Confusion over broker fee waiver

Lynx88

My partner and I have very recently purchased a house WE arranged the mortgage through a broker, who told us his fee was £200 for arranging it. He helpfully asked if we would like him to look for life insurance aand we said yes, please get quotes. He found quotes through legal and general and began setup, however later we found a better deal with a viva so we cancelled. Now we arebbeing chased for nearly £900 as we signed a fee waiver, provided that we hold the l&g policy for 48 months. This was never brought to our attentio! NNeither of us were aware that we were tied into this policy in this way AAlthough yes we did sign this waiver document it was not verbally explained, and the broker had already told us that his fee was £200. They say we can reinstate the policy and there will be no penalty, but now I am worried that the same thing might happen when I cancel the aviva policy as I arranged it on the phone through easylife, so will they do the same thing?? I did not sign anything with regards to that policy.

Is this a common complaint? Our understanding was that we were paying the broker to set up the mortgage, that he would just look for quotes for life insurance but that it was not an obligation and his fee was not dependent on anything else. Am I right in thinking that this should have been verbally explained and clarified as it is a financial product?

ACG

If you did not sign a fee agreement with the aviva policy then chances are you will not have to cover the commission clawback - but check wth them.

For the original policy, the fee waiver you signed what does it say? Does it say if you cancel the insurance policy you will have to pay any commission clawed back? If so, did the L&G policy actually go on risk?

If it did and it was stated in the fee waiver form then I think you need to take this as a lesson - read what you sign. This isnt a practice I take up personally, I think people should be free to swap and change as they please, but some brokers do do this.

It does not have to be verbally disclosed, you should have read your contract. I see your point completely, but you need to take some responsibility for this yourself I think.

If it is not in the contract you signed, then tell him to do one.

Lynx88

ACG wrote: »

If so, did the L&G policy actually go on risk?

Can you clarify what you mean by this please?

Funny_old_game

Go live, happen, be in place, policy started etc

Lynx88

Well they sent me the health information to read through and check, and I was to send confirmation that the details were correct. I didn't respond as we were looking eelsewhere at that point. I then received direct debit confirmation and confirmation of the policy setup along with a form to sign to canceliif not needed. We signed these and sent them off thus giving notice of cancellation. Since I didn't respond to the first letter regarding the details I didn't expect them to go ahead and set it up anyway. In fact that letter states that the quote was valid until end of July so I thought if I left it it would not progress further, as is usual when shopping around for quotes!

ACG

What was the conversation surrounding the set up policy with the broker?

When he came back with some quotes and you said thats fine did he say something like I will put this on risk when your mortgage starts and you agreed?
You then did not tell him that you had found the same policy cheaper so did not want the policy?