can a broker charge a fee?

veebeeseewee

veebeeseewee

Hi all,

I wonder if that's possible for a broker to charge for a service fee if his clients decided not to go with his service anymore after 6-9 months of helping his clients to get a loan without success?

I've never heard of this but my friends are concerned. My concern is this broker probably has ruined their credit files by multiple applications without success over months, so how possibly the broker can still charge them for a service fee if they decided not to continue with his service?!!

If anyone knows anything about this issue, can you please share your experience/opinion?

Many thanks,
Theo
 
The broker is free to charge whatever fee they like. The fee does not need to be condingent on success.

If the broker does wish to charge a fee, it must be disclosed to the client in writing and agreed to, prior to commencing the work.

Charging a fee isn't really common, but many brokers do charge a nominal fee if the loan approved but not taken. Other cases are if a claw-back on the loan occurs, or if the loan is a small amount so the commission doesn't cover the cost of writing it.
 
Hi Theo,

The broker can charge a service fee however it must have been agreed to previously. It's not a charge they can just decide to apply retrospectively. If your friend had agreed to it they should have signed a Credit Quote which should detail how much and what the broker will charge your friend for.
 
veebeeseewee said:
I've never heard of this but my friends are concerned. My concern is this broker probably has ruined their credit files by multiple applications without success over months, so how possibly the broker can still charge them for a service fee if they decided not to continue with his service?!!
Click to expand...

Perhaps a fee is the least of your friends concern......................

Id suggest you ask them to pull their credit file from someone like

www.mycreditfile.com.au

this will give them an idea of what has actually been applied for, and a if a rescue mission is possible.

ta

rolf
 
Thanks for some quick responses!

It is reasonable if it is mentioned prior commencing any work, totally agreed. I'll have to double check with my friends in this case if they had signed any paperwork regarding such agreement. To my understanding, their other friend was shocked to receive a service charge of $400-600 after deciding not to go with this broker after some works had been done. I don't want them to get stucked with the same broker and not have any option when he cannot get them a loan after so long, plus possibly resulting two poor credit files!
 
Rolf Latham said:
Perhaps a fee is the least of your friends concern......................

Id suggest you ask them to pull their credit file from someone like

www.mycreditfile.com.au

this will give them an idea of what has actually been applied for, and a if a rescue mission is possible.

ta

rolf
Click to expand...

totally agreed with you, Rolf. I've already sent them the link to apply for their credit file to see where they are up to, cuz there might be hope still...
 
As the guys have said before, a broker cannot charge a fee unless it has been disclosed in the 'credit quote'. By far and large, most brokers don't even give a credit quote because they are paid by the lender rather than the client directly.
 
We just invoiced for fees for a loan the client didnt proceed with as they changed their mind at the end. Costs & credit quote were fully disclosed & explained upfront before any work was done.

In your friends case, 6-9 months worth of work on the brokers side seems to be a long time to sort out finance. Is more to the story?
 
I charge for short term loans where I know I will be clawed back by the lender and for loans less than $200,000 in aggregate. I also have a claw back policy writen into my credit quote document.
 
Just confirmed with them that they had never signed any document with their broker. So does he have the right to charge them still?

Good question but not sure why it took so long and they had been asked for their payslips for multiple times too, which makes me worry about their credit file.
 
Theo
I'd ask the broker to produce the written agreement.

If the broker can do it then I'd pay up as they entered into a contract.
 
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