Your mortgage or secured loan may have been mis-sold to you if you experienced any of the following situations:

• Undisclosed Commission: The broker’s commission was included in your repayments without your knowledge.
• Commission-Driven Recommendations: The financial product recommended was primarily based on the broker’s commission potential, rather than what was best for your financial situation.
• Lack of Full Disclosure: You were not provided with a comprehensive and clear understanding of the terms and conditions of your mortgage or secured loan.
• Inappropriate Repayment Plan: The most suitable repayment plan for your individual needs was not recommended to you.
• Extended Loan Term: The term of your mortgage or secured loan extends beyond your expected retirement date.
• Unsuitable Deal: The recommended mortgage or secured loan was not suitable for your needs for any other valid reason.

If you’ve been unknowingly paying undisclosed commission for an extended period or believe your mortgage or secured loan was mis-sold due to any of these reasons, you may be entitled to compensation. It’s important to explore your options to address these issues and seek the compensation you deserve.

If you took out any of the following financial products, you may be eligible to make a claim:

• A secured loan taken out before 2009.
• A residential mortgage secured before 31st October 2004.
• A mortgage on a Buy to Let property.
  
  

If you have any of these financial products and suspect that they may have been subject to undisclosed commissions or secret commissions. If you would like assistance, you could contact a claims management company or a legal expert specialising in these matters to explore your potential claim.

A significant number of homeowners in the UK have been subject to overcharges on their residential mortgages, buy-to-let mortgages, or secured loans.

Prominent lenders, often recognised as “household names,” have been implicated in paying and receiving undisclosed commissions. These commissions have been financed through higher interest charges applied over the entire loan or mortgage term.

The mortgages associated with the potential mis-selling primarily involve sub-prime lenders, and these companies are typically the most significant culprits. Sub-prime lenders traditionally distributed their mortgages and loans through a network of brokers and mortgage advisers.

The sub-prime market targeted individuals who may have encountered difficulties obtaining mortgages or loans due to various factors, including:

• Inability to provide proof of income.
• Needing to borrow amounts exceeding what traditional lenders would approve.
• Inability to afford the large deposits required by traditional lenders.
• Past credit-related issues that made obtaining credit challenging.

However, as the use of brokers became more widespread in the 1990s and early 2000s, a broader range of borrowers became involved. At this stage, sub-prime mortgages were appealing because, despite having higher interest rates compared to high street banks, many brokers arranged interest-only loans without a repayment plan in place. This feature made them appear more affordable on a monthly basis than the repayment mortgages offered by high street banks.

The combination of sub-prime lenders and brokers led to a significant number of mortgages, potentially with undisclosed commissions, which could be subject to mis-selling claims.

The mis-selling of mortgages, particularly by sub-prime lenders, was facilitated by the fact that these lenders charged higher than average interest rates, and these rates varied from one lender to another. This variation in interest rates allowed for the payment of secret commissions without the knowledge of the individuals taking out the loans or mortgages.

The illicit commission payment occurred when the lender paid a financial adviser (broker) a concealed fee, which was not disclosed to the borrower. Brokers are expected to work in the best interests of their customers, securing the most advantageous deal available. However, many lenders were willing to offer an extra commission to the broker, which often resulted in the borrower paying thousands of pounds in extra interest over several years. This financial incentive put the broker in a compromising position, where their duty to provide impartial advice and act in the customer’s best interest was conflicted by their financial interest in receiving a commission.

In many cases, these commission payments were so well-hidden that they went undetected.

When calculating the losses associated with a successful claim for undisclosed commission or secret commission, the goal is to restore you to the position you would have been in had the commission not been paid. This typically includes the following elements:

• The undisclosed commission itself, which can amount to thousands of pounds.
• The additional interest you paid over the duration of your mortgage or loan payments.

Over time, the interest payments can accumulate significantly, and in some cases, the losses can be so substantial or involve multiple factors that the entire loan or mortgage is written off. This is referred to as “rescission,” where the contract is effectively cancelled, and you may be entitled to a complete refund.

It is important to understand that every case is different and there is no definitive guide to the amount of compensation that may be won. It is advisable to proceed with our free case review of your specific circumstances to obtain a more detailed understanding of your case. Please check here