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CML chair slams proc fees for distorting choice

Martin van der Heiden
Martin van der Heiden

The Council of Mortgage Lenders chairman Martijn Van Der Heijden has hit out at “hidden procuration fees” for distorting consumer choice.

Speaking at the trade body’s annual conference in London today, Van Der Heijden, who is also head of lending at direct-only lender HSBC, lumped proc fees in the same category as staff incentives.

He said: “We have to make distribution work for the customer – the quality of advised sales is sometimes inconsistent.

“Hidden procuration fees, the deferentials that exist, staff incentives can distort choice.

“Sometimes the product sale fails a key test that I think we should always hold ourselves against – the product that was chosen should be the right one for the customer. That should be true all the time.”

He added that the banking and lending industry has more work to do to develop a relationship of trust with its existing borrowers and with the borrowers of the future.

He said: “Many of who, rightly or wrongly, see us as the cause of problems rather than the providers of solutions.

“All these three things that we know point us in a single direction – to show our customers that they are genuinely at the heart of our businesses.

“We are capable of acknowledging the market weaknesses that caused us problems, as well as capable of knowing what a good market looks like. And we are ready to move on, to build that successful market of the future.”


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There are 13 comments at the moment, we would love to hear your opinion too.

  1. Scott Taylor-Barr 7th November 2012 at 12:52 pm


    PPI miss-selling. Endowment miss-selling. Pension miss-selling. All far higher within the Banks than within the wider advice community.

    So of course it’s proc fees that we need to concentrate on?

    Am I being a cycnic or is the fact this is coming from the largest direct only lender in the market relevant at all – may be a little bias in there?

  2. Banks need to demonstrate that they understand the relationship of secured lending with the markets and generally how mortgages work – for over 30 years they have displayed wilful and total ignorance.

  3. Hidden procuration fees? I assume he means his staff incentives that he doesn’t have declare on the KFI, unlike the procuration fee and any fee charged from a broker which MUST be on the KFI?

  4. Vested Interest ??

  5. Lectured by HSBC about TCF – mmm nope.

  6. Lenders introduced procuration fees not IFA`s in an attempt to increase their own share of the market. Only natural that now HSBC have withdrawn from this system that they now feel it is not fit for pupose. Hindsight eh? Last refuge of the clueless official.

  7. George Williamson 7th November 2012 at 1:34 pm

    The comments by Martijn Van Der Heijden are a blatant lie – I would suggest the he changes his name to Martijn Van HoodWink to warn everyone he meets that his utterances should not be believed.

  8. and yet there are still plenty of brokers who will recommend HSBC or other companies that don’t pay a proc fee. If you don’t pay me I won’t work for you, simples!!!

  9. This impartial view of the industry will also of course be accompanied by a full salary disclosure on all the correspondence this gentleman sends to his colleagues and clients

  10. I don’t in general disagree. But why on earth is he still silent on the greatest Con of all?

    Why oh why is it compulsory to have a ‘mortgage club’ (EG PMS and the like) before submitting an application? I am not alone in submitting directly to the lender. The KFD then states that so much is paid to me (rebated) and the club. But the amount paid to the club is or disclosed. As I rebate I have to ask the lender how much is paid to the club and then explain to the client that the club receives this fee for doing precisely bugger all.

    High time this was stopped.

  11. Ah morality lessons from a bank currently under the microscope for money laundering violations.

  12. Most lenders pay pretty much the same in proc fees. The difference of a few quid makes no difference to where I sumbit a mortgage, its what is right for the customer that is the overriding factor. Problem with these corporate hypocrites is that they think we all behave in the same disgraceful way they do!! I wonder how many proc fees divide into his salary!

  13. I don’t make my clients by grossly overpriced insurance products and sit through meaningless meetings pretending its so they can get a mortgage.

    I don’t recommend products with massive upfront fee’s knowing that the surveyor will give a ridiculously low market valuation so my clients get a more extensively priced product.

    I don’t insist my clients use shoddy conveyancers who pay me a fee.

    I dont try and make my clients pay their salaries into a specific bank account which charges fee’s so they can get a mortgage.

    HSBC do however.

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