Paymentshield has been threatened with legal action over its decision to stop paying renewal commission to brokers who are no longer regulated to sell general insurance.Sue Lambert-Hope, a retired mortgages adviser, says she will be contacting other brokers who have also had their renewal commission payments stopped with a view to taking legal action against Paymentshield for damages and monies withheld.She says: “How can a company built on integrity lose it so quickly? How can it decide that it will no longer pay commission on business that I brought it, on which it is still making a profit?”She adds that she knew there was a possibility that clients she advised would switch policies in a few years but she expected to be paid commission until that time.The FSA has told Mortgage Strategy that there is nothing in its rulebook that says a firm can or cannot pay a person renewal commission once they have retired from the industry.A spokesman for the FSA says: “Commission is not a regulatory issue. There is no rule about whether a firm should or should not pay this.”But Chris Traynor, sales and marketing director at Paymentshield, has hit back at the criticism about its decision to stop paying renewal commission.He says although the FSA does not have any rules concerning the payment of commission fees to a person once they have retired Paymentshield was right to cancel the payments.He adds: “It affects us because when a client wants advice on payment protection insurance they cannot go back back to the broker because they are no longer regulated so they will have to come to Paymentshield.”However, the broker still wants to be paid the commission for that business.”In response to threatened legal action, Traynor says that before Paymentshield decided to stop the renewal commission it sought legal advice from a firm that said it was within its rights to cancel it.
- Top trends
The new remortgaging service developed specifically for packagers by LMS is proving to be a success, with more than 13 packagers already signed up.Packagers who have signed up to use the LMS system include AToM, Clear Mortgage Administration, Just Mortgage Packaging, KGB Packaging, Mortgage 1, Mortgage 2000, Mortgage Bureau (UK), Mortgage Next, Niche Mortgage Solutions, […]
Abbeys move to retain its share of the mortgage market by increasing homeowners borrowing power must be kept in perspective, according to broker My Mortgage Direct.Paul Hearnden, managing director of My Mortgage Direct, says: The current climate of must-have-it-now has led even the most clued-up borrowers into believing that this kind of offer from a […]
The Mortgage Partnership has launched free valuations in association withGMAC-RFC. The packager is now providing brokers with free valuations and instant offers on selected packaged products from the Partners range.
BM Solutions is launching Mortgage Plus, a product which connects a secured mortgage and an unsecured personal loan, from Monday November 13. The product is only available to prospective borrowers with an excellent credit history, through independent, regulated mortgage intermediaries.Nigel Stockton, managing director of BM Solutions, says: “This specialist product serves a niche part of […]
It’s not that long ago that short-term finance, or, perhaps more specifically, bridging finance were viewed as dirty words by mortgage brokers. The rates on offer were punishing, meaning there were only a handful of situations where it would be appropriate to arrange one. Some lenders didn’t exactly uphold great reputations for service standards either; […]
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