Should we make a complaint against our Mortgage Advisor?

97browng

Hi All,

To start with let me say we are now in our house (have been for a few months) and very happy in it so the below is not really going to have an impact on us now. However I want to know if I should make a complains and if so who to.

Basically our mortgage advisor was a bunch of crap and ended up costing us a lot of extra money (well money up front anyway).

So to begin with we paid just under £500 for his services and it is hard to see what he did for this.

Firstly he obviously wanted to sell us a particular mortgage as I assume he gets more commission. We basically wanted the lowest rate we could get which was a tracker. Add to this the fact fees were very low and we got cashback it seemed the best for us as investment money was low. However he kept telling us to get a specific fixed mortgage which was higher and had much larger fees. Now I know this is down to opinion but a tracker for us would have been fine and we budgeted more if rates went up anyway (our monthly spend was not high). In the end the fixed rate fell really low as it was at the end of the financial year and the company had not met quotas so we did end up getting the fixed at a better deal.

As above we did not have a lot of cash in hand so we told him that we had 10% saved for a deposit. This was to be a maximum of £14000 for the deposit. As the fees for the mortgage were £1000 we were told that these would be added to the mortgage so we did not need extra. We got accepted for the mortgage of a house at £130,000 and made an offer. However when we went in to sign the papers he told us that in fact they would not lend us all we needed and in fact we had to pay a deposit of £15,000. We also would have to pay the £1000 of fees as they would not add that to the mortgage costs. I know we could have pulled out there but we were in the middle of it now so decided to pay anyway. This meant an extra £2000 on top of our maximum or £3000 more than we expected.

This left behind us we carried on anyway. Now it came time to choose a solicitor. We looked around and got some quotes but our advisor suggested we used the in house ones as he could chase them up all the time. They were about £100 more than the others (or so we though) but were happy to go with them. So we signed up and paid £70 up front. Then we got the full quote and it was actually going to cost us £700 more as their initial price does not include any searches. We obviously cancelled but lost the £70. We went with another company who were very good but our mortgage advisor would not contact them and did not help things along at all. When we questioned him about this he said that he told us he would only be able to do this with the in house ones (what a load of crock).

Finally we wanted to work it so that we were not paying mortgage and rent at the same time. So our advisor said that the company we were going with would charge us 1 month in arrears. So working to this we rushed things along so that we would have 6 weeks to move out/in and not be paying double for rent/mortgage. However after moving into the house we got a letter from the bank saying that our first payment was due in 2 weeks. This meant that we ended up paying an extra £500 we were not expecting. I had looked through the paperwork and could not see where it states this (but there is a lot to go through). However we were 100% told that it would be a month by our advisor. I have this as all the above in writing via email from him.

So what I want to know is should I complain and who to. I know that we could have pulled out and that we should have checked when the first payment was, but when you are paying someone for advise and they tell you in writing something you expect this to be the case. I am more concerned about other people who use him as he is no good and could cost them money. Luckily I had saved enough to cover these costs but it did mean we had little left to spend on decorating/furnishing the house. It just makes me angry that we had to find an extra £3000-£4000 because of his poor advice add to this the £3500 we paid for it. If I had done it myself then I would have checked everything more thoroughly but I assumed I could trust him.

Complain or not and who to?

Thrugelmir

You had the choices and made the decisions. No-one forced you do anything. So put it all down to experience.

kingstreet

Complain to the firm the adviser represents in the first instance. If they are a member of a network they will pass on the complaint to the network to be investigated. Once you've exhausted their complaints process, if you're not happy with the result you can then escalate the matter to the Financial Ombudsman Service (FOS).

Was there something complicated in your case which made you think using a broker who would receive commission and charge you a fee was worthwhile?

Was this adviser part of the estate agency you bought through?

97browng

Hi thanks for the responses. No nothing complicated but we were first time buyers. He was not through the estate agents we bought the house from but another estate agents (whop were selling the house).

I agree he did not force us to do anything but surely someone giving financial advice has to give the correct information. If an accountant/banker gave you the wrong information which resulted in a loss then they would be investigated. At the end of the day our paid advisor advised us incorrectly.

I don't expect to get any money back or anything but I think he should be held accountable for his mistakes. I think I may get in touch with the estate agents which is the largest one in Wales and let them know my concerns and see what they say.

Thrugelmir

97browng wrote: »

Hi thanks for the responses. No nothing complicated but we were first time buyers. He was not through the estate agents we bought the house from but another estate agents (whop were selling the house).

I agree he did not force us to do anything but surely someone giving financial advice has to give the correct information. If an accountant/banker gave you the wrong information which resulted in a loss then they would be investigated. At the end of the day our paid advisor advised us incorrectly.

I don't expect to get any money back or anything but I think he should be held accountable for his mistakes. I think I may get in touch with the estate agents which is the largest one in Wales and let them know my concerns and see what they say.

Where have you lost out financially?

You seem happy with the fixed rate mortgage.

Your advisor had no control over the amount the lender was willing to advance against the property purchase.

Interest accrues from the date of completion on a property purchase. So the amount you would pay. Is irrespective of whether you make payment in 2 weeks or after 6 weeks initially. The cashflow impact is the same.

Always shop around for a solicitor as fees do differ. In recommending a certain firm there was nothing wrong in what your adviser suggested.

I do agree you should complain if felt the service was lacking. But seeking financial recompense has no grounds.

97browng

Thanks Thrugelmir but I have never said that I am seeking financial recompense. I just wanted to know about who to complain to and if I should.

I understand what you are saying but my argument is he told us in writing that this and that had been accepted and that it was going to cost this much etc...

Surely in doing this he has at best misled us. If he had told us what he could actually archive by using him then we would have gone elsewhere. A lot of promised made to us that he could not deliver on which must mean somewhere he is doing something wrong.

You ask where have we lost out. He told us the lender was giving us a certain amount and did not change this until we were in the office sitting down to sign. He must have known this and kept up the deception so that we would not pull out. Yes it means we pay off less via a mortgage but we have to get an extra £2000 which meant paying for items on credit card and paying interest.

Again with the rent issue we had to find an extra £600 in cash to pay our mortgage early because he got it wrong. This is money on a credit card again. How can the cashflow impact be the same? We thought we had to pay one months rent of £600 and in fact ended up having to spend an extra £550 on the mortgage out of the same pay packet. If you can afford to pay an extra £550 a month out of the blue then you have a far better paid job than me.

This extra £4000 in cash needed to come from somewhere so other things had to be paid for on credit card/loans which cost interest. It has meant we cant buy sofas for the house etc... So in total with just interest and balance transfer fees we must have paid at least £200 extra.

I understand what you are saying that all the money has to be paid back anyway but the issue was being told with no notice that we needed to find extra money for the next day. This is a lot harder than paying £4000 (plus interest) over 30 years.

GMS

Check the Fact Find you have been provided with and the Suitability Letter. Both of these need to be agreed and signed by you.

If you had asked for a tracker mortgage then this should be detailed in the Fact Find. If the adviser has then recommended a fixed rate product the reason for this should be clearly detailed in the Suitability Letter.

If somebody wants a tracker then this should be the product recommended to them with clear explanations as to the potential changes in payments.

Falling short on the loan amount could have bene down to credit scoring so the broker may have had no control over this. However it would have been expected for the figures to have been checked prior to submission for a guideline.

Ultimately you completed on the mortgage. If you were not happy then you should have said so prior to agreeing to complete.

By all means go through the relevant channels to make a complaint but beware of any claims management companies who offer their services. If a compalaint is there to be made you can do it yourself.

97browng

Just reading the FSA rules and it states that a mortgage broker in in breach if found;

'Deliberately misleading (or attempting to mislead) by act or omission: a client'.

There are lots of others there which we could argue. We have emails saying that they have agreed to lend us the money with a deposit of 10% from our advisor and then a few hours later we go to sing and this is not the case. I don't see how he could argue this is not the case as he has stated he has the offer on him and it his his duty to read it.

97browng

Thanks GMS.

Yes we did ask for a tracker several times and he kept pushing the fixed. As I said we are happy with the fixed rate we finally got and we did know that we were getting a fixed mortgage and not a tracker. We knew what the mortgage was and the rate it was more that he was not taking our concerns and wants on board which he should have. As said I assume he got more commission for giving us that deal.

Also as I said at the start we did sign up to it and know that we could have pulled out any time. Obviously doing this would have cost us time and money neither of which we had. We did seriously consider this and spent a lot of time thinking about it and in the end decided to go.

Once again though I don't expect to get anything for myself from this. What is done is done and I will have to live with it and I am happy with the house and mortgage its just a shame we had to spend where we did not expect to. I don't wont others to have the same problems. You may not think it but I keep a very close eye on finances and he made it very unclear and complicated as to what we had to pay and what we were getting.

I asked several times for a list of what we were paying and getting and he refused to give us this. FSA rule states this is a breach

'Deliberately failing to inform, without reasonable cause: a customer, of the fact that their understanding of a material issue is incorrect, despite being aware of their misunderstanding'. I feel this is what he was doing as we kept asking if x was correct or y and he would either ignore it or just say yes even though it is not true.

I now know that there is no point in getting an advisor and next time I will definitely do it myself.

GMS

You should have been issued with documents stating what you were applying for and reasons why a recommendation was made.

Clearly there have been some issues here. Refusing to provide illustrations is inexcusable.

I am sorry you have had a poor experience but the vast majority of brokers will act in your best interests.

Thrugelmir

97browng wrote: »

If you can afford to pay an extra £550 a month out of the blue then you have a far better paid job than me.

A few months after I bought my first flat. Interest rates rose 1% a month for 4 consecutive months from 10 to 14%. Used to walk around Sainsburys with a calculator in my hand to keep track of what was in the basket and stay within my budget. Bought most furniture second hand and raided my mothers kitchen for stuff. No credit card to bail me out. If there wasn't money in the bank , didn't spend.

You'll get through it. Just have patience.