come up in our final teardown next week too, which we'll talk about a bit more after a game of Jargon Busters. For anyone who hasn't played, I've got a list of industry terms, and each week I put the guys to the test to explain what they mean. How are we feeling this week?

Paul: Hopeful — we've had a couple of good weeks, haven't we?

Pat: Confident.

Russ: I really don't know until you say it.

Amelia: This week's word is "stagflation." Who wants to give it a go?

Pat: It's like extreme inflation, where it's completely out of control.

Paul: I reckon it's the opposite — like "stagnation," where inflation stalls. I've definitely heard the term.

Pat: Yeah, that makes more sense, to be fair.

Russ: If something's stagnant, it's still or not moving — I'd go with that theory too.

Amelia: So the official meaning is: a period of high inflation combined with stagnant economic growth.

Russ: Ah, okay — combined with high inflation, right.

Pat: So I was on the right track, but missed the stagnant economic growth piece.

Russ: Yeah, you were probably closer than me.

Amelia: Not bad, though. We'll play more of this next week. Next Friday's the big one — 31st of July, the actual Consumer Duty anniversary, and our final teardown. What are we looking at next week?

Paul: Protection insurance — things like life cover. Another completely different area of financial services, with different stakes, and again somewhere people will struggle to fully understand what they're looking at and find it hard to compare. So it's an interesting one to dig into for the final teardown.

Amelia: Sounds like an interesting one. Thank you so much, everybody — thanks for listening, and we'll catch you next week.

Russ: Thanks, bye.

Paul: Cheers.

Pat: Cheers, everyone.