secret commisions

[nicholasnicholas]

Hi, I have a loan which was taken out with Flexi Loans & Mortgages and i also requested PPI to be added to the loan. The PPI was provided through Swift.

 

I know that i cant claim back my PPI as i requested and wanted it. But i was not told what commison Flexi would get from Swift for arranging the Insurance.

 

Can i claim back that commision as i was not told about it.

Should i have had to sign something saying that i know the amount of the commision received or should i have at least received the amount in writing.

 

if i can does anybody have any letters i can send to Flexi to reclaim this.

 

Any help is much appriciated.

[andrew1]

This is a very interesting point. There has been case law about this secret commissions within loan arrangements for brokers.

 

I found on a loan I had that the broker received a fee, fair enough I knew about it, but then I found they received another fee from the loan company too which I didn't know about until I asked.

 

It is deemed unacceptable and reclaimable as the broker could not have been impartial in their recommendation of that particular product if they were receiving an additional incentive from the loan company.

 

I'll try and find it for you. There: bit of bed time reading for you URL: Watchtower Investments Ltd v Payne & Anor [2001] EWCA Civ 1159 (20 July 2001)

 

 

Sarah

Edited November 28, 2008 by andrew1
added link

[alanalana]

Andrew 1,

 

Thank you for popping in to PPI forum. This question would of course have meant I would have to start night classes with a view to becoming a member of the bar.

Now I am ok with bars but not one where a knowledgable Judge can make you quiver.

 

Yes I have been to Crown Court:eek:

 

Subbing for more information as and when

 

aa

[Paintball]

Andrew 1,

 

Thank you for popping in to PPI forum. This question would of course have meant I would have to start night classes with a view to becoming a member of the bar.

Now I am ok with bars but not one where a knowledgable Judge can make you quiver.

 

Yes I have been to Crown Court:eek:

 

Subbing for more information as and when

 

aa

 

:lol:

 

Oh aa, I nearly fell off my chair with this one ...

[nicholasnicholas]

Thank you Andrew1

I will have to have a good read and try and type a complaint letter.

Ill put the letter on here once ive done it for your approval.

Thanks

[andrew1]

I just love getting people to read lots but take a read over this Parliamentary debate regarding secret commissions. There is some sterling information here to be absorbed even to the point of sub-prime lenders who put a charge on properties but don't actually own the homes making them taking people to court when they have no right to...over a cuppa this one... House of Commons Hansard Debates for 16 Oct 2001 (pt 5)

[pt2537]

an undisclosed commission which is totally secret, that is to say NEVER EVER disclosed, or even suggested that a commission may be paid to a broker , is dynamite

 

 

Obviously if there has been no disclosure the agent will have received a secret commission. This is a blatant breach of his fiduciary duty but additionally the payment or receipt of a secret commission is considered to be a form of bribe and is treated in the authorities as a special category of fraud in which it is unnecessary to prove motive, inducement or loss up to the amount of the bribe. The principal has alternative remedies against both the briber and the agent for money had and received where he can recover the amount of the bribe or for damages for fraud where he can recover the amount of any actual loss sustained by entering into the transaction in respect of which the bribe was given. (Mahesan v Malaya's Housing Society [1979] AC374, 383). Furthermore the transaction is voidable at the election of the principal who can rescind it provided counter-restitution can be made. (Panama & South Pacific Telegraph Co. v India Rubber, Gutta Percha, and Telegraph Co. [1875] 9 Ch App 515, 527, 532-3).

 

the above quote is taken from Wilson & Anor v Hurstanger Ltd [2007] EWCA Civ 299 (04 April 2007)

[militantconsumer]

In what circumstances would secret commissions be inappropriate and illegal?

 

Are we just talking about "independent" brokers offering advice, surely not loan companies who are offering PPI policies???

[andrew1]

In what circumstances would secret commissions be inappropriate and illegal?

 

Are we just talking about "independent" brokers offering advice, surely not loan companies who are offering PPI policies???

 

 

Financial advice has to be seen as being independent. If a broker is paid a fee for introducing business he/she will be paid by the borrower, often via the loan itself and that is why it is shown on the loan agreement documents. By the borrower paying the broker one is assured that their advice is in no way influenced by any particular finance company and the advice is only in the borrowers best interests not the brokers.

 

Now introduce a 'secret commission' being offered by the finance company to a broker for introducing more business to them rather than anyone else. If a broker receives a fee from the finance company and it is NOT mentioned or disclosed to the borrower in a totally open manner then it could be deemed that the broker is a 'tied agent' or is not acting in the best interests of the borrower but his own. That then becomes an offence.

 

You have pointed out PPI, I suppose that could also be deemed the same although to be honest I hadn't even thought about that angle, but yes, I guess one could see a finance company providing PPI from a chosen source as being a tied broker for that insurance company if they didn't offer you a choice. Come to think of it, when I took a £13k loan once and was charged £6000 insurance which they added to the loan, not only was I angry about the price, I certainly had no choice to select from and I am sure the bank took a nice little earner from the introduction fee..mmmm?

[pinknico]

I have a loan with Picture Financial with PPI, they only offered 1 policy for the PPI and no mention of commission but I am sure there must have been. Waiting on a SAR to find out.

[militantconsumer]

I don't see how it can apply to PPI on loans or credit cards.

 

Suppose I take out a loan with Bank X and they add in a PPI policy supplied by Insurance Company Y. The PPI policy costs me a cash price of £1,000, but X only bought it from Company Y for £800.

 

The £200 is X's profit and motivation for the sale, and doesn't have to be disclosed, right?

 

Now, imagine another insurance company Z came along and tried to persuade X to sell the Z products instead of the Y ones, offering to sell them to X for only £750, increasing X's profits to £250 per policy sold.

 

Obviously Y would be unhappy about this. So, as they have a big margin in their products anyway, and X is their biggest customer, they agree to drop their price to £700 per policy, so that X now makes £300 per policy sold to the final consumer.

 

Ok, so this is why I don't think your arguments can apply to loan companies selling PPI: how is Y cutting the price that they ask X to pay them by £100 (from £300 to £200) any different from simply offering X a "bribe" or "secret commission" of £100 per policy sold?

 

And, perhaps in the real world it is more likely that, as X is their favourite customer, Y are offering, not £100 per policy in secret commissions, but some kind of "rebate" or general muddy goodwill preferential payment somewhere in the depths of their corporate structure.

 

I think the key is that the loan company will try and claim that they are 'not providing an advisory service' when they sell PPI. This is certainly what Egg Card are telling us about their Card Repayment Protection policy purchased online. This is, they want you to believe, a very different situation from a broker who claims to be advising you in your best interests but is secretly just taking the biggest kickbacks.

 

Perhaps a new angle on PPI mis-selling claims would be to see if the finance company are correctly following the regulations for selling financial products without offering an advisory service - or indeed if this is an acceptabe thing to be doing at all.

[andrew1]

I think this may have more to do with one not being given a choice of having or not having PPI with Loan companies. Commissions to brokers are a different kettle of fish than what you have just described I agree, but I don't think finance companies actually 'buy' the insurance, mine for example was openly sold through London & Edinbrugh not the Bank who provided the loan although it was included in the loan agreement. Needs some further thought... nice analysis though MC

[alanalana]

Hello all,

 

You have pointed out PPI, I suppose that could also be deemed the same although to be honest I hadn't even thought about that angle, but yes, I guess one could see a finance company providing PPI from a chosen source as being a tied broker for that insurance company if they didn't offer you a choice. Come to think of it, when I took a £13k loan once and was charged £6000 insurance which they added to the loan, not only was I angry about the price, I certainly had no choice to select from and I am sure the bank took a nice little earner from the introduction fee..mmmm?

 

This news comes a little late for me as RBS have offered goodwill settlements and they organised the PPI with their own insurers so the score now becomes Alanalana 2 RBS 1 we will soon put paid to that:D

 

Have a good great New Year

aa

[andrew1]

Hello all,

 

 

 

This news comes a little late for me as RBS have offered goodwill settlements and they organised the PPI with their own insurers so the score now becomes Alanalana 2 RBS 1 we will soon put paid to that:D

 

Have a good great New Year

aa

 

I got a funny feeling this years gonna be a corker...

[hellhasnofury]

Hello Everyone,

 

I am extremely interested in this topic secret commissions. At present I am helping someone with a ppi claim against Land of Leather and the finance company who gave them the loan. And of course they are in total denial and both issued a final responce after the first letter.

 

I have requested to know the commission paid for the sale of ppi and warrenty insurances and they have both failed to answer that question.

 

Will start a new thread regarding this complaint to see what unfolds:-D

[pt2537]

Hello Everyone,

 

I am extremely interested in this topic secret commissions. At present I am helping someone with a ppi claim against Land of Leather and the finance company who gave them the loan. And of course they are in total denial and both issued a final responce after the first letter.

 

I have requested to know the commission paid for the sale of ppi and warrenty insurances and they have both failed to answer that question.

 

Will start a new thread regarding this complaint to see what unfolds:-D

Hey HHNF

 

You need to ask them for the underwriting sheet or other document containing any commission payments

 

they will scream and kick but thats their tough titties as you are entitled to it and if they dont give you it then you can seek pre action disclosure and get the court to order them to provide it

[hellhasnofury]

Hey HHNF

 

You need to ask them for the underwriting sheet or other document containing any commission payments

 

they will scream and kick but thats their tough titties as you are entitled to it and if they dont give you it then you can seek pre action disclosure and get the court to order them to provide it

 

Thank PT, will do:-D

 

Oh I love the kicking and screaming bit:-D

[citizenB]

Hey HHNF

 

You need to ask them for the underwriting sheet or other document containing any commission payments

 

they will scream and kick but thats their tough titties as you are entitled to it and if they dont give you it then you can seek pre action disclosure and get the court to order them to provide it

 

Thank PT, will do:-D

 

Oh I love the kicking and screaming bit:-D

 

Hmmm, so do I, I didnt realise I could ask them for that information pt . I think I just might go and ruin another day for a certain advisor at the bank

[RedVixen]

ermm my brain isn't quite firing on all cylinders at the moment how does this relate to banks putting their own PPI on a loan - My Lloyds loan has Lloyds PPI which I am claiming back - now I KNOW the guy selling the loan got commission for both the loan and the PPI and have used this in my complaint to suggest that he was biased when setting it all up - they haven't answered that bit

[andrew1]

The secret commission relates to a broker getting a fee from you, which you know all about AND a fee from the insurance company/finance company without you knowing about it. It's that which you know nothing about that is 'secret' and unlawful. The way you find out if they received a fee is to ask them and the finance company to disclose it. If they didn't get/pay one then they won't mind telling you. If they did, they will so you'll have to use the legal process to find out like sending in a Subject Access Request.

 

The problem with banks is they insist, or used to on taking their insurance as a condition. The bank will obtain a commission for sure, but for the loan, well that's more an internal commission which will be part of a salary package I'd imagine if it's staff, but they still have a responsibility to offer a choice.

[RedVixen]

OK not something that I need to look at then - it was all internal which makes the claim much more straight forward. There were no arrangement fees at all

[andrew1]

How nice to know how it works Oh, and...it also says BORROWERS mustn't read this so any potential borrowers of NORTON FINANCE please do not read any further...

 

 

 

 

Norton Broker Services - Number One for Financial Intermediaries

 

" Secured loans are processed much the same as mortgage applications, with no upfront fees, valuation and legal costs.

 

Here at Norton Broker Services we pride ourselves on service. If there is anything you are having a problem with we can help.

 

Norton Broker services boast paying the highest commission rates in the Financial Intermediary Market. Your personal Account Manager will be on hand to discuss any referral, query or case updates.

 

We have a varied panel of lenders that have products to suit all circumstances.

 

Here is a quick guide to show you the areas we specialise in for secured loans –

 

Loans from £1000

Terms 1 year to 40 years

Loans available on rental properties

Self employed self certification available

Various loan purposes available

Will lend behind adverse mortgage lenders

Interest only option available

Various sources of income acceptable

Enhanced loan to values available

No restriction on age with certain lenders (Legal advice may be required)

Properties in pre-emption acceptable

Non-traditional property constructions considered

Mortgage arrears, defaults, CCJ’s and credit arrears accepted

Bankruptcy, Voluntary arrangement and shared ownership cases considered

 

THE ABOVE INFORMATION IS FOR USE BY INTERMEDIARIES ONLY AND MUST NOT BE GIVEN OR DISTRIBUTED TO POTENTIAL BORROWERS (...so all you potential borrowers who have just read that, go back to the beginning and don't read it! )

 

Unsecured loans are also available, your customer must be a homeowner, and there are no upfront or legal costs.

 

 

 

Norton Broker Services - Number One for Financial Intermediaries

 

Norton Broker Services offers you a market leading commission structure with earning potential up to 6% commission on secured loan business.

 

Earn up to 6% commission on Secured loan business*

Earn 2% commission on Unsecured loan business

 

We aim to pay your commission to you within 7 working days of case completion.

 

Please note we will require an up to date Standard Consumer Credit Licence to confirm your company name and address details on your Introducer agreement if these details differ we will require a variation licence, this can be obtained from the Office of Fair Trading. Please keep us updated on any changes to your name, address or contact details by contacting your Key Account Manager or Customer Relationship Manager on 01709 321665.

 

*With the exception of Black Horse & Welcome where we pay 2% "

 

 

He-he

 

Sarah

[midge61]

Wow great stuff Andrew1

 

How did you get hold of that?

 

most lenders have a secure login area for brokers. Don't suppose you can get the same info from SPML by any chance;)

[andrew1]

Wow great stuff Andrew1

 

How did you get hold of that?

 

most lenders have a secure login area for brokers. Don't suppose you can get the same info from SPML by any chance;)

 

I'm in the Cabot Fan Club - we never say never We have friends all over the place....New opportunities with MI6

 

 

 

Sarah

Edited January 15, 2009 by andrew1

[hellhasnofury]

Hey HHNF

 

You need to ask them for the underwriting sheet or other document containing any commission payments

 

they will scream and kick but thats their tough titties as you are entitled to it and if they dont give you it then you can seek pre action disclosure and get the court to order them to provide it

 

Hello All,

 

I have a bit of a question and wondered if anybody could guide to the anwer:D

 

Now I have sent a SAR to a financial institute who I had an endowment policy with for a mortgate. I am looking to cover all bases with this lot, as I am aware of the time restraints posed on the mis-selling of endowment mortgages.

 

Went through a Independant Financial Advisor who organised my first mortgate in 1994. Was very niave then and he pushed for the endowment telling me it guaranteed to pay off the mortgage and loads of dosh to spare. Paid this for ten years, then when I started to get the amber letters, I panicked, bailed out, surrendered it and took out a proper mortgage.

 

I wrote to them with a complaint of mis-selling and they told me it was nothing to do with me, as I arranged it via a Independant Advisor, who was not employed by them. This Independant Financial Advisor, was well old and can't get hold of him, so unfortunately either retired or snuffed it:shock:

 

I have asked them to provide information relating to the commission he was paid by their company, as they did not provide it in the SAR I sent them.

 

They have stated that because of the Durant v FSA "We may hold certain data about you, which we are not at liverty to disclose because it is not personal data or is subject to an exemption as specified in the dpa"

 

I know for a fact they paid him commission, as I recall see monthly payments given to him for several months at the beginning of the policy.

 

So they don't want to disclose this secret commission to me:-x

 

Do I still push for it under the dpa or ????????????????????????

 

I am aware that this was a long time ago, but I do like a good old dispute and cannot under any circumstances allow them to think they can get away with this. I always did like to have the last word:D