March 2015, the Court of Appeal gave judgement in the McWilliam & McWilliam v Norton Finance (UK) Limited case [a full copy of the judgement can be found here]. The case has huge implications for customers who have entered a loan agreement that has been introduced by a credit broker.
Should a customer go through a credit broker to arrange a secured loan, then the consumer is entitled to the “single minded loyalty” of the credit broker;
- They must act in good faith
- A secret profit must not be taken
- They must not place themselves in a position where their duty and their interest may conflict
Therefore, where a credit broker is paid a secret commission by the lender, the broker and / or lender should disclose the amount to the borrower (customer) for this secret profit. An investigation can be done to assess whether a secret commission has been paid.
Prior to the credit crunch, the secured loan market was a £7billion a year industry. Loan brokers were paid handsomely with average commissions of £3,000. Neither lenders, (who paid the commission) nor brokers, (who received the commission) provided sufficient information to borrowers to ensure that these payments did not cause any conflict of interest. Queensbeck can recover commission that were not disclosed to the borrower.
Should Rowan Rose find evidence of a secret commission then the team will begin to prepare your claim to ensure the secret profit is paid back to you. Rowan Rose have dealt with claims between lenders and their brokers with an average commission of £3,000 plus, per case. Taking statutory interest into account, a typical claim would be £5,400.
If you have taken out a loan in the last 20 years or would like Rowan Rose to investigate secret commission claims involving the following transactions then get in touch;
- Second Charge loans