The letter, sent out to packagers last week, says: "Please be advised that Bank of Scotland can only accept applications via packagers where the advising firm is either directly authorised or an appointed representative of the packager. Where the principal is completely separate, such as Sesame or Legal & General, then we cannot accept applications from such appointed representatives via a packager."
Although BoS insists that this policy has been in effect since ‘Mortgage Day’, packagers have told Mortgage Introducer that this is the first time they have heard of the lender’s policy since regulation began.
Vic Jannels, group managing director at All Types of Mortgages (AToM), said this move by BoS is completely unacceptable. He said: "We are disappointed that BoS would take this step. Is this the first stage in the entire HBoS group not using packagers that are separate from the AR?
"We want to know what its justification for doing this is. Each party in the chain is a regulated entity, so where is the problem? I would understand if this was directed at unregulated packagers, but this is directed at regulated packagers as well, and this is completely unacceptable."
Jannels added he contacted BoS as soon as he received the letter but has so far received no reply from the lender.
Bill Dudgeon, managing director of The Mortgage Business (TMB), part of the HBoS group, said this move by BoS is most likely connected to the way it wishes to pay packager fees. "On the face of it, it looks like BoS wants to pay the fees to the principal rather than the packager so this policy just makes it easier to do this. But we are not making any changes to the way we deal with packagers."
One source said: "This is clearly a way for the principal or network to control the fees so they go to the AR and then they can take their own cut."
David Gibb, head of national accounts at BoS, denied the policy has anything to do with the way it wants to pay packager fees. He said: "We are not trying to alienate packagers. We are just trying to create a balance in terms of the introducers we use and who is supporting us. Since regulation there has been an increase in packagers approaching ARs offering their services. We are just trying to ensure there is a balance."
