Right to buy mortgage mis-selling

edited 30 November -1 at 1:00AM in Reclaiming Mortgage Fees, Council Tax, etc
5 replies 6.8K views
sallyinlancssallyinlancs Forumite
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I have been given the number of a law firm to make a possible claim for having been mis-sold a right-to-buy mortgage, or for having paid high mortgage broker fees that were added to the mortgage.

My friend's relative claimed a few thousand pounds through these people.

Does anyone have experience of this? Most of these claim companies take their fees as a percentage of your claim (from what I can see). This seems like a lot of money to lose.

Is it possible to claim yourself through the Financial Ombudsman? How difficult would that be? Is it worth the hassle or better to just let one of these claim companies deal with it?

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  • edited 24 January 2011 at 3:45PM
    dunstonhdunstonh Forumite
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    edited 24 January 2011 at 3:45PM
    or for having paid high mortgage broker fees that were added to the mortgage.

    There is not mis-sale or unlawful. There has just been one successful case in the courts on fees and that was where there was fee and commission and the commission was not disclosed. In that case the court ordered the commission to be returned (but not the fee). The broker was not tied to one lender or panel based. Mortgage commission is around 0.3% of the amount borrowed. So, for most people it isnt worth the effort and this is why most claims companies dont bother complaining on this front, even if there is a technical rule breach.
    Is it possible to claim yourself through the Financial Ombudsman?
    yes
    How difficult would that be?

    no more difficult than using a claims company. Remember that the claims company are just putting a template letter into the firm and then to the FOS after that. They have no magic way to detour the complaints process. Indeed, statistically they are less likely to succeed as they use template letters and template letters have a lower success rate than personalised letters. Plus, many firms have blacklisted some claims companies and will go out of their way to find ways to reject complaints put through those claims companies.
    Is it worth the hassle or better to just let one of these claim companies deal with it?

    You would need to tell us your reason for complaint as its unclear you have a reason from your first post (high fees is not a valid reason).
  • roonaldoroonaldo Forumite
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    to make a possible claim for having been mis-sold a right-to-buy mortgage, or for having paid high mortgage broker fees that were added to the mortgage.


    It sounds like you're not even sure what you are complaining about.

    Paying broker fees is common if you use a broker. If the fees were all declared up front and you've signed a fee agreement, then you dont really stand any chance.

    Being charged a fee to use a service is not a reason for a mis-sale.
  • Sorry for my ignorance. I must admit, I really don't understand it that well. When it comes to stuff like this, I am a dunce (a medical condition affecting memory doesn't help).

    A friend of a friend used this company and got about £5k back. Apparantly the Right To Buy companies gave bad or no advice and people were ripped off by solicitors and mortgage brokers, paying overly high fees for (again) no or bad advice.

    This guy came to see me today and he reckons I could claim for unfair mortgage broker fees, including interest paid and statutory debt interest, from which his company take a 30% fee (on a no win, no fee basis). In addition, he says I can claim for unfair solicitor's fees. (I never received any advice from the solicitor who dealt with my Right To Buy process.) The company doesn't take any cut from this claim.

    Here's what's on the paperwork from the company (who came to see me today):
    Premier Law Ltc or its appointed representatives or appointed legal practitioners will seek to obtain copies of all documentation appertaining to the client's mortgage. Where appropriate an application to the Court will be made for disclosure by the client's Lender and/or Broker for copies of the relevant Agreements. The Company will then provide and assessment of the Agreements to establish whether there is in principle a claim in respect of breaches of the Competition Act 1988, the Enterprise Act 2002, Articles 81 & 81 of the EC Treaty and Consumer Credit Act 1974, which would result in an improperly exectured Agreement or whether there has been a breach of the law of Agency by the client's broker resulting in the making of a secret commission or profit or in respect of unfair charges applied to the clients account. In the event that the Company forms the view that there has been a breach as described above, then the client's claim will be calculated and submitted to the Mortgage Lender. At the sole discretion of the company, the claim may be submitted to a Legal Practitioner to progress the claim.

    *Please note - I don't understand any of that, but am hoping that someone around here does.

    The guy who came to see me said that they deal with the same Right To Buy brokers and solicitors all the time, and that the solicitor I used, now simply refers them straight to their insurance company to deal with claims, as they have now become inundated with successful claims.

    Here is another company who deals with the same thing:

    missold-mortgage-claims.co.uk/mis-sold-right-to-buy-mortgages/

    as a new user I'm not allowed to post links, so you'll have to insert your own www.
  • dunstonhdunstonh Forumite
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    Apparantly the Right To Buy companies gave bad or no advice and people were ripped off by solicitors and mortgage brokers, paying overly high fees for (again) no or bad advice.

    I'm afraid that statement is grossly inaccurate. All IFAs and mortgage advisers cna do right to buy. To suggest that all companies gave bad advice and people were ripped off is just plain wrong. IFAs only have 2% of complaints at the FOS and only around 1/3rd of those are upheld. So, clearly there is no widespread issue like you suggest.

    It is quite possible that some paid very high charges. I have seen the fees that some mortgage advisers have and they are in my opinion disgracefully high. However, there are no rules or laws that prevent a company setting its charges at a certain level.
    This guy came to see me today and he reckons I could claim for unfair mortgage broker fees

    There has only been one successful court case on this. Thats all. And in that case it was not because they were unfair. It was because the broker was independent and paid a fee and commission and the commission was no disclosed. The court ruled the commission should be returned to client. It was about £350.
    from which his company take a 30% fee (on a no win, no fee basis).

    Their "service" is VATable. So, add another 20% to that.
    The guy who came to see me said that they deal with the same Right To Buy brokers and solicitors all the time, and that the solicitor I used, now simply refers them straight to their insurance company to deal with claims, as they have now become inundated with successful claims.

    There are about 60,000 advisers out there. So, whilst they may have identified a rogue local firm they have had success with (and its more likely in other areas than unfair fees), that doesnt mean all the others will roll over. I know I certainly wouldnt.

    If you were mis-sold, you can complain free of charge. You dont need a claims company to take chunks of money off you to make a complaint.
  • roonaldoroonaldo Forumite
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    to say you were mis-sold something because someone else was is very unfair.

    to be honest, it sounds like you are trying to unfairly gain some money as you have not given any valid reasons. Brokers can charge fee's, solicitors can charge fee's.

    what advice are you on about that the solicitors should have given you?
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