Brokers have criticised a “cynical ploy” by lenders to operate telephone support lines charged at premium rates for lower-price loans and enquiries such as chasing procuration fees.
Money Marketing sister title Mortgage Strategy revealed last week that Woolwich forces brokers to use a more expensive premium-rate lending support line to discuss deals
below a certain value.
When wanting to talk about a declined application or cases that fall outside the lender’s normal criteria, brokers have a choice of two phone lines. For applications where the loan size exceeds £600,000, they can use a standard landline that costs 1p a minute or is free. But for loan sizes below that level, brokers must call an 0870 premium-rate line.
If an adviser wants to discuss their proc fee payments, Woolwich offers a separate phone number which is again charged at a premium rate.
Moneysavingexpert.com says the costs of ringing these numbers can reach 41p a minute.
But Woolwich is not the only lender to operate a dual-charging policy for its phone lines. Halifax Inter-mediaries offers a standard-rate 0207 number to discuss cases where the loan amount is more than £300,000.
Cases with loans below that figure must be discussed using a premium-rate phone line.
Nationwide has a premium-rate administration line for both pre- and post-application cases. Technical queries also require brokers to call a more expensive 0845 number. Meanwhile, Santander for Intermediaries and NatWest Intermediary Solutions both have premium-rate broker support lines.
John Charcol senior technical manager Ray Boulger believes the revenue levels generated by premium-rate phone lines may be attractive to small and medium-sized businesses but should be negligible for the country’s largest mortgage lenders.
Boulger says: “On the basis that the lender would generate only a very small percentage of their rev-enue from these calls, it seems a very cynical move for any provider to use those numbers.
“It can say a lot about a com-pany in terms of how they treat their customers. What prevents them from having the cheapest lines possible to conduct business with their brokers? These admin calls can often take a long time and many brokers still conduct them over their mobile phones, which we all know to be even more expensive.”
Your Mortgage Decisions director Dominik Lipnicki says: “It is out-rageous. Some of these lenders should really take stock of every-thing they are doing and iron out
“With the MMR coming in in just a couple of weeks, I would expect lenders to have looked at every aspect of their broker relationships and asked themselves whether they have done everything to make broker support as efficient as possible.”
Boulger says the call-charge policy is distasteful.
He says: “Brokers are the customer in this case and this is not treating customers fairly. It suggests they recognise the value in offering a cheaper line.”
Lipnicki adds: “Why does the loan size matter? A difference of £1 could result in a very cheap phone call quickly becoming vastly more expensive.
“Whichever way a broker choo-ses to look at it, does it not shriek of valuing one customer more than another?
“I find it absolutely absurd that mainstream lenders would do something like this, especially when the MMR is just around the corner and we are all trying to work together to create a more efficient system.”
Perception Finance managing dir-ec-tor David Sheppard believes lenders are not working hard enough to understand this issue from the brokers’ perspective.
He says: “Most brokers will have that horror story of spending ages on the phone trying to sort out a particular case. It is not only time-consuming but expensive as well. Lenders would do well to make sure the staff they trust to handle queries are efficient and well trained to keep call times down. If they are going to charge sky-high rates for making the call in the first place, it is the least they could do.
“If you are a small one-man operation, you have to keep all your costs in check with even greater scrutiny. It sounds trivial but spending £5,000 a year just for calling to check on your applications can be very burdensome.”
Alternative phone numbers can be found through websites such as saynoto0870.co.uk and there are also mobile phone apps designed to overcome the problem of premium-rate lines. These include WeQ4U, which allows users to call an 0333 number, charged at the standard landline rate, and enter the premium-rate number they are trying to reach. WeQ4U then dials that number and waits on hold until the call is answered.
The app then rings the user’s phone twice and they continue the call on the standard-rate line.
But brokers say they should not have to resort to such measures.
Lipnicki says: “I am aware these tools are available but why should brokers have to go through these hoops to save on their own costs? Ulti-mately, we are creating business for the lenders and in order to get that business done, we have to pay silly amounts just to make a phonecall.
“It does not take a genius to see the real solution would be for lenders to bring those costs down, ramp up their own staff to make the calls quicker and finally start working with the interests of brokers in mind. Post-MMR, we will have to work together better than this.”
Different phone rates charged by lenders based on business type
|Lender||Department||Rate||Cost of 15 min call|
|Woolwich for Intermediaries||Lending Support (loan size >£600,000)||Standard (avg. 1p per minute or free)||£0.15 or free|
|Lending Support (loan size <£600,000)||Premium (avg. 8p per min up to 41p)||£1.20 up to £6.15|
|Halifax Intermediaries||Premier Mortgage Services (loan size >£300k)||Standard (avg. 1p per minute or free)||£0.15 or free|
|Mortgage Processing||Premium (avg. 7p per min up to 31p)||£1.05 up to £4.65|
|Nationwide||Case Administration & Technical Queries||Premium (avg. 7p per min up to 31p)||£1.05 up to £4.65|
|Santander for Intermediaries||Case Administration||Premium (avg. 7p per min up to 31p)||£1.05 up to £4.65|
|NatWest Intermediary Solutions||Case Administration & Technical Queries||Premium (avg. 7p per min up to 31p)||£1.05 up to £4.65|