C&G cricticised over arrangement fee</p><p>practices

The criticism follows discontent among intermediaries over the unfair practices undertaken by lenders in levying exit and arrangement fees in a bid to keep borrowers on the books.

The spat follows the lender’s receipt of a buy-to-let application from a client, which provided the option of adding the arrangement fee to the loan on completion. Although the client paid the fee upfront, complications and hesitancy from C&G underwriters led to the case being withdrawn and submitted to another lender. However, despite attempts to retrieve money, C&G has retained the fee.

Discussing the case, an industry source close to Mortgage Introducer, said: “We contacted C&G to get the arrangement fee back, as it states quite clearly on the Key Facts Illustration (KFI) the fee can be added to the loan, but surprise, surprise, it has decided it is legally obliged to retain this fee. We’ve appealed but apparently C&G’s legal department has proclaimed it’s right in their decision. Obviously customer relations mean nothing.”

While C&G said it could not comment on individual cases without the approval of the client, it defended its decision to retain the £699 fee. John Champion, intermediary sales director at C&G, said: “In line with most lenders, our application fee is not refundable, as there’s a lot of time-consuming and costly work involved in processing mortgage applications. The fee information on our KFI includes a clear statement that the fee is not refundable. We will of course investigate this complaint, and if we find we have fallen down in our procedures or let the customer down, then we will be pleased to refund the application fee.”