Connells has been told to refund the fee they charged a couple for arranging a Help to Buy mortgage and pay up £250 compensation.
A couple, called Mr and Mrs M, complained about the service they got from Connells Limited when they were buying their new build home.
The pair said the Connells adviser told them if they paid a fee to the broker called a 'lifetime membership subscription' that she would negotiate extras from the builder.
Both sides agreed there was a discussion about the Connells consultant trying to get some extras from the builder for this new build property and this occurred at the same time as they discussed which brokerage fee Mr and Mrs M should pay.
Mr and Mrs M said that as the adviser told them she could get the builder to add in carpets, they agreed to pay the lifetime membership subscription.
The adviser argued that she had hoped to get Mr and Mrs M some extras but she made it clear to them that her fee did not depend on her ability to do that.
Unfortunately, the adviser said that in error she told Mr and Mrs M that the builder would add in the carpets but then had to tell them that she had made a mistake as she was referring to another customer.
Mr and Mrs M were first-time buyers under the Help to Buy scheme, were on the limits of affordability of this mortgage and had to get extra help from family.
In a final decision, ombudsman Gerard McManus said faced with a choice of brokerage fees, cost would have been a prime consideration unless some other incentive was available.
Mr McManus said: “I believe that without the incentive, they would have chosen Connells no fee service.
“Mr and Mrs M also got confusing information from the mortgage adviser and from an administrator as to what the interest rate on the mortgage would be and how much they would have to pay.”
emma.hughes@ft.com
