§ Mr. ToddTo ask the Secretary of State for Trade and Industry what actions he will take to prevent mortgage advisers charging non-returnable arrangement fees on loans not proceeded with. [98747]
§ Dr. HowellsUnder Section 155 of the Consumer Credit Act 1974, the excess over £5.00 of a fee or commission charged to an individual by a credit-broker ceases to be payable or becomes refundable if no credit agreement results from an introduction arranged by the broker within six months.
Mortgage advisers satisfy the definition of "credit broker" in the Act if they introduce mortgage lenders to people who want a mortgage to buy a home.
If a credit-broker did not comply with this provision, the Director General of Fair Trading would take this into account when considering the broker's fitness to hold a consumer credit licence. The Director General has shown that he is ready to revoke licences where he considers such action necessary to protect consumers.