How we are supporting you in creating better consumer outcomes – Consumer Duty page April 2023

Our owner-occupier products fall into 6 categories, and we have created a Product Information Document (PID) for each. When deciding what product to recommend to their client, Mortgage intermediaries can select the Product Information Document relevant to the product, to understand more.

These Product Information Documents (PID) contain information for intermediaries about the product:

• Characteristics and benefits
• Target market assessment and distribution strategy
• How it relates to customers with characteristics of vulnerability
• Our assessment of value

We have worked in conjunction with advice from IMLA and UK Finance to ensure that these documents comply fully with our responsibilities as a lender, and support everyone in the borrower journey in achieving the best possible outcomes for our mortgage clients.

All 6 of the documents are available at our Consumer Duty download page here

To create the Product Information Documents for our intermediary partners, we have defined 6 different types of product categories which make up the Foundation Home Loans product range.

How we have assessed each product

We have assessed our mortgage products based on;

• How the product meets the needs, characteristics, and objectives of customers in the identified target market.
• Whether the intended distribution strategy remains appropriate for the target market and
• That the Product provides fair value to customers in the target market (i.e. the total benefits are proportionate to total costs).

The characteristics and benefits of our products

Our mortgage products are designed to meet the needs of a target group, most notably those who are unable or choose not to access the high street for a mortgage due to specialist criteria needs.

The product features and criteria are designed to support these needs by offering a range of characteristics and benefits. Each of these characteristics and benefits can be found on the relevant Product Information Document – all of which can be downloaded here.

In addition to these PIDs, Full eligibility criteria including credit tiers and current product range can be accessed on our intermediary website

Target Markets of our mortgage products

We have segmented the target customers for our Products, recognising their different needs to enable you to tailor the services you provide when you distribute the Product. We have represented each target market for each product on the PID, breaking them down by:

• Customer circumstance, e.g. Those who either choose or fall outside of Mainstream lenders’ criteria due to credit score, their employment or income or past credit events.
• Distribution Strategy, e.g. Available through Intermediaries only
• Customer needs and objectives, e.g. Access to specialist lending criteria particularly around historical credit events or complex income/employment

We have also detailed on the PID for each product who it is NOT intended for.

How we are supporting vulnerable customers

Our residential mortgage products are designed for customers purchasing or remortgaging a residential property.  We do not consider that this target market represents a higher risk of vulnerability than any other, however as with any target segment the customer base may include some customers with characteristics of vulnerability or who will experience vulnerability over time. 

No assumption has been made that any customers in this group will have an enhanced understanding of the mortgage market and we expect all customers to be offered a level of advice and support that ensures they understand the information being presented to them and the implications of the arrangement they are entering into to reduce the risk of harm occurring.

Our mortgage products are assessed as part of the product design process to ensure we do not inadvertently introduce product elements which could disadvantage vulnerable customers and lead to foreseeable harm. Where our intermediary partners identify a customer with vulnerable characteristics, they should notify us as part of the application process.

We have in place a framework to achieve good outcomes for vulnerable customers, which includes:

• Education and training for our staff to ensure they have the appropriate skills and experience to recognise and respond to the needs of vulnerable customers
• Suitable customer service provision and communications
• Flexible policies, where appropriate, to support vulnerable customers
• Monitoring to ensure we continue to meet and respond to the needs of customers with characteristics of vulnerability.

Intermediaries should continue to comply with your obligations to ensure that you treat customers in vulnerable circumstances fairly.

Please contact us if you need any further information about how we support the needs of all our customers in relation to the Product.

How we assess value

We have developed a comprehensive and robust assessment process for our products which evaluates several aspects of our business to determine price and value. This analysis is used to ascertain whether the Product delivers fair value for customers.

The outcomes of the assessment process are presented to the Board, allowing for challenge and further investigation before we sign-off the outcomes and share the summary of our assessment with you.

• All products are assessed for
• Benefits
• Price
• Costs and limitations

And these are detailed for each product type on its relevant Product Information Document. See the Download page here

You can also find out information relating to your customer on rates, fees and charges on the ESIS Document and our Tariff of Mortgage Fees here.

For guidance on how to use the Product Information Documents, please refer to the guidance from your mortgage club or network. If you have any queries about the content of the Product information Documents, you can contact us in the first instance at marketing@foundationhomeloans.co.uk

See our Product Information Documents

FOR INTERMEDIARIES ONLY