jack coombs

The trouble with transparency

How many lenders can put their hands on their contracts and state that their formal agreement offers true, easy-to-understand transparency? I would imagine all would say they operate a policy of openness and honesty.

Now ask how many brokers and their clients would agree? The answer is entirely different, a quick search on Google brings back good feedback, but this is far outweighed by bad experiences.

The majority of these naturally relate to cases where the borrower finds themselves in trouble, and in most cases will say they were not made aware of the charges at the outset.

We operate in a market where a customer can be charged 5% on a day-one default, and this will largely have been missed because too many lenders provide basic quotes that miss a number of fees.

This is not transparency. These are not practices that should be associated with the bridging sector.

Unmistakably unambiguous

Transparency is about laying out the fees and charges within the quotes clearly and comprehensively. It is about ensuring at each stage of the process the customer understands the offer and what is expected of them.

Taking a treating customers fairly (TCF) approach and considering the customer is not only about being fair with people, it is also the right way to conduct business by upholding our end of the deal.

Communication is the key.

Fully costed quotes outlining what is being charged with accurate third-party fees should be the norm.

A commitment to maintain the relationship through the term of the deal allows lender, broker and borrower to immediately address any issues should they arise. This constructive relationship should avoid higher levels of interest or charges.

There has to be a duty of care to propose longer terms with the opportunity to exit without incurring a large fine. This also creates breathing space for any unforeseen issues.

Do the right thing

I don’t claim that any of this is rocket science, but in an unregulated industry we must all be held responsible for our practices and do our utmost to protect the client.

Those who do not follow best practice should be held to account.

Transparency is not marketing slang. It is not corporate bluster. It’s not the easy way to pitch your business in a media interview. 

It is a commitment to honesty.

Let us reclaim its correct usage and start delivering on its true meaning.

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