Login
ISCOVER
Brokers have been urged to band together and hold lenders responsible when they cancel accreditations without explanation.
Outsource Financial chief executive Tanya Sale told a Sydney function that brokers had considerable market power now they were providing banks with 50 per cent of their volumes.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Ms Sale was speaking at last Friday’s meeting of the Independent Finance Brokers Forum, which discussed a recent case of a lender cancelling a broker’s accreditation without explanation.
She was joined on a panel discussion by Connective director Mark Haron and Vow Financial national sales manager Leighton King, all of whom said they had had brokers suffer a similar fate since NCCP was introduced.
Ms Sale said that when a lender cancelled the accreditation of an Outsource Financial broker without explanation, the aggregator had made a point of holding the lender accountable by sharing details of its behaviour with its loan writers.
“If a lender has that type of control and authority over your business, we’re all in trouble,” she said.
Mr Haron said brokers and lenders were put in a difficult position when “faceless” men cancelled accreditations and then refused to explain what the broker was alleged to have done.
He said such silence made it impossible for aggregators to know whether any fraud had been committed and what action, if any, they needed to take.
Mr King told the audience that Vow was also frustrated when accreditations were cancelled with explanation.
He called for an end to “all the smoke and mirrors”.
“It’s the broker’s livelihood you’re dealing with here and it’s the reputation of the aggregator,” he said.
MFAA chief executive Phil Naylor and FBAA president Peter White also attended the meeting.
Mr Naylor told The Adviser that although it was unpleasant, the “cold, hard legal facts” were that lenders had a right to cancel accreditations without explanation.
“We do get frustrated from time to time when lenders cancel contracts without any reason why,” he said.
“From our point of view, if it’s been cancelled for improper behaviour like fraud or something, then we want to know. So that’s frustrating for us.
“And I can understand a broker just being told out of the blue, ‘look we’re not going to deal with you anymore’ – you really have to try and understand the circumstances of why.”
