janeyp

janeyp_2

I recently read an article on reclaiming commission paid to a broker from the lender of a mortgage. Quite a few mortgage lenders were listed as paying this fee without disclosing it to the borrower. My mortgage lender was listed and has obviously got me thinking! Anyone know anymore about this?

dunstonh

janeyp wrote: »

I recently read an article on reclaiming commission paid to a broker from the lender of a mortgage. Quite a few mortgage lenders were listed as paying this fee without disclosing it to the borrower. My mortgage lender was listed and has obviously got me thinking! Anyone know anymore about this?

There has been one successful case. Thats all.

http://www.out-law.com/page-8928

The case is Wilson v Hurstanger and specific to this case was that the adviser was paid a fee for the advice. That was important as the non disclosure of commission and then receipt of it was where it fell foul as a fee had been taken as well. Also important to note was that it was not a mortgage but a loan.

Had he not taken the commission and gone fee only or had not taken a fee and gone commission only then its probable that the case would have resulted in a different outcome as it changed the relationship he had with the client. Perhaps reflected as he had to refund the commission payment but not the fee. The fee was the larger amount at £1000 whereas the commission was £240.

Until another case goes through no-one really knows.

However, commissions have been disclosed on the KFI since that was introduced. Also, key facts about our services documents (initial disclosure documents) have tended to put example figures in there since the were introduced and they would be sufficient disclosure as it doesnt require an exact figure. So, I think its fair to say anything post 2004 is unable to claim on.

You also have to be realistic and realise that the typical commission payment, when there is one, is only around 0.3% of the amount borrowed. So, a £75,000 mortgage would be £225.

So, unless you paid for advice and you know the adviser got paid a commission as well and there was no disclosure that there would be a commission payment on a document then its not worth the effort. Especially as you have to pay to put in a claim and there is a good chance it would be escalated out of the small claims court which would then see solicitors involved and further costs incurred.

It is also worth noting that no decent claims company is going near this as its not worth the effort and the chances of success are very low, as is the potential reward on a successful case and the costs of losing could be very high.