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Sour grapes over Poso charges

I was surprised to read Tim Hague’s suggestion headlined, Poso probe is needed to check fees (Money Marketing, September 21), that either the FSA or OFT will become interested in the profit margin made by lenders on their up-front fees.

If they did, they might query the 1,499 arrangement fee that BM has charged on some of its products. But they won’t because fees and interest rates clearly quoted by lenders on their pre-sale KFIs are already subject to intensive competitive pressure and form no part of a regulator’s remit.

For our point of sale offer (Poso) system, we charge the same application fee scale that we have used for many years. On the majority of business we do, this fee is refunded after completion.

About 40 per cent of cases go to manual valuation anyway and our approach to fee-charging (that is, no extra) and our continuation of fee-refunding has been extremely well received by intermediaries whose business lives are being transformed by full, binding mortgage offers being delivered in minutes at point of sale.

This to me sounds like sour grapes because we are so far ahead of BM and the rest of the market with this technology, which also means that we have a while to go before we can assess what competitors will charge.

An extra charge for something that should be the customer’s by right – an instant mortgage offer – does not look sustainable. But if Tim is hinting that BM will be charging less, then that is certainly something we will take a look at so long as the systems in the hands of the intermediaries are truly comparable.

Jeff Knight, Director of marketing, GMAC

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