secret commission payment from lender

Fin53

I've had a letter from Clear Law Solicitors regarding a £5000 loan I took out in 1998, secured against the property I owned at that time. It even gives the exact date I took out the loan. Confused..you bet I am. Contacted them to find out what was going on & they're sending forms for me to fill in & send back, giving them permission to act on my behalf. I would like to get help with this, but not sure who to ask. Any help appreciated.

dunstonh

Fin53 wrote: »

I've had a letter from Clear Law Solicitors regarding a £5000 loan I took out in 1998, secured against the property I owned at that time. It even gives the exact date I took out the loan. Confused..you bet I am. Contacted them to find out what was going on & they're sending forms for me to fill in & send back, giving them permission to act on my behalf. I would like to get help with this, but not sure who to ask. Any help appreciated.

Secured lending information is in the public domain. It is possible to buy lists of this data.

However, a couple of things to note on this....

1 - Secured lending in the mainstream has low commissions. typically 0.x%. So, £5000 at say 0.5% is £25 commission. If subprime (high risk borrowing) then it may be upto 5%. which is £250.
2 - only if you paid a fee and a commission was payable does this work. If its one or the other, it does not work.
3 - It could well be timebarred as 1998 is more than 15 years ago.

Do not pay any up front fees. Be wary that you will probably get nothing back but if you do, it will likely be a small amount and could easily be less than the upfront fee, if there is one.

bladybabe

I have had a letter from Clear law also i took my loan out in 1997 so if its right what you are saying it is over 15years so why have they contacted me really dont know what to do

magpiecottage

Fin53 wrote: »

I've had a letter from Clear Law Solicitors regarding a £5000 loan I took out in 1998, secured against the property I owned at that time. It even gives the exact date I took out the loan. Confused..you bet I am.

Actually, this is fairly easy to find out if you are in England or Wales. The Land Registry record for your house is in the public domain. It tells anybody who cares to obtain the information who the proprietors (owners) are and who any current lender is.

However, the fact that you have a mortgage does not necessarily mean there was any wrongdoing in its sale.

You need to prove there was a broker, that the broker received a fee from you in respect of the mortgage itself, that they also received a fee or commission from the lender AND that you were not told about the payment they would get from the lender.

Quite a tall order.

If you manage it, you would get the commission refunded but that is all - apart from, perhaps 8% simple interest (which would be taxable).

The commission might have been £1,000 in 1997 and 18 years interest on that £1,200.

So the amount involved would seem unlikely to be worth involving a solicitor - the more so as it could be dealt with under the small claims route.

dunstonh

The broker would also need to still be trading.

Mortgages were not regulated until October 2004 and not under the consumer credict act. So, would that affect the reasons compared to say a secured loan which may have been under the consumer credit act or a personal loan?

magpiecottage

dunstonh wrote: »

The broker would also need to still be trading.

Under Hurstanger, the lender is also liable - and as deception is involved, the 15 year long stop would usually be disapplied.

However, you still have to prove that nobody told the borrower of the commission (i.e. that it was a secret) AND that the lender paid a fee to the broker (because if there was no commission, then there there cannot have been a secret commission).

Parttimelawyer

I actually looked into this a while ago following some stuff that I read. You might want to read an extract from a parliamentary debate in 2001 if you've not seen it.

I can't post a link but if you add a www. to the beginning of what follows, it will take you there.

publications.parliament.uk/pa/cm200102/cmhansrd/vo011016/halltext/11016h05.htm

It has some interesting stuff on a case called Rozak - 5 paragraphs down and following.

If that doesn't work, it's in the Hansard Debates for 16 October 2001, part 5 at 1.29 pm.

Blundeston

Hello,

My dad also recently received a letter from Clear Law Solicitors in relation to this same topic for loan from July 1998. It goes on about this secret broker fee etc. Their fees are ridiculous though on a no win, no fee basis.

I am wondering if I can just write a letter to the lender myself enquiring about this. I am a trainee solicitor and so would like to do this for my dad for free instead. I would be grateful if someone could please advise me as to what information I would need or let me know if they have done the same.

He does not hold any documentation anymore for me to read through the loan but surely this cannot be a problem if Clear Law have written to him anyhow saying they know about this secret commission that was paid?

Thanks,

B

magpiecottage

The case commonly referred to in relation to this is Hurstanger v Wilson.

However, you also need to consider Sealey and Winfield v (1) Loans.co.uk Ltd (2) GE Money Secured Loans Ltd

Blundeston

Unfortunately as my parents have no recollection of who the broker was or any documents to prove anything, I have written a letter on the off chance that we might get something back as a response before they go to Clear Law.

Please see below my explanatory paragraph and let me know if it makes sense or if I need to add anything. If someone could check that would be amazing!

"Further to Wilson v Hurstanger Ltd, it is my understanding that as there was a broker, who received a fee from my parents in respect of the loan itself and who additionally received a “secret commission” paid by the lender, the broker has breached his fiduciary duty. More significantly, as the lender who has paid the commission knowing that the broker was acting as the agent of my parents, you are also liable as an accessory to the breach.

This therefore means that my parents are entitled to claim equitable compensation directly from OCWEN/IGROUP. I understand that the usual method is for you to pay the amount of the commission plus interest from the date it was paid."

Thank you,

B