NACFB warns brokers over upfront fees

Adam Tyler, Chief Executive of the NACFB said that there had been an increasing number of calls to the NACFB head office complaining about certain lenders' tactics.

He said: "I have taken numerous calls in recent weeks from brokers concerned that a lender will only consider a deal on the proviso of a payment of a large upfront fee. These fees can amount to thousands of pounds, and the lender makes no guarantee that in return they will lend money to the broker's client. The NACFB's advice to any broker who finds themselves in this situation is not to deal with a lender who tries this kind of tactics. For NACFB members, the Association works with a group of Patrons; these are lenders who agree to support the Association's Code of Practice and wouldn't operate this kind of business model."

He continued: "The NACFB was set up over 15 years ago to combat advanced fee among brokers; the current difficult economic conditions have led some lenders to demand large amounts of money, for no guarantee of any kind of service, from clients who are vulnerable because they are desperate for some kind of financial assistance. The Association takes a very dim view of these kinds of activities and would hope that all commercial finance brokers would steer clear of any lender who tried to extort large amounts of money from their clients in this way."

Adrian Bloomfield, Chief executive of the Association of Short Term Lenders (astl) said: "We would expect all of our members to make their terms crystal clear to any applicant. As a trade association the astl would welcome any appropriate information from applicants (or brokers) concerning any astl member who may be operating unfair business practices."