Mortgage brokers have criticised a secured loans packager for offering sales incentives including bottles of champagne and iPads for business received.
The Lending Wizard, a sourcing tool run by packager Freedom Finance, offers brokers an iPad Mini, Kindle Fire or iPhone 5 for the first secured loan they complete. Brokers using the system receive a bottle of champagne if they complete a secured loan within 30 days.
The “top introducer” each month takes home another bottle of champagne while the broker of the year gets an unspecified “grand prize”.
The Lending Wizard says awards are not judged purely on sales although there are no “defined criteria”.
The firm will review the scheme in April when secured loans become regulated by the FCA instead of the Office of Fair Trading.
The Lending Wizard denies that the scheme falls foul of FCA rules and says it provides “rewards” for building work relationships.
John Charcol senior technical manager Ray Boulger says: “Any packager offering these types of prizes after April is asking for trouble. Any email I get that starts off by offering an iPad Mini on the first completion tells me this is a company I do not want to deal with.”
London & Country associate director of communications David Hollingworth says: “If this starts to sway the advice given, it will not be seen favourably by the regulator.”