Not upheld: unfair charges - Lifetime Broker Fee complaint against Connells Limited

Decision detail

Summary

Mr J complained that the Lifetime Broker Fee of £499 charged by Connells Limited in 2017 was unfair, arguing he should only pay the £99 administration fee for future remortgage services. Connells offered a partial refund of £249.50 and £50 compensation for complaint handling delays. The ombudsman upheld Connells' settlement, finding that the fee structure was clearly disclosed in the Key Information Document, the Lifetime Broker Fee was a legitimate charge for mortgage advice and arrangement services provided in 2017, and Mr J's choice not to use Connells' services in the future did not justify a larger refund. The ombudsman noted that broker services provide value through research, comparison, and paperwork management, and that future remortgages might be cost-effective through Connells depending on lender offerings.

The Ombudsman's reasoning

The ombudsman found that Connells clearly disclosed the fee structure to Mr J in 2017 through the Key Information Document, which was not disputed by Mr J. The Lifetime Broker Fee was a legitimate charge for mortgage advice and arrangement services provided in 2017. The fact that Mr J chose not to use Connells' services in the future due to cost considerations does not mean the original fee was unfair or that the service would not be cost-effective in other circumstances. Broker fees for advice and arrangement are distinct from lender fees, and brokers provide value through research, comparison, and paperwork management. The partial refund offered by Connells was reasonable given Mr J received the service in 2017. Poor communication during the later enquiry caused no financial loss as Mr J would have remortgaged directly with his existing lender regardless.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website