Another unjustifiable rip off charge

regularsaver1

Get them to amend the Key facts illustration as you have taken their insurance?

remember this lender will charge you a fee to leave later too

arkie

Poppycat wrote:

I read the keyfacts, the fact is they are misleading. It states on the KFI

If building insurance is not taken out through xxx country mortgage-first national then a charge of £25 will be payable upon completion

I paid for building insurance from them, it stated on the insurance document xxx mortgage centre. They also charging me £599 instead of what mentioned on the KFI, again misleading. The bank claims there £599 has always been that, I was told by the mortgage centre that it was an offer which ended on the 17/11 3 days after I applied. Some one messed up and they expect me to pay for there mistakes, eh no I wont.

Even with the £25 charge, how can any company justify that charge just to see that you have insurance? its another unjustifiable charge and I will be challenging this, I don't like being ripped off particularly as I have very little money, its particularly sickening when they rip off merchants make vast amounts of money at my expense.

Poppycat, did you get a face to face visit? or did you do this over the phone?
The benefit of a face to face visit , is that you can study the KFI with the broker, and a massive benefit of using a local broker is you can get them back to run through the mortgage offer, The lender you are going with First National (GE Home Lending) had a special £99 arrangement fee which was only available for a certain period of time before they withdrew it, if you used a postal service a few things could have caused a delay
1 The post.... (if you were using a local broker you wouldnt have had such a delay)
2 The valuation of your property ( The phone broker would not have instructed a valuation report until they had recieved all your documents, a good local broker could have instructed a valaution from their mobile phone in your house)...saving days/if not a week in time

In my experience from appointment to offer normally is 10 working days with another for 5 days for completion.

Finally if you used a phone broker, they will have now cost you alot more money, the 599 added to your mortgage attracts interest etc...

Although some people want to do it all themselves, getting a mortgage is one of the most important things in your life, why make such a decision over the phone, would you cut your own hair if somebody was telling you how to do it down the phone????

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I am a Mortgage Adviser

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Poppycat

HI yes I saw the broker face to face at his works, it was a EA nearby.

He asked us for all our details, income streams. When asked for proof of income etc, he suggested to send minimum amount wven though we had it all, he said they can always ask for it later, which they did twice.

Thanks

Gorgeous_George

It always seems odd that you borrow £100,000 and they risk losing your custom overa £25 admin fee.

Reminds me when I bought my 1st house and the vendor wanted 350 for the washing machine. We bought it biut I did think that, as I was paying him £24,000 for his house he could have let me have the machine. In fairness, it lasted the two years that we stayed there with no problems. I gave it to the owners as a gesture of goodwill.

You would have thought that, rather than charging every customer £25, they could check each policy once, charging the insurance company £25 to add their policy to a list of approved mortgages. Of course, the charge is designed to keep with company xxx as that is where the salesmen make their commission.



GG

dwsjarcmcd

Poppycat,
1. The £25 fee - Many, but not all lenders charge this fee and it has been referred to the Ombudsman many times, who deems it 'fair' at that level. In practice lenders use this as an income stream and I would be surprised if anyone actually checks the cover in force. I guess what I am saying is that I doubt you will be successful with your complaint, however, I have sympathy with your 'rip-off' view.
2. The arrangement fee - Many lenders have a split fee, where you pay a smaller amount on application with the rest being debited on completion. Could this have happened here i.e £99 up front, with £500 on completion?
3. The exit fee - This is the one where you may have some success and it could be worth a letter. There are instances where lenders have waived these in the past.
Good luck!!

Poppycat

Thanks. I am just going by there wording and what we were told at the time, anyone who read it would I am sure think at least missleading. The whole idea of the KFI is that customers no what charges are incurred and can compare different products.

I dont expect businesses to come back after a short while and say it will costs more.

Thanks

I will exchausI amt there own complaints procedure, and then if necessary got to the ombudsman.

Madjock

Peter you can see my name, so that's who i am. i don't quite understand your hostility.
If Poppycat has taken out insurance with the lender, they won't pay the £25. If they've taken it out with someone other than the lender they will.

peterbaker

Madjock, your bolded comment implies that you might think all customers should wade through every twist and turn of the small print AND second guess where unscrupulous legal advisers / directors of the lending company and/or broker might try to exploit the contract by extracting fees rip-off style either at the point of sale or on some future date.

Your post also seems to be trying to condone Halifax applying any future fee they fancy despite them feeling sufficiently embroiled in an endowment mis-selling solution in 2003 to have waived the point of sale fees. It just doesn't follow that they can forget all that now, and just start milking again.

Thanks largely to the wholesale reneging on the endowment concept (quaintly dubbed endowment mis-selling to put a brake on loss of lending profits i.e. avoid a nationwide "run on the bank" situation), a travesty of epic proportions affecting a whole generation of which you may or may not be part, the mortgage lending industry has no credibility and is now based on shifting sands.

However, the insurance admin fee has always been a rip-off. It was dreamt up in the mid 80s by lenders who had been enjoying huge commissions from making the arrangment of insurance via their agency a condition of the mortgage loan.

What happened in the mid-eighties? They were busted that's what. They were told that it was now illegal to make an anti-competitive condition like that and they started losing insurance business hand over fist. Moreover, once proper competition was permitted, the premium rates fell and the lenders lost even more profit. Their ridiculous 40% commission was also soon eroded although I believe these levels have probably crept in again at the customers cost of course for any large book of business controlled by a particularly large lender or broker. Some of them own their own insurance companies now of course, enabling all kinds of intercompany arrangements not easily decoded by the paying customers.

Anyway, back in the 80s, some bright spark suggested they needed to invent a brake on the business going out the door and that's when £15 admin charges crept in for any customer bold enough to look over the fence. Soon it was to be increased to £25, no doubt by another bright spark with continuing notions of the success of high street lending cartels of the 70s.

But £25 is as far as it got (with the mainstream at any rate) before a number of competitor brokers/insurers took it upon themselves to provide the antidote, and over the years have offered to pay the admin charge for anyone who copped it just for wanting to insure with them and not their lender. AA Insurance were one of the first, way back in the late 80s. From time to time other players in the Household Insurance market have used the same refund gimmick in blurb that continually drops through our letterboxes when they want to grab market share.

I have yet to have been successfully charged such a fee myself despite changing my lender and insurer quite often. One or two lenders have protested, I recall, when I said No. But I stood my ground.

But Madjock, your emphatic post suggests you condone these rip-off fees and you are trying to convince numbers of people that they are normal.

We are perhaps diametrically opposed in our views and as such, dear friend, I suppose my arguments are naturally hostile to yours.

Which is why I asked who you were, so MoneySavers know who to avoid.

Oh, and Merry Christmas!!

Poppycat

Thanks Peter for the explanation it makes sense on why they do it.

Madjock I havent taken offence by previous comments. Thank anayway

peterbaker

Ha! Didn't think anyone would still be up! I've been half watching "Jaws" on tv and that reminded me of the sharks out there!

Merry Christmas!!