Is my mortgage broker dodgy?

twinkle_star_7

Hi all,
I have a mortgage broker who has just arranged my mortgage for me. He hasnt charged me a fee (obviously he gets his commision from the lender).
He then got me a quote for life and critical illness cover, I thought that the premium was too high so I told him not to go ahead with it. I then searched on the internet myself and through an insurance broker managed to get the same cover with another company at a cheaper rate, which I have gone ahead and arranged.
I then received documents through the post from the insurance company that the mortgage broker had arranged (the one id told him to cancel). With that I rang the insurance company myself, they told me that the mortgage broker hadnt contacted them to cancel it. I appologised and told them to cancel it explaining that I had actually taken out cover elsewhere.
The mortgage broker came round on friday,and hes not very happy that I have gone elsewhere and arranged cover through an insurance broker instead of him. He also wasnt happy that I rang up the company he had arranged and cancelled the policy.
He told me straight - that he wont get his commision now. He told me that if I stick with this policy thats arranged he's going to charge me a fee for sorting out my mortgage (which was supposed to be free) he is annoyed that the insurance broker who I contacted will be getting his commision.
He now wants me to cancel the policy then restart it via him so he can have his commision.
Is this right? Should I cancel the policy?

talksalot81

It sounds like he has gone ahead and done things to best suit him and ignored the instruction you gave. If the subsequent events led to him losing his commission, that is his problem and his fault for not doing what you wanted. If he sticks with his current stance I would tell him to get lost entirely.

dwsjarcmcd

The idea of using a broker is to get the best and most suitable deal. He will get a fee for arranging your mortgage but for the life cover he is on dodgy ground. Personally I would have thrown him out if he'd tried to intimidate me with these type of tactics.

Why should you pay an extra monthly premium just so he can earn from it. It is one thing earning commission when you also benefit because of his work in 'brokering' a lower monthly premium but what he is suggesting is outragous. As to whether he can charge a fee, he should have provided you with a terms of business letter which will describe the service and fees.

I would ask him what his companys complaints procedure is, if he persists

Rick62

He should have given you (when you first met) an 'IDD'. (Initial Disclosure Document, ie terms of business). If he did then what does this say about fees? If he didn't he is in breach of his FSA authorisation.

For future, and for anyone else, if you use a broker for your mortgage and are basically happy with him, then if you get a better quote for insurance you could always go back to your first broker and give him the chance to match it. In this case however I would certainly not deal with this guy again, his conduct is totally unprofessional and would be grounds for a complaint if you wanted.

plane_boy2000

Make an official complaint about him. How many other customers have been made to take overpriced products to keep him in commission????? I would also take a long look at the mortgage he has aranged for you and make sure it was the best deal for you and not the one that he got paid the most commission for. He is required to tell you how much commission he gets for anything he aranged so you should see how much he made on the mortgage. Weigh this up against how many hours of his time you have used and you will see he has probably already made a reasonable return from you.

I dealt with a broker who did the same to me in a round about way. Because I wouldnt take his insurance he refused to return any of my calls and I ended up dealing direct with the lender. He then got nervous afterwards as I had not signed anything to say that I didnt want insurance etc

watcherman

I am surprised the broker did this to you. In the bad old days this sort of thing went on, but as Rick says, everything should be disclosed up front nowadays, so there can be no surprises later on.

dunstonh

He told me that if I stick with this policy thats arranged he's going to charge me a fee for sorting out my mortgage (which was supposed to be free) he is annoyed that the insurance broker who I contacted will be getting his commision.

Luckily, there are not too many left of this type. He cannot do this unless you have signed a fee agreement to allow it. This almost certainly does not exist.

The IDD mentioned higher up is the key here as it discloses method of remuneration.

Almost certainly the adviser is breaking the FSA's TCF rules here as well as breaking the rules relating to disclosure on the IDDs. He wouldnt have a leg to stand on if you were to make a complaint.

Every industry has it's bad apples and you picked one. Dont give him the satisfaction. Tell us what his IDD says in the charges section of the IDD and confirm if you have or have not signed a fee agreement. We will then tell you how to respond to this idiot.

MortgageMamma

The broker sounds like an absolute bully. What a nasty piece of work - as DunstonH rightly says, let us know if he gave you an IDD (key facts about our services) document, a terms of business document and a fee agreement to sign. We can then tell you what to do about it. Don't let you put this off brokers in general, most of us have high morals and truly act in the best interests of our clients.

twinkle_star_7

thanks for all your help with this one, to start off with I didnt sign a fee agreement. Secondly he did give me something called "understanding the mortgage terms" in this it says that his company may charge a fee of up to 1% of purchase price but that it would be discussed with the adviser (which he said was free) and contained in the key facts illustration.
Ive looked at the key facts illustration where in each section different boxes have been ticked. The No fee box has been ticked regarding the insurance, but in the mortgage bit NONE of the 3 boxes have been ticked. I dont know wether this is a good thing or a bad thing.

ddavis

Mine was the same...

He also signed me up for Payment Protection insisting that it was a term of my mortgage. I asked Abbey (my mortgage company) who said they couldn't comment on my individual case but they knew of no occasion where they have ever enforced PPI.

He tried to sign me up for life / critical too but was told promptly and in no uncertain terms what to stick and where to stick it. After that little chat he was as good as gold.

Until my PPI came in the post... Abbey sorted it though and I wasn't charged a penny.

MortgageMamma

If none of the boxes are ticked that is an uncompliant IDD document and the FSA would be interested to know about it. I suggest you mention this to the broker, tell him you've checked on the fsa website and you realise its not compliant, and that you will report it to the FSA, as well as his bully tactics.