As more intermediaries try to promote themselves, an increasing number are choosing to advertise in a way that is potentially misleading.
In particular, some packagers are using advertising that misleads others into believing that they are lenders.
Bridging Finance expert and AOBP Chairman, Sidney Cohen, said: “The other day I received an advertisement via the web for a new bridging loan lender, so without wasting a moment I phoned them to ask them to email their terms to me.
“I was told it all depends on which lender they forward the application to... obviously this was a packager, and not a lender as their advert implied.”
The fact that an industry expert could be misled by an advert means we are all at risk.
Packagers themselves report being misled by the advertising of other master brokers, and into wasting time making calls to the companies.
Craig Scott, Director of Commercial 1 Limited, an established packager, said: “There is nothing more infuriating than misleading advertising, as it wastes both time and resources.
“There has recently been an increase in the number of misleading adverts, which is most probably due to more lenders forming exclusive relationships with packagers.”
“The packager may then present the exclusive products as if they were being funded through their own line, rather than through the lender’s funding line.”
Commercial 1 has not boycotted the idea of exclusive lender-packager relationships, but unlike some companies, Craig Scott explained that they ensure that they make their services and position in the chain clear.
James Bloom, CEO of Regentsmead, said: “If you are told you are dealing with a lender, ask to see the offer letter and other supporting documentation early on in the transaction, if you are still unsure ask to see the ‘lenders’ standard Legal Charge as that will tell you for sure who the lender is.
“There are very few actual lenders in the market and it is essential you do not waste time dealing with a company who you think is a lender but who is a packager. Ask the right questions early enough in the transaction to find out whether you are dealing with a lender, or not!”
Katie-Jill Rowland
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