OFT guidelines on fee charging brokers
If you are one of the many clients who have applied to a loan company for a guarantor loan, only to be charged an upfront fee for the privilege of doing so, then there is help and guidance at hand from the Office of Fair Trading (OFT).
This situation is compounded when the loan broker cannot find you a loan and in many cases, potential borrowers should never have been charged in the first place because they are not working or are just receiving benefits. Then when the individual concerned tries to get their money back, they can’t as the loan broker will not reply to emails or telephone calls.
The Consumer Credit Act limits a credit broker’s charges to £5 if, following an introduction to a lender, an agreement is not signed within six months. If more than that has already been paid, brokers must refund the excess on request.
You can find the full details here on the OFT website which also includes a guide on “Right to recover broker fees”.
The problem is becoming so widespread that the Citizens Advice Bureau also publish guidelines of their own and are in contstant contact with the OFT. Further information can be found here at Citizens Advice on Credit Brokers and Intermediaries.
