Secret Commissions?

~Brock~

sam_b2bl wrote: »

Not to be rude, But you seem to be talking out of your ar*e. Maybe its because you have wasted the last few months of your life on this website (judging by your post count). Maybe instead of getting an ego hit from givinig people sh*t advise on this forum you should man the f*ck up and step back into the real world.
Most people who post problems on here deserve to be in the sh*t they are in if they are stupid enough to sign up to such things as loans they cant afford, and insurance they decide they dont need after not making a claim.
Why has the credit crunch suddenly made every other person an expert on all things finance? Suddenly everybody is ' oh is saw this happening years ago. its those greedy stock brokers. Oh hedge funds are the problem. Bankers are all crooks. etc etc'
The simple fact is if you borrow money you have to pay it back. If you cant or wont, dont borrow it. Simple as.

Oh dear.

Whilst I have the many opposing views to Peter (and he probably knows this), I think we are able to at least respect each other's postitions on a lot of arguments.

Unfortunately you do not do yourself any favours whatsoever by posting such a rant. As a consequence, you neither do any favours to your business, which does not take a genuis to work out from your posting name. How's the weather in Cardiff?

petermb_2

~Brock~ wrote: »

Oh dear.

Whilst I have the many opposing views to Peter (and he probably knows this), I think we are able to at least respect each other's postitions on a lot of arguments.

Unfortunately you do not do yourself any favours whatsoever by posting such a rant. As a consequence, you neither do any favours to your business, which does not take a genuis to work out from your posting name. How's the weather in Cardiff?

Agreed Brock.

sam_b2bl

~Brock~ wrote: »

Oh dear.

Whilst I have the many opposing views to Peter (and he probably knows this), I think we are able to at least respect each other's postitions on a lot of arguments.

Unfortunately you do not do yourself any favours whatsoever by posting such a rant. As a consequence, you neither do any favours to your business, which does not take a genuis to work out from your posting name. How's the weather in Cardiff?

Im not looking for favours brock. I am simply giving you the honest view from somone who actually knows what they are talking about. not some unqualified no-body who sits at home all day wasting their life playing 'financial advisor' on here.
I am not on here to pick pointless arguments with anyone. I am telling you the honest truth from someone who is actually working in that market, who knows what they are talking about which seems to be a rareity on this site.

petermb_2

sam_b2bl wrote: »

Im not looking for favours brock. I am simply giving you the honest view from somone who actually knows what they are talking about. not some unqualified no-body who sits at home all day wasting their life playing 'financial advisor' on here.
I am not on here to pick pointless arguments with anyone. I am telling you the honest truth from someone who is actually working in that market, who knows what they are talking about which seems to be a rareity on this site.

Exactly. Your honest opinion. But not necessarily fact.
Sadly it is brokers and lenders who have have caused the mess we are in by your arrogant manner and ignorance of the law of the land.

You blame people like me that make claims against you, and borrowers who dont pay their payments and yet it is you guys who broke the law and are probably still breaking the law.

Then you have the gall to come on here and shout the odds about nobody knowing what they are talking about.

~Brock~

sam_b2bl wrote: »

Im not looking for favours brock. I am simply giving you the honest view from somone who actually knows what they are talking about. not some unqualified no-body who sits at home all day wasting their life playing 'financial advisor' on here.

That's a very bold opinion Sam. Whilst the honesty of your views is not disputed, I would be very wary of putting everyone but yourself in the category of poster that you describe above, and that very much includes me.

sam_b2bl wrote: »

I am not on here to pick pointless arguments with anyone. I am telling you the honest truth from someone who is actually working in that market, who knows what they are talking about which seems to be a rareity on this site.

What makes you think that others don't work in the market?

I agree that this, and most other, internet forums has is very high proportion of posters who post away without a clue what they are talking about, but you are wrong to categorise everyone with that assumption however.

I choose my posts sparingly, and only post when I know what I am saying is correct. This comes from 27 years experience in the finance industry.

Unfortunately you have let yourself down by publicly spitting your dummy out, which plays right into the hands of those you appear to have the issues with.

I am no fan of the claims industry that Peter is a part of, and regard it as having lower morals and standards than the finance industry that it purports to protect the public from. What I do recognise, however, is that they are a fact of life in todays society because whether you like it or not they are a consequence of failings within the finance industry. If your own house is in order you have nothing to worry about.

Hucks77

Passions have run high on this one!
Sam i feel your pain but ranting and swearing won't help your cause. Society drifted into a claims culture years ago so it's no suprise.....has anyone had an insurance policy jump with no claim made!?
Also banks can borrow to shore up loses (just ask Gordon for some cash!) brokers can hardly do this.

The lenders and brokers will all pay for sure but if you drive the brokers out of business and unsecured loan application declines are huge (A&L have been at 95%plus for declines) then the doorstep loan sharks will be left preying on the vulnerable.
Hardly TCF now is it......?

petermb_2

Sadly Brock I have to agree with you there, that the claims industry is full of sharks and vipers. Of that there is no doubt. Most have no clue what they are talking about and are in it for a fast buck.

There are a few of us that try to offer an ethical and moral service but I have no doubt that we will be tarred with the same brush.

The claims culture of injury and ambulance chasing is totally different to that in the Financial sector. For there to be a claim the lender/broker has to have broken the law of the land. I do not call bribery and fraud a petty infringement either.

These claims were going to happen if there was a credit crunch or not and have little to do with the malais that currently exists but it is easy for those guilty of getting us to this low point to blame it all on claims.

If there are any brokers reading this who are still in doubt, speak to me. I will gladly assist and put you right where the law is concerned. I may scare you to death in the process but I cannot change what is. I have six years of experience and knowledge in this market.

Just dont shoot the messenger. I did not create the situation the Financial Service Industry and those in it did.

petermb_2

Hucks77 wrote: »

Passions have run high on this one!
Sam i feel your pain but ranting and swearing won't help your cause. Society drifted into a claims culture years ago so it's no suprise.....has anyone had an insurance policy jump with no claim made!?
Also banks can borrow to shore up loses (just ask Gordon for some cash!) brokers can hardly do this.

The lenders and brokers will all pay for sure but if you drive the brokers out of business and unsecured loan application declines are huge (A&L have been at 95%plus for declines) then the doorstep loan sharks will be left preying on the vulnerable.
Hardly TCF now is it......?

What a lovely line
" You want the truth, You cant handle the truth"

The truth is that the lenders will drive you brokers out of business. For the simple reason is that they cannot really control you. If you dont follow the rules that are laid down it is not only you the broker who suffers as the lender gets sucked in too.

They have a much bigger price to pay than you. You may have to pay your broker fee back and your commission but the lender could face having a voidable loan on their hands.

The chances are that the lender will cop for the lot and you brokers will walk away.

This is serious stuff you guys have been playing with and didnt even know. But then the lenders did know about it and did not tell you. They thought they had covered their backs but did not inform brokers of what they knew.

The truth is the lenders thought that you brokers were going to carry the can if the truth came out. They believed that non disclosure was going to be just like the pensions scandal and the endowment scandals and they would be immune while the brokers and salesmen took all the flack.

It has backfired on them.

You see, coming from your own ranks, having once been an IFA, I know exactly what it is all about.

How many of you knew that it was illegal not to disclose your commissions? The lenders knew in the late nineties. What do you think the MCCB and FISA was all about? The Mortgage Code was created in 1998. Funnily enough the FISA booklet spoke of commission and fees for the first time in, yes you guessed it, 1998.

All to do with covering the lender's back and intending to leave you guys out to dry.

Why do you think I get so angry about this stuff. The lenders and insurance companies that I introduced my clients to did not have the decency to tell me either.

Hucks77

petermb wrote: »

What a lovely line
" You want the truth, You cant handle the truth"

The truth is that the lenders will drive you brokers out of business. For the simple reason is that they cannot really control you. If you dont follow the rules that are laid down it is not only you the broker who suffers as the lender gets sucked in too.

They have a much bigger price to pay than you. You may have to pay your broker fee back and your commission but the lender could face having a voidable loan on their hands.

The chances are that the lender will cop for the lot and you brokers will walk away.

This is serious stuff you guys have been playing with and didnt even know. But then the lenders did know about it and did not tell you. They thought they had covered their backs but did not inform brokers of what they knew.

The truth is the lenders thought that you brokers were going to carry the can if the truth came out. They believed that non disclosure was going to be just like the pensions scandal and the endowment scandals and they would be immune while the brokers and salesmen took all the flack.

It has backfired on them.

You see, coming from your own ranks, having once been an IFA, I know exactly what it is all about.

How many of you knew that it was illegal not to disclose your commissions? The lenders knew in the late nineties. What do you think the MCCB and FISA was all about? The Mortgage Code was created in 1998. Funnily enough the FISA booklet spoke of commission and fees for the first time in, yes you guessed it, 1998.

All to do with covering the lender's back and intending to leave you guys out to dry.

Why do you think I get so angry about this stuff. The lenders and insurance companies that I introduced my clients to did not have the decency to tell me either.

Could it really be unenforcable not disclosing the commissions? If so then the commission against the net loan if lost will be small fry.
If the lenders knew this and didn't bother to follow it through then it's their fault entirely.
From a brokerage point of view it seems harsh to hammer them for redress?

This thread from memory is relating to a secured loan. When all secured loans became regualted consumer credit contracts who was responsible for ensuring commissions were disclosed?

CAT standard stated that over a certain threshold the commission in actual money had to be disclosed (£250?) but did anyone in black and white state that THIS has to be done for a secured loan?

I hope your knowledge Peter will shed some light on this for me! cheers

petermb_2

I hope your knowledge Peter will shed some light on this for me! cheers[/quote]

It really makes no difference if it is loan or a mortgage.
But lets refer only to secured loans if that is your interest.
The law of agency is quite clear that the broker is responsible for disclosing the commission. A client has the opportunity to go back to the broker if they choose to.
However, there are two separate issues here. The paying and receiving a bribe make both lender and broker are jointly and severally liable. This mean that the client can seek redress from either or both.

I agree with you that it is very harsh to chase a broker for his part in this when the lenders knew all along and did not advise the broker of the fact. I would therefore never seek redress from a broker.

The industry thought that as the Secured market was "unregulated" the emphasis on disclosure was different to that with mortgages. This is totally untrue. The law of agency is common law. The same for all industries and professions. There has always been a need for brokers in the scured market to disclose.

The lenders knew that from the mid nineties. They did something about it to help protect themselves. The FISA booklet discusses the fact that the broker may receive a commission in addition to any fee charged to the client. This is just enough to prevent the commission from being a secret. Just enough to prevent the lender from having a voidable agreement on their hands. It is still insufficient to let both parties completely off the hook.

In most offer docs the broker fee is there under FSA regulation. If it is not there then I recomend that you make sure that you provide a separate document. I would strongly suggest that you get the client to sign a copy of the document to confirm that they have been shown the doc. You then have evidence that the client has given informed consent for the retention of any commission by the broker. ( That is the exact terminology used in Agency Law.

It was a common misconception about the £250. An error on the part of the MCCB that commissions under £250 did not have to be fully disclosed. This was blow out of the window by Hurstanger v Wilson as the commission was only £240 in that instance.

I hope this clarifies the situation for any doubters. This could bite you if you ignore it or underestimate the seriousness of it as some seem to be doing.

To say "What difference does it make if the client knows about the commission or not?" is basically professional hari kari .