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Fight claims firms that are using sourcing data

Mortgage brokers are being urged to challenge claims firms that allege mortgage mis-selling by using sourcing data from the date when the mortgage was sold.

Mortgage Strategy understands that data companies are selling information to claims firms that shows what products were on the market at the time the deal was done.

Claims firms are then alleging the broker mis-sold the mortgage if the customer was not recom­mended the deal that was the cheapest or the one that would have appeared at the top of the sourced data. But much of the data is believed to be inaccurate.

Mortgage Brain says it would never sell its data. It has been approached by a number of brokers and networks for advice on how to dispute the claims. As a result it has reconstituted its systems to show the products that were available at the time to help brokers.

Mark Lofthouse, chief executive officer of Mortgage Brain says: “At the time of the mortgage deal, a Key Facts Illustration would have been produced, along with a copy of the filters used and available products.

“These were stor­ed in our archive and can be accessed by brokers free of charge.”

Robert Sinclair, director of the Association of Mortgage Intermediaries, does not believe this latest tactic will prove successful for claims firms.

He says: “There are many reasons why a broker does not recommend the first product on the list. Sometimes the cheapest product can have a lot of fees or LTVs that are unsuitable for the borrower. Most of these cases will be defensible to the Financial Ombudsman Service.”

He adds that if someone feels they were genuinely mis-sold a mortgage, they are not going to prove it by using sourcing data but by showing how it did not meet their needs.

Sinclair urges brokers to contact the client directly if a claim is made against them after reports that firms are making claims without obtaining permission from the client or receiving written consent.

He says: “This is fraud and if the claims firm is receiving the compensation on behalf of the client, who is to say they are passing it on?

“If you look at what the Ministry of Justice is saying these firms should be doing, verbal consent may not be enough.”

The latest complaint figures from FOS last week show there was a 35% increase in mortgage complaints last year. It received 9,537 complaints relating to mortgages in the year ending March 31 2012, compared with 7,067 in the previous 12 months.

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  • Richard Scott 29th May 2012 at 9:33 am

    Suitability letters can be key to the reasons why top of the list was not recommended. In my letters (under guidance from my compliance regime)duty bound to stipulate the reasons why other products higher in the list not chosen.
    Also as an AR you can be restricted to a “whole of market” representative panel therefore you can only recommend from what your panel offers. No doubt some of these chancers will list all direct deals which in an AR situation you cannot recommend as you do not what they are.

  • James 28th May 2012 at 3:47 pm

    The cheapest company at the top of sourcing lists might not provide mortgages in your specific area. They might not have taken certain income such as bonuses into account, or used the full figure when someone is on maternity pay. There are many times when cases have had to be discussed with different providers before someone would be willing to accept an application. The FOS has got to get a grip of this or there will be no one left who are willing to offer any advice in this industry because of the fraudulent claims that are being processed by these claims companies who have no one’s interests apart from their own.

  • Liz 28th May 2012 at 12:07 pm

    I agree Bill at 10:00 am

    This all does nothing for client confidence.

    Shut those claim firms down! Until they can learn to act responsibly and know what they are talking about they should not exist.

    Have had yet another recorded message call regarding PPI, that is 3 this morning alone. Surely this harrassment should be illegal!

  • Mary Lockyer 28th May 2012 at 10:44 am

    Shows how important the recording of “soft facts” are on a fact find,just as important would have been the market expectations of interest rate movements, and the clients ability to withstand the risks according to their circumstances and attitude to risk. Everyone would now retrospectively have a base rate tracker if they were choosing 4 years ago, these “claims” firms are probably the ones getting out of the PPI mis selling as this is running out of steam, where will they go next, interest only is my bet.

  • Liz 28th May 2012 at 10:17 am

    Going to keep it short as my comments havent submitted so far.

    Disgusting if those who sold us leads are now selling them so we can be complained against that is so immorral.

    Had 2 calls from complaints companies (one your charges… one your PPI….) asking me to claim whilst typing the version of this which didn’t submit. Grrrr

    These complaint firms need regulating. They should also be made to pay for the broker’s time when a complaint is not upheld, and if a complaint goes to FOS and is not upheld (eg: in those numerous cases where they complain about PPI when it isn’t PPI it is life cover for example) should also have to repay the costs incurred by the broker as a result of FOS looking at it.

    Is is disgusting that these complain firms are unregulated, they damage broker’s indivudual records of complaints made by these willy-nilly-flase and vindictive complaints. This also takes people’s time up who could be looking at genuine problems.

    I could ranble on for ages, I fell so incredibly angry that these firms can carry on the way they do with no staff knowlege or training.

    If they were regulated some how, and if their staff were educated/qualified then they would know that unless the client’s priority is lowest payment available then it would be incredibly rare for the mortgage at the top of the sourcing list to be recommended, and even if that was the client’s only priority they might not even fit that lender’s criteria. Seriously how long can these firms be allowed to trade? Am truly disgusted with it all.

  • Bill Wells 28th May 2012 at 10:00 am

    The Ministry of (in)Justice are a bunch of morons that should have closed down all the claims firms and stopped solicitors touting for business years ago. Instead, the MOJ stand idly by while these companies damage reputations and the financial well-being of firms dispatching good advice and good service to clients who would otherwise have been mis-sold by the rotten banks.

    And what is the FSA doing about all those claims firms who relentlessly cold call depite knowing that the people they are calling have indicated that they don’t want to be contacted ? – NOTHING !