Consumer Action Law Centre takes aim at brokers

A leading solicitor has rubbished claims about broker fees by the Consumer Action Law Centre

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The Consumer Action Law Centre (CALC) has told News Ltd that the use of clawback fees is “certainly another reason not to use a mortgage broker”. 

This sweeping statement has come after a Sydney couple are arguing against the need to pay a clawback fee to their mortgage broker after they refinanced their $940,000 home loan from St George to ANZ at the end of last year.

According to the News Ltd report, the Home Loans Expert broker is attempting to recover a clawback fee – which was clearly stated along with the circumstances in which it would be payable in the original contract. The Credit Ombudsmen Service (COSL) has already rubbished the couple’s complaint.

However, CALC chief executive Gerard Brody has told News Ltd: “If you get your home loan directly with the bank they can’t charge you these fees. We would also argue that clawback fees are potentially in breach of Australian Consumer Law in that they’re what are called ‘unfair contract terms’.”

Australian Broker spoke with Jon Denovan, a partner at Gadens law firm who said that CALC’s claim is “bullshit”.

“It doesn’t matter what brokers or lenders do, it does seem that the consumer law centre will say we are acting unfairly.

“I can’t imagine why the contract would be unjust. The one thing you can’t argue about in a contract is the price. For example, I can’t agree to buy a television set for $1,000 then go back and argue about the price and say I would only like to pay $500 for it. I could argue if the contract had a clause which said I couldn’t turn the television on, because that is an unfair term. But I can’t argue about the price, which is what is going on here.

“The customer can’t agree to enter a contract with the broker and then expect not to pay. Customers always have a right to back a claim, but it doesn’t seem to be fair that these people have decided that they are going to use this broker’s services and not pay for it when the conditions were clearly stipulated in the contract.”

 

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