Lenders 'abusing their power over conveyancing'

Tuesday 24th January 2012

A law firm is claiming it has evidence that lenders – both banks and mutuals – are misleading their mortgage clients over conveyancing.

Peter Ambrose, of The Partnership, said he knows of one client who has complained to the financial ombudsman as a result.

He said that lenders had recently started to dictate clients’ choice of conveyancers by setting up panels of authorised firms.

Ambrose said he can prove that clients are being penalised. In one case, a bank misled a client over costs; in another, a client was forced to use an expensive London solicitor; and in a third, a nationalised lender refused to discuss its charges.

Ambrose said he was extremely concerned.

“Our evidence shows that lenders are abusing their position to the detriment of their clients.

“After approving a mortgage, a bank tried to allocate a conveyancer directly to one of our own clients. When our client explained that he already had a solicitor, he was told this fee would apply anyway.

“As the correct figure was £160, it suggests that the bank was quoting the full conveyancing fee in what appears to be an attempt to encourage our client to use their chosen provider.”

Ambrose went on: “We had been acting for a lender with their authority, but two days before exchange, they withdrew this authority and told our client to either use another law firm for the entire transaction, or to use one of their chosen firms to represent them for a fee of nearly £1,000.

“Given the time pressure, our client had no choice but to use the firm that was representing the lender, resulting in a doubling of their fees.

“Given the much publicised pressure on banks to act fairly, we are disappointed that some do not appear to be acting in the best interests of their clients.

“It is particularly galling when a client must revert to the financial ombudsman because a nationalised firm refuses to disclose the fees that their chosen law firm will be charging.

“This abuse of power must be stopped.”