Not upheld: broker fee refund and service complaint complaint against Connect IFA Ltd (trading as Connect Mortgages)

Decision detail

Summary

Mr and Mrs A complained that they were charged a broker fee of 1% of the mortgage amount by Connect Mortgages for a mortgage that did not complete due to the property purchase falling through. They initially sought a full refund, later arguing the fee was too high and disproportionate given their lack of experience. Connect declined to refund the fee but offered 25% as a gesture of goodwill, which was not paid. The ombudsman found the fee was clearly disclosed in the signed terms of business, was not unreasonable, and was properly payable upon receipt of the mortgage offer. Since the purchase fell through for reasons unrelated to the broker's service, the fee was not refundable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the 1% broker fee, while at the higher end of the range, was not unreasonable at the time and was clearly disclosed in the terms of business which Mr and Mrs A signed. Since the property purchase fell through for reasons unrelated to the broker's service, the fee was not refundable as the service covered by the fee had been provided. The 25% goodwill offer made by Connect was reasonable compensation for the lack of response to the original refund request. The ombudsman noted that even if the payment had been made as promised, it was unlikely they would have required more compensation.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website