More than eight out of 10 brokers have condemned the service standards provided by the “free” legal firms offered by lenders.
The survey, by the Association of Mortgage Intermediaries, said 82 per cent of brokers found service standards worse than those provided by solicitors and conveyancers who had been appointed by the customer.
More than half (52 per cent) of brokers described these standards as “significantly worse.”
Seven out of 10 brokers (71 per cent) said they had experienced delays with these free legal services.
Respondents complained about difficulties getting through on the phone, paperwork being lost, completion dates being missed and the problem of not having one legal adviser overseeing a case.
The AMI has now called for lenders to “reconsider free legal offerings”. It says it will be contacting their lender trade body to raise issues of conflict of interest and poor service standards.
One respondent to the survey said: “Lenders are aware that the service is abysmal but they still continue using these firms and this is reprehensible.”
As a result, many brokers are reluctant to recommend these services. A total of 73 per cent would only recommend free legals on a remortgage, with just 19 per cent recommending these services for both purchases and remortgages.
Almost one in 10 brokers (8 per cent) do not recommend these services at all.
Most brokers (57 per cent) said they would prefer lenders to offer cashback options instead.
In total three quarters of brokers said they did not think that lenders, or builders, should offer these services as there was a too great a conflict of interest.
AMI chief executive Robert Sinclair says: “This survey raises a number of questions on the effectiveness of these free legal services that are offered to many consumers.
“It is clear that the significant majority of brokers would prefer a cashback option where lenders feel that they wish to incentivise aspects of their products.”