The Financial Ombudsman Service has ordered a mortgage adviser to pay back his client £700 in up-front mortgage fees after texting a promise that they would be returned if no mortgage was arranged.
The client, known simply as Mrs B, paid £500 for mortgage adviser Mark MacKenzie to source a mortgage on top of a £200 product fee, asking by text: “…just double checking, how will it work with the upfront payment? What will happen if for any reason I don’t get the mortgage.”
MacKenzie responded: “Returned if I can’t source you a mortgage.”
When the £85,000 mortgage fell through Mrs B repeatedly contacted the adviser who wouldn’t respond.
MacKenzie’s firm said it had “fulfilled my brief and the terms of payment by sourcing and arranging a suitable mortgage deal.”
The Ombudsman ruled that although the £500 was not refundable, the broker was responsible as the text message gave that impression.
The Key Facts Illustration sheet meanwhile said the £200 arrangement fee would be refunded if the mortgage did not complete.
The Ombudsman ruled: “I order Mark MacKenzie to refund £700 of the fees that Mrs B paid.
“This is made up of the £500 fee charged by Mark Mackenzie and the £200 product arrangement fee.”