The consumer protection regulatory framework requires that lenders must, before concluding a mortgage credit agreement, assess the consumer's creditworthiness and this is to be carried out on the basis of the consumer's income, expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. The information provided for this assessment must also be appropriately verified, including through reference to independently verifiable documentation where necessary.
In particular, the Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. Regulated entities must gather and record sufficient information from the consumer prior to offering, recommending, arranging or providing a product or service appropriate to that consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to provide a professional service and must include details of the consumer’s needs and objectives, personal circumstances and financial situation. A regulated entity must endeavour to have the consumer certify the accuracy of the information it has provided to the regulated entity. Prior to providing a mortgage to a personal consumer, a mortgage lender (or intermediary where relevant) must have had sight of all original supporting documentation evidencing the consumer’s identity and ability to repay. However, it could be noted that the Code or any other consumer protection regulatory requirement does not specify any requirements that distinguish between applicants who are paid in cash and those who are paid by cheque/electronic transfer.
While regulated lenders must comply with the legal and consumer protection regulatory framework requirements, the extension of credit by lenders to potential customers is ultimately a commercial decision for the lender themselves and each lender will have its own individual credit lending policies and make its own lending decisions in the context of its lending policies. However, if an individual consumer is not satisfied with the way a financial service provider is providing a financial service, s/he may make a complaint to the independent Financial Services and Pensions Ombudsman.