Peter O’ Donovan, mortgage manager for Bestinvest, said when his clients received their first statement, they discovered the £499 arrangement fee was being held separately from the mortgage. O’ Donovan added they had been unaware they had to make separate payments towards the fee and his clients were told it would cost an additional £10 to clear the amount.
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He said: “C&G doesn’t make it clear the two are separate. I assumed it was added to the loan as it says on the Key Facts Illustration. If you don’t know the two are kept separate, this money sits and accrues interest. I’m now worried that other clients who haven’t looked at their statement properly are being affected and don’t realise they aren’t putting any money towards that part of the loan. I’m not aware of any other lender that does this.”
A spokesperson for C&G confirmed the fees were split and added: “This mimics the first loan and stays on those rate conditions. It is in our terms and conditions and is explained to the customer. We feel this is a standard and fair policy.”
This adds to the increasing criticism C&G has faced from brokers protesting over ‘atrocious’ processing and a consistent lack of service and communication. Brokers have cited cases taking five weeks to reach an offer.
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