NACFB fraud body ready to take on first commercial broker case

The National Association of Commercial Finance Brokers says it already has one commercial broker lined up to face its newly formed fraud committee.

It says there have been several complaints to the association about one commercial broker in particular and wants to take action.

Overall, the number of complaints it is receiving about brokers has been relatively small. But it says the same names causing problems keep cropping up.

It is receiving reports of some brokers potentially purporting to be lenders or charging large, upfront fees without intending to help fund a proposal.

Adam Tyler, chief executive of the NACFB, says the aim of the fraud body will be to investigate reports of bogus activity in the commercial industry and discuss how to stop illegal practices.

This will include working with the police, the Office of Fair Trading and government bodies so that the reputation of the commercial financial industry is not damaged by the actions of a few.

He says: “I have received a number of calls in the last few months from consumers who feel they have been ripped off by individuals and companies representing our industry. This is a throwback to the late 1980s and early 1990s and is threatening the reputation of all commercial finance brokers.

“I am concerned that a small number of instances will undo all the hard work of the last two decades and could bring about regulation. The amounts involved in upfront fees can reach thousands of pounds.”

The committee will investigate complaints about members and non-members.

Tyler says: “Difficult economic conditions have led some firms to demand large amounts of money for no guarantee of any service from clients who are vulnerable because they are desperate for some kind of financial assistance.”

Ann Marie O’Neill, sales director at broker Commercial Mortgage Desk, says the committee is a good idea but it will need to show it has teeth.

She says: “I have heard about a few brokers charging as much as 4% upfront fees and then not completing on cases. Times are hard at the moment, which is why brokers are charging these fees, but they have to get the balance right and fees need to be fair.

“The committee is a fantastic idea but it will need teeth and there will need to be consequences for those who break the rules.”