Santander has pledged to reform the way it pays retention procuration fees to advisers, removing a system glitch that is cutting out brokers and encouraging some clients to go direct.
Last week Money Marketing sister title Mortgage Strategy was approached by brokers who said the lender had contacted their clients with direct offers after their customers have experienced technical issues when using Santander’s website.
At the moment brokers handling Santander product transfers fill in customer details on the lender’s system, including their email address.
Santander then emails the customer to encourage them to go online and accept the offer, after which eligible brokers will get a 0.20 per cent proc fee.
But problems arise when customers have problems with the online process – being unable to log in, for example.
At that point Santander sends an automatic message to the client asking them to call the lender, and encourages them to go direct.
Santander tells Mortgage Strategy it is working to fix the problem, but that this will take weeks.
A Santander spokeswoman says: “We are aware of a few instances of where customers have got stuck when accepting their new KFI and the system has referred them back to Santander.
“We are amending the messaging on our screens to eliminate this, which should be completed during May 2017.”
To brokers who felt they were being cut out of the loop, the Santander spokeswoman says: “We are working to ensure that all our systems point customers back to their broker.” Santander is rolling out its retention proc fees to selected networks.
Santander for Intermediaries sales director Brad Fordham says: “All brokers already have access to this system and all will be eligible to receive payment by the end of June this year.
“We have already seen it being used several hundred times a day in Q1 and our relationship team is helping brokers understand the system and the customer journey.”
Fordham adds: “Alongside this, we are working to ensure that wording during the product renewal process points customers back to their broker, and brokers encourage customers to come back to them with any questions.
“We want to work in partnership with our mortgage brokers to help them provide their customers with the best mortgage products.”
Procuration fee push
In early January, Mortgage Strategy revealed that Santander intended to pay retention proc fees, leading to similar announcements from organisations including Aldermore, Coventry for Intermediaries, Leeds Building Society, Nationwide, NatWest, Skipton Intermediaries and TSB.
Brokers warn that they expect to see more examples of retention proc fee difficulties as other lenders hastily update their systems to roll out the payments.
London Money founder Martin Stewart says: “I think there are going to be a lot of clunky systems at all these lenders.
“A lot of them didn’t get the lead-in times they were hoping for to launch them into the market.”
Coreco director Andrew Montlake says: “With any new system there are gremlins that will take a while to sort out.
“Brokers need to be patient and feed any issues they have back to the lender.”
Montlake adds that changing lender behaviour can take more time than brokers expect.
He says: “To be fair to the lenders, what looks like an easy fix to us might not be to them. It’s about getting the money, time and people to make those changes and, especially at big organisations, that can be tough.
“The more we brokers make them aware of problems, the quicker they’ll be able to fix them.”
Your Mortgage Decisions director Dominik Lipnicki says: “Mortgage brokers can expect some teething problems, but how the lenders react to these is what brokers are waiting to see. If a system is new or almost new it’s usual to have some problems, especially when technology is involved.”