CEO John Flavell says he has serious questions about the findings of the Choice investigation into mortgage brokers, calling it disappointing and inaccurate.
Consumer advocacy group, Choice conducted a “shadow shop” where it sent five homebuyers to three of the biggest mortgage broker businesses in Australia – Mortgage Choice, Aussie and AFG.
“Our sample was small, but we found few examples of good practice. Instead, our borrowers encountered pressure sales tactics, inappropriate advice, lack of commission disclosure and up-selling with little consideration of risk,” Choice said.
However, Flavell says these results lie in stark contrast to Mortgage Choice’s own investigation findings.
“The results of CHOICE’s broker shadow shop are disappointing and differ completely to our own research findings,” he said.
“Each year, we mystery shop our franchisees and check them against our compliance standards. According to our most recent mystery shopping exercise, Mortgage Choice continues to deliver an exceptional service as well as professional, trustworthy and compliant credit advice to all of our customers.”
When Mortgage Choice approached Choice about the investigation, the consumer advocacy group declined to provide any further details to the franchise, raising questions about the validity of the findings.
“I would seriously question the CHOICE report and its findings,” Flavell said.
“When we first heard about the report, we asked CHOICE if we could be provided with the names of our brokers who were mystery shopped but were declined. While we appreciate industry feedback, we believe all feedback needs to be transparent so that we have the ability to deal with it accordingly.
“The fact that CHOICE refused to be transparent with us makes us seriously question the validity and credibility of their investigation.”
The report suggested broking firms such as Mortgage Choice are driven by conflicts of interest and sales incentives to snare new customers, but Flavell says this could not be further from the truth.
“At Mortgage Choice, our brokers are paid the same rate of commission regardless of which home loan product their customer chooses. So to suggest our brokers are financially incentivised to recommend one product over another is wrong and misleading.”