secret commission payment from lender

ItsAllSoLegal

Hi
I recieved letter from Clear Law yesterday
Please let me know how you get on....

magpiecottage

Blundeston wrote: »

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

There are three hurdles you need to get over:

1. You must show that it is more likely than not that a fee was paid to the broker by your parents.
2. You must show that a commission was paid by the lender to the broker.
3. You must show that existence of that commission was not disclosed to your parents at the time. Note that they did not have to disclose the amount of the commission, unless asked by your parents, simply that it existed.

The second hurdle can probably be found in the lender's records.


However, if no fee was paid by your parents then it is assumed that they realised that the broker was paid by the lender and there was no need to disclose it. That is why the first hurdle is there.


If you look here, Lord Nicholls of Birkenhead says "the general principle is that he who asserts a wrong has been committed must prove it."

You are making the assertion that a fee was paid (and thus any secret commission was a bribe) - but you say your parents hold no evidence to support that assertion.

You cannot go to the broker and obtain their records because they do not exist any more.

As any fee would be a private matter between the broker and your parents, it is unlikely that the lender has any evidence of it.

So you may get lucky but from what you have told us, this looks like one that could be easily batted out.

oldwarhorse

Hello to all,

Earlier this year, my young brother in law was contacted by a solicitor about a claim under this 'ROFRA' scheme, if it is a scheme ? Anyway......after a bit of 'to and fro' he has received an offer, after some "lengthy negotions" made by them, on his behalf, minus a 35% fee, too much imho. All he has to do is sign the agreement sent. My interests are personal as i hold a great deal of affection for him and i don't want to see him short changed, he was already ripped off by his father !!!

My question is......should he accept this first offer or hold out or not sign at all ? any advice would be greatly appreciated.

dunstonh

after a bit of 'to and fro' he has received an offer, after some "lengthy negotions" made by them, on his behalf, minus a 35% fee, too much imho.

If you employ a company to do work for you then you enter into a contract and that contract will agree the price. If that is what he agreed to then its too late to do anything about it.

My question is......should he accept this first offer or hold out or not sign at all ?

This is not normally something you haggle over. it is normally a refund of the commission plus interest.

Nearlyold

Who are the solicitors and have you checked them out as genuine? Who is making the offer to your brother in law via the solicitors and why, what dealings has your brother in law had with them such that they owe him some money?


Make sure that your brother in law won't end up like the poster in this thread
http://forums.moneysavingexpert.com/....php?t=5191137

oldwarhorse

Thank you dunstonh for the speedy reply. unfortunately i only found out about all of this yesterday ! 'Gate,bolt and horse' seem to apply in this case, shame.

oldwarhorse

i have read that post. have also checked out the solicitor, good name, would you believe ! The company making the offer of £12,000 is GE money. Minus, of course 35% solicitors fee. No legal action has been taken.

dunstonh

The company making the offer of £12,000 is GE money

That is more than the commission being refunded (by a significant margin). I wonder if the contract had flaws and they are having to refund the interest on the debt. "secret commission" only requires a refund of the commission. So, this looks like something else.

oldwarhorse

That is my line of thought.
In the most recent correspondence from the solicitor, a breakdown of the 'compensation offer is given as follows:
Repayment of contractual interest paid for the term of the loan
" " " interest from the date of redemption to the date of settlement
Tax payment to HMRC
Refund of original broker fee paid
" " " Secret Commission
A nominal contribution to legals costs

the whole thing just smells of something quite 'underhand' to me, and i feel that he is being steam rollered in to a deal which includes a privacy policy whereby he has no further recourse for compensation, should any other issues arise and a clause that amounts to a gagging order.

BJP13

I too have received a letter today from Clearlaw Solicitors stating that I may be able to make a potential claim against G E Money on the basis that the brokers recommending my mortgage were tied to one another. When I telephoned them they seemed to know everything about my case, and that my ex-husband was claiming his half. At the time it seems feasible and they have sent me some papers to sign, which I have not as yet, but now after doing some searching I see a lot of similar stories, so I am not so sure. They say they work on a "no win no fee basis" but I have read stories above of people being later charged. Does anyone have any advice, is this a scam?