A Newcastle-based brokerage was in the spotlight last week over claims it was misleading Right to Buy borrowers and flouting the Consumer Credit Act.
Using hidden cameras, the BBC's Watchdog filmed advisers at Nationwide Mortgage Services stating that getting a mortgage was a complicated practice and making clients sign contracts allegedly legally binding them to a flat fee agreement of £1,995, seemingly irrespective of the size of the mortgage.
One couple featured in the show decided not to get a mortgage from NMS which still demanded they pay the £1,995 fee despite cancelling the deal. Under the Consumer Credit Act the maximum a broker can charge if a client does not go ahead with the mortgage is £5.
Customers were also surprised to find they had taken out a home improvement loan that tied them to builders associated with the company. It is claimed builders were charging customers above average prices for sub-standard work.
Ray Boulger, senior technical manager at Charcol, featured on the programme. He says: “The whole thing seems to be set up to prey on people who are vulnerable.”
In a prepared statement NMS says: “It is not company policy to charge if a matter does not proceed to completion and we regret it if a mistake has been made in this case.
“We are surprised and concerned by the allegations. All our operatives are highly trained and we pride ourselves on the service we offer and the manner in which the company deals with its customers.”