Take extra care when using brokers at moment

FraudBuster

An interesting thread.

toonfish

jediknightwarrior wrote: »

This is a weird one!

I have spoken to the FOS day and I was told there is no consumer protection if you apply directly to a lender as a result of advice received by a broker and the advice turns out to be incorrect.

They said that in order to be protected the broker had to place the case with the lender.

This can't be right surely???

You are dealing direct with the lender, so they are responsible for the compliance side of things, not the broker.

HelpWhereIcan

rzr101 wrote: »

Not at all - I think you are just being over the top - look at the situation - a lady on the brink of retiring who is cuts hair for a living. Hardly the big time is it. God forbid any self-employed clients coming to you asking for a self-cert (black cab driver prime example).

Wow, how long is it since you last did any Money Laundering training? I remember my first course back in the 90s explaining that criminals often use cash reliant businesses and individuals that are struggling/vulnerable to introduce money to the system.

Therefore anyone who approaches you to transact a piece of business where their income/lifestyle does not match that transaction - especially where encashment is expected in a short period or is the customer's major concern (especially over cost) - should be considered as one that is potentially suspicious.

Last year I reported a case to our MLO of a guy who was buying a largish for here (over £1m) BTL portfolio substantially below market value from someone in the US. He had no cash to put in, was earning £20k as a self employed chef and had no savings or other investments (property or otherwise). He also mentioned that he planned to sell most of the portfolio on again within 12 months.

Was advised to proceed with the transaction and AFAIK nothing has come of it as the police, revenue etc will have looked at it and decided nothing wrong. I at least did my bit and reported my suspicions. I have no risk, the customer who has nothing to hide has no risk and I do my job by helping to prevent criminal money entering the system and funding crime/terrorism.

Or do you honestly believe that it has only been individuals that have benefited from mortgage fraud - there has been no large scale fraud perpetrated by criminals in your eyes?

Vincenzo wrote: »

Besides this is all anyone really needs.....

http://www.fsa.gov.uk/tables/bespoke/Mortgages

To me, the best one is http://www.moneyfacts.co.uk/searches/mortgage.aspx. I use the adviser version and yesterday advised a customer to go direct to HSBC on the back of the research done on it (not for a rate matcher deal BTW).

jediknightwarrior wrote: »

This is a weird one!

I have spoken to the FOS day and I was told there is no consumer protection if you apply directly to a lender as a result of advice received by a broker and the advice turns out to be incorrect.

They said that in order to be protected the broker had to place the case with the lender.

This can't be right surely???

I presume that you would agree that it would only be 'right' if the broker had charged you a fee for the advice and the broker had provided all the usual paperwork such as KFIs, Reasons Why Letter etc after having completed a full factfind. In cases where advisers have reccomended that the client go direct and not charged a fee, there will only be a bare minimum factfind/discussion file kept - at best. Some will bin the whole file if they have no other relationship with the customer.

Can you imaging the number of vexatious claims that could arise if the FOS allowed complaints where the adviser had not placed the case? All someone would have to say is "he advised me to do it" and the FOS would have to hear the case whether the broker was actually involved or not - what a cash cow that would be.

No paperwork for the claims companies to find fault with - just the say so of the customer.

In reality I suspect that the FOS may look at a case where the broker had provided the paperwork (Factfind, KFI and RWL) and charged a fee - at least there is a paper trail.

UK007BullDog

jediknightwarrior wrote: »

This is a weird one!

I have spoken to the FOS day and I was told there is no consumer protection if you apply directly to a lender as a result of advice received by a broker and the advice turns out to be incorrect.

They said that in order to be protected the broker had to place the case with the lender.

This can't be right surely???

That is correct. If you go direct you do not have the same protection and cannot claim compensation if later on the mortgage turns out to be the worst product you could have chosen.

the only way to be protected is if the broker places the mortgage with the lender. If you go and do it then its tough luck.

The whole FSA stuff is just one big laugh!

The lenders do not fact find as thorough as a broker. They really dont, hence they should be more accountable in their selling. I know been there and worn the T-shirt. :rolleyes:

owitemisermusa

jediknightwarrior wrote: »

.......
Will they recommend HSBC if you ring them for advice???......

Yes they did.

dunstonh

Its stupid because if an IFA recommends a transaction that requires the consumer to go direct then the consumer does get the FOS protection.

However, there is a difference between saying "I cant do it but I think they can, so try them" and a factfind and suitabilty report saying the same.

jediknightwarrior

dunstonh wrote: »

Its stupid because if an IFA recommends a transaction that requires the consumer to go direct then the consumer does get the FOS protection.

However, there is a difference between saying "I cant do it but I think they can, so try them" and a factfind and suitabilty report saying the same.

Maybe they misunderstood, I'll try them again next week, as I mean the latter. ie. fee based advice recommending a direct only product.

Dan_Collins_2

I think I posted this info on another thread so well done to give it its own thread.

Brokers are actually being shafted by the major lenders, although I have been told by all lenders doing this that it is a tempory thing. Most lenders have better direct deals, and a broker cannot access them full stop. You can even charge a fee and act for your client, bit of a joke but they have reasons.

Conrad what you are doing is actually against FSA rules and law. You must have heard of the whistle blowing policy! I am not saying you should or should not be doing the case, but you should not be shouting out about it, your asking for trouble.

Dan_Collins_2

ALso TCF means we have to send the client direct!

minimike2

Dan_Collins wrote: »

I think I posted this info on another thread so well done to give it its own thread.

Lenders are actually being shafted by the major lenders, although I have been told by all lenders doing this that it is a tempory thing. Most lenders have better direct deals, and a broker cannot access them full stop. You can even charge a fee and act for your client, bit of a joke but they have reasons.

Conrad what you are doing is actually against FSA rules and law. You must have heard of the whistle blowing policy! I am not saying you should or should not be doing the case, but you should not be shouting out about it, your asking for trouble.

Yeah I was gunna say its strange to be broadcasting about it publicly.

Im glad I am not the only person here with the opinion I have - I was strating to get worried!