Refund on mortgage broker fee

samatron

I had recently been researching my (re)mortgage situation on a flat I own, and through my enquiries, got a call from a mortgage broker.
After going through some illustrations, the broker put me onto a good rate on a buy-to-let mortgage (I don't live in the flat and have tenants in it).
It seemed like a good deal, so I went ahead and paid the fee after having had two telephone calls with the agent.
However, after looking further into my financial situation having met and talked with other financial advisers, I realised that this mortgage would tie up my funds and make it harder to buy a flat in London, which is my ultimate aim.
I contacted the broker to stop the deal, and didn't sign and return the paperwork. The broker seemed very reluctant for me to do this.
The email I received after paying the fee mentions the fee being non-refundable, and looking on the company website, it turns out that because it's a buy-to-let mortgage, they aren't regulated by the FSA and they claim I can't use a financial ombudsman.
As far as getting my £500 fee back, am I screwed?

holly_hobby

Non-refundable fees, have nothing to do with non-regulated lending, which BTL business is - this is a term that the adviser has re up front fees.

You have engaged the broker, paid an upfront fee, but now for personal reasons have elected not to proceed with the mortgage.

If he's done no work at all, then he may be sympathetic, although the terms are the terms regardless, which you did agreed to in paying the fee in the first place.

Try the sympathy route ... as legally there is no basis to force a refund - if so how about asking them that if you decide to pch inthe future and use them, will they in that instance utilise the fee they are retaining ?

Sorry, I know this will be disappointing.

Hope this helps

Holly

Let_Us_See

holly_hobby wrote: »

Sorry, I know this will be disappointing.

Why on earth is this disappointing? They neither deserve nor should expect their broker fee returned. They agreed to receive professional advice in return for paying a fee, and I am simply stunned they believed they had a valid complaint.

ACG

I think a lot depends how far down the line you are.
I charge my fee on application, if i have submitted an application i would be reluctant to refund it as i still have the same work to do pretty much.

If i havnt submitted it, then i would ensure my costs are covered and refund the remainder.

However, either way to the OP this is your mistake. You shouldnt have agreed to what the broker was recommending if it did not fit with your requirements, you should have told them. The fact you agreed meant they then went and did more work.

If i (as a broker) make a mistake, i have to live with it and foot the bill for it. You as the client made the mistake here by telling the broker to proceed so you have to foot the bill. As holly says you might be able to get some back if they havnt done too much work on it, but i wouldnt expect the full £500 back.

FSA regulated or not, its your mistake.

samatron

I'm not trying to stun or shock anyone here and will be the first to admit I made a mistake.
I guess I felt that when you buy a product and realise that it's not what you want, it's not completely unusual to be able to get your money back.

holly_hobby

samatron wrote: »

I guess I felt that when you buy a product and realise that it's not what you want, it's not completely unusual to be able to get your money back.

Even shops don't have to refund on the basis of you've simply changed your mind ...

Lesson learned (the hard way) perhaps ...

Anyhoo, have a chat with the adviser, see what you can mediate with him, but don't go at it like a bull in a china shop as you'll certainly get no where.

Hope this helps

H x

holly_hobby

Let_Us_See wrote: »

Why on earth is this disappointing? They neither deserve nor should expect their broker fee returned. They agreed to receive professional advice in return for paying a fee, and I am simply stunned they believed they had a valid complaint.

I was trying to be nice :A in delivering the bad news !

H

Senior_Paper_Monitor

When the product is the individual's time it has been used up !

Just like a chocolate bar - you buy it - you consume it - it doesn't exist any more and you haven't got much chance of refund if you say you didn't like it afterwards.

I am assuming that it was payable on application - in which case if the application was made (most of the broker's work is done at that point) and the chocolate has been eaten.

If it was on application but no application has been made (and I suspect that may be the case if you didn't 'sign and return the paperwork' but that depends on what paperwork) then it may be a different case.

samatron

Well, thanks HH and SPM for those viewpoints.
HH: You're definitely right in that I should consider mediating, as I'm in the wrong here. And I shouldn't have any expectations of recompense.
SPM: I appreciate your clear points. It helps me to know from a neutral and knowledgeable person's perspective that I have no leg to stand on.

magpiecottage

I'm afraid a B2L is a commercial, rather than a retail, transaction. Therefore consumer law does not apply.

You are generally considered to have researched your reasons beforehand.

Even if it had been regulated, the broker could have defended a complaint if it was simply that you had changed your mind after they had recommended a product which, on the basis of what you told him at the time, was suitable.

amnblog

samatron wrote: »

I guess I felt that when you buy a product and realise that it's not what you want, it's not completely unusual to be able to get your money back.

You did not buy a product. You bought a service which is the advisers time, which you have taken and cannot be returned.

Therefore (unless the advisers terms say otherwise) a refund would not be appropriate to either request or provide.