Mortgages  

Advisers warn of estate agent data protection breaches

Some leading estate agents are holding prospective homeowners hostage by demanding proof of deposits held and account details in a potential breach of the Data Protection Act, advisers have claimed.

Advisers such as Dermot Brannigan, a Wiltshire-based sole trader, warned that some estate agents are breaching the Estate Agents Act of 1979 by refusing to pass on offers unless they receive the decision in principle and proof of deposit.

Mr Brannigan said: “The estate agent does not have the right to know who a client’s lender is or what their financial background is.”

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Chris Clare, a former financial adviser who now runs technology services provider SanctionSearch.com, said there were concerns that buyers’ personal financial information could be passed onto the vendors, which could limit the purchaser’s ability to negotiate competitively.

He said if the vendor were to find out that a buyer has a 50 per cent deposit, then the vendor would know that he or she could negotiate a higher price for the house.

Mr Clare added: “Even the vendor’s solicitor does not need half of the information that some estate agents are asking for. All the vendor and his agents need to know is: can you afford the house? I would refuse to give any other information.”

Although estate agents have to obey the 1979 Act, which according to the Office of Fair Trading provides a regulated environment for the industry, estate agents do not have a dedicated regulator in the way that pensions or financial services have.

A spokesman for the FCA said it had been given no additional powers to regulate the industry in the Financial Services Act, which was given royal assent on 18 December, but that it does work closely with other industry bodies to encourage all firms to be “mindful of risks” in gathering data.

Donna Hopton, founder of Cherry Forum, said: “We suspect that those that speak out represent merely the tip of the iceberg, especially given that we know some networks effectively gag their ARs by preventing them from talking to us, to the press or even raising issues on social media.”

A spokesman for the Information Commissioner’s Office said advisers should make a complaint if an organisation is requesting “excessive amounts of personal information”.

Meanwhile, some advisers have found some branches of Countrywide-owned Bairstow Eves estate agents have told clients they cannot get the home they want unless they speak with the in-house mortgage adviser.

Brian Brotherton, principal of Essex-based The Partnership, said: “Bairstow Eves would not put an offer forward for consideration unless our client spoke to the mortgage adviser in-house. When I phoned the firm and told them I would be acting on their behalf, they rejected my client’s offer outright.”

A spokesman for Countrywide, said: “We have a duty of care to our vendors so before recommending an offer, we need to be able to confirm that a prospective purchaser is able to fund the transaction.