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    • Sapple
    • By Sapple 14th Sep 17, 10:15 PM
    • 6Posts
    • 2Thanks
    Sapple
    Am I being shafted by mortgage broker
    • #1
    • 14th Sep 17, 10:15 PM
    Am I being shafted by mortgage broker 14th Sep 17 at 10:15 PM
    Hi,

    Not sure if this should live on the insurance list, it is related to life insurance... but it's more like, I've been screwed over by a mortgage broker.

    2 years ago, I used a mortage broker to remortgage. He was ever so keen to sell me insurance - I was tempted in with a fee waiver.. stupid of me I guess but I went for it. Anyway, didn't think anything much of it - but more recently I decided to sort out my finances and I thought I would deal with this insurance policy. I hadn't ever recieved any documents for this policy.. and the broker set up on my behalf, so I really knew nothing about it. So I wrote to the inurance company asking for docs so I could check it out... but they never replied.. and didn't send docs... so I stopped paying.. It wasn't long after this that the broker got in touch asking what was going on. Apparently I needed to keep the policy for 48 months otherwise I would be liable for all the fees that were waived (and there quite a lot). I questioned it... I mean it was 2 years ago and It was all done over the phone. I guess (and I don't even recall) that something was sent to me in the post and I signed it.. Anyway, the broker has sent me a photocopy of the waiver agreement that I signed.. and sure it does refer to 48 months...

    at this point, I [still] have no idea what insurance I had.

    The fees being demanded now, are higher than what was asked at the time (so the broker said on the phone back then that his fees were around £200 - but the paperwork now says 1% of the arranged mortgage lend amount (almost £1000), or the amount of "lost" commission from the insurance company - which equates to nearly £400.

    The fee waiver, has the incorrect address on it. I guess I must have still signed it - but the address was 2 years out of date at the time (broker must have used details from my previous address before the original mortgage arrangment - as he dealt with that too).

    do I really have to pay this.. sure I was stupid for going along with it, and for signing the dam form, but it just feels like I'm being screwed. The fact that all this was discussed over the phone, details don't seem quite right, I've no idea what I was covered for (or even if the broker used correct information when applying for it).
Page 1
    • zx81
    • By zx81 14th Sep 17, 10:21 PM
    • 14,133 Posts
    • 14,819 Thanks
    zx81
    • #2
    • 14th Sep 17, 10:21 PM
    • #2
    • 14th Sep 17, 10:21 PM
    The evidence certainly suggests you need to pay it.
    • ACG
    • By ACG 14th Sep 17, 11:03 PM
    • 15,786 Posts
    • 8,081 Thanks
    ACG
    • #3
    • 14th Sep 17, 11:03 PM
    • #3
    • 14th Sep 17, 11:03 PM
    What does the fee agreement say you will need to pay?
    If it says lost commission, then it would be (more or less) commission divided by 48 x 24 (2 years) - not all insurers doivide the commission equally over 48 months.

    The commission would be on the quote, if you do not have that then you need to get a copy - you can get a copy from the broker.

    It is not a practice I do personally, but you did agree to it.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Sapple
    • By Sapple 15th Sep 17, 7:24 AM
    • 6 Posts
    • 2 Thanks
    Sapple
    • #4
    • 15th Sep 17, 7:24 AM
    • #4
    • 15th Sep 17, 7:24 AM
    Thanks for replying!

    I guess I'm clutching at straws - just annoyed about being asked to pay yes I agreed, so the lesson is probably not to be stupid, read things carefully and don't agree to dumbass things.

    I don't have a quote, but fee waiver form states;

    "6. In relation to any policies arranged or facilitated by the Arranger, the Arranger agrees that the obligation of the client to pay the remaining fee to the arranger will;

    a. be defferered until such times as 48 months premium payments in relation to such policies has been paid in full

    b. upon payment of the 48th monthly premium by or on behalf of the client, be waived by the arranger.

    7. If any policies are cancelled before 48 monthly premiums have been paid in full, then the provider of such policies ("The Provider") may reclaim part or all of the commission paid by the provider to the Arranger in relation to such policies. In these circumstances, the remaining fee shall, subject to clause 8 below, become payable by the client immediately on demand by the arranger.

    8. If the commission which is reclaimed by the provider from the arrangement under clause 7 is less than the remaining fee, then a sum equal to such reclaimed commission will become payable by the client under clause 7 (in place of the remaining fee).

    9. All payments to be made by the client under this agreement shall be made in full without any set-off or withholding for any counterclaim, unless the client is required to do so by law.

    10 If any amount is not paid when due and payable under this agreement such sum will bear interest from te due date until payment is made in full, both before and after any judgement, at 4% per annum over the Royal Bank of Scotland plc base rate from time to time."
    • silvercar
    • By silvercar 15th Sep 17, 8:05 AM
    • 36,053 Posts
    • 152,274 Thanks
    silvercar
    • #5
    • 15th Sep 17, 8:05 AM
    • #5
    • 15th Sep 17, 8:05 AM
    Ask the broker for details of the insurance policy.

    Funny that the broker can quickly send you the waiver but you still don't have policy documents!
    • Voyager2002
    • By Voyager2002 15th Sep 17, 8:40 AM
    • 11,663 Posts
    • 7,902 Thanks
    Voyager2002
    • #6
    • 15th Sep 17, 8:40 AM
    • #6
    • 15th Sep 17, 8:40 AM
    Make a formal complaint about the failure to send you policy documents, and if necessary escalate to the Ombudsman service. Ask for compensation equivalent to the premiums you will have paid. After all, an insurance company that does not respond to basic enquiries is unlikely to pay out for a claim, so you had no benefit from paying those premiums.
    • ACG
    • By ACG 15th Sep 17, 9:33 AM
    • 15,786 Posts
    • 8,081 Thanks
    ACG
    • #7
    • 15th Sep 17, 9:33 AM
    • #7
    • 15th Sep 17, 9:33 AM
    You could possibly argue that the contract is not clear or fair? I had to read over parts of it twice to understand it.

    It is also not clear what is due. Nowhere (on what you have posted) does it state you will have to pay a fee that the broker will charge in the future - and even if it did, I doubt that would stand up in any court.

    I would personally argue that at most you would either need to pay the difference between the fee charged at the time and the commission received (after clawbacks) OR the commission clawedback. But it does not make it crystal clear what is due - in my opinion.

    It would be interesting to see what a solicitor says if you wanted to take it that far.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • amnblog
    • By amnblog 15th Sep 17, 9:59 AM
    • 10,039 Posts
    • 3,906 Thanks
    amnblog
    • #8
    • 15th Sep 17, 9:59 AM
    • #8
    • 15th Sep 17, 9:59 AM
    Your saying that you were paying for an insurance policy and never had any paperwork.

    Further that you wrote to the insurance company and they never replied so you cancelled the payment? If, we assume you wrote to the right place and their details of your address are correct this would be highly unusual. Did you not call the insurer?

    You apparently did not ask the broker what was happening as they needed to call you once they were informed you had cancelled.

    Your biggest concern should be that you are now not insured. If the Broker advised you to take insurance there would be a need for it given your circumstances.

    Or did you take the insurance out solely to migitate the broker fee in the first place, with every intention of cancelling it down the line?
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • dunstonh
    • By dunstonh 15th Sep 17, 11:12 AM
    • 89,597 Posts
    • 56,075 Thanks
    dunstonh
    • #9
    • 15th Sep 17, 11:12 AM
    • #9
    • 15th Sep 17, 11:12 AM
    Make a formal complaint about the failure to send you policy documents, and if necessary escalate to the Ombudsman service.
    It should be noted that the FOS dont generally rule on fee agreements and say its outside of their remit.

    The method of having commission offset for a fee is quite acceptable and allowed. The fee agreement would be expected to cover this off.

    We have used it a number of times and have taken a person to the small claims court who cancelled a plan early and created a clawback and refused to pay the difference. The judge ruled in our favour. However, we did it fairly and the commission figure was taken exactly to match a specific fee and the client was fully aware of what was done and why. He was trying it on thinking he was being clever.

    There are some firms that dont use this method correctly and do not have the documentation to support their attempts at getting you to pay. The key is in the fee agreement you signed. If its in there, you are liable. If its not, then they have nothing to show the judge to support their claim.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Sapple
    • By Sapple 15th Sep 17, 11:58 AM
    • 6 Posts
    • 2 Thanks
    Sapple
    Thanks again for all the replies.

    I'm gonna have a call with the broker this afternoon as I've some questions for him. I will post the outcome.

    regarding a few points made above,

    1. I did call the insurance company, but I was on hold and after a short while I gave up. Yes I should have chased this up further, I concede that.

    2. I didn't particularly plan to cancel the policy from the start - yes I was most definitely drawn in with the fee waiver, but no I wasn't trying to be sneaky. I was paying the policy for almost 2 years. It wasn't massively expensive each month and I didn't pay much attention to it. It was only more recently that I was going through my finances, that I looked into it, albeit a little lazily. When I didn't hear from the insurance company, It seemed fairly reasonable to stop paying.

    3. Should I have contacted the broker... I guess so, but it didn't occur to me - I mean I'm paying the insurance company.

    4. Is it possible that the insurance company has incorrect details for me... yes, the broker set this up on my behalf and I never got docs - so there could be any details used. This is a question I have for the broker (i.e. what details did he use). Begs the question... if the details are incorrect, was I ever covered. The waiver form I signed (that they have just sent to me) has the wrong address listed in the "This agreement is between: ..." section. Since it was part of a mortgage arrangment for the same address (which was correct).. seems funny that they managed to make this mistake. Anyway, suppose it's moot since I still signed and erm.. well presumably I didn't read.

    5. My need for insurance - well yes, hopefully the broker was giving me good advice, of course evidently he is making good sums of money for selling these policies #justsaying. i'm not concerned about being uninsured at the moment as my circumstances are slightly different and I have some protection via my employer.

    6.I'm not trying it on. Ultimately, I've been asked to pay a large sum of money that I wasn't expecting (it may well be the case that I should very much have been expecting it, and it's my own fault/stupidity, but I'm left feeling pretty miserable about it.
    • Sapple
    • By Sapple 15th Sep 17, 3:15 PM
    • 6 Posts
    • 2 Thanks
    Sapple
    So quite a positive phone call with the broker (well actually someone from the brokers office). Turns out that yes, the insurance company had incorrect details send on from the broker. (also why they may not have replied to my letter as my details or at least some of them would not have matched).

    Since calling this afternoon, broker has contacted the insurance company, and I've had an email from them with a policy overview - which is good. I've been told I should do a SAR request (whatever that is ) to find out exactly what the details are (and from this, I should be able to see if they have all the correct details for me and whether I want to re-instate the policy or not). Broker agrees to continue the waver if the policy is re-instated. So something to at least move forward with.
    • ACG
    • By ACG 15th Sep 17, 4:01 PM
    • 15,786 Posts
    • 8,081 Thanks
    ACG
    Why would you need to do a SAR? Can the broker not send you the policy documents?

    SAR = Subject Access Request.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Sapple
    • By Sapple 15th Sep 17, 4:21 PM
    • 6 Posts
    • 2 Thanks
    Sapple
    so apparently - the insurance company won't discuss anything (detail wise) with the brokers office. So they told me to get in touch with the insurance company and discuss all the personal details attached with the policy (so things like, health history etc - things I want to check, because I really don't know if they will be correct on the policy - I wouldn't like to re-instate the policy without going through all these details).

    The brokers office used the term SAR (in my layman terms.. I just call em up and ask to discuss my policy)
    • dunstonh
    • By dunstonh 15th Sep 17, 4:54 PM
    • 89,597 Posts
    • 56,075 Thanks
    dunstonh
    so apparently - the insurance company won't discuss anything (detail wise) with the brokers office.
    This suggests that the policy is no longer on their agency. If the policy is recorded against the agency of the adviser, then the provider can discuss virtually everything with the adviser.

    Maybe that is also why the firm suggested a SAR.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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