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Intelligent finance probes broker incentive claims

Intelligent Finance is to investigate after a mortgage broker claims incentives were being offered which could fall foul of disclosure regulations.

A broker in the South of England says he was told he could win Red Letter Day vouchers from the online bank if he sold the most IF mortgage products each month.

The broker, who wants to remain anonymous, says offers of valuable prizes for hitting sales targets amounts to commission and should be declared to clients under the new disclosure rules.

Intelligent Finance confirms it does offer Red Letter Day packages to brokers but only as part of a prize draw. The Halifax-owned bank stresses that this promotion is not linked to sales and that the prize draw offer has been running on a small local level only.

FSA spokesman Robin Gordon Walker says there are strict guidelines on incentives but he believes this is an isolated incident and that the problem is not endemic in the mortgage industry.

But the broker says: “This sort of practice is rife. It is absolutely outrageous. This goes right against what mortgage regulation was trying to achieve.”

IF senior communications officer Jennifer Blackwood says: “We are very concerned that this has happened. We need to conduct an investigation. Clearly, brokers should not be offered anything in terms of volume.”

The Mortgage Practitioner sole trader Danny Lovey, who has not been approached by IF, says: “One of the reasons I am independent is because it is the only way I can guarantee my own integrity. I know giving incentives certainly used to happen before mortgage regulation.”

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