Recommendation - 21 September 2017
Key Issues: Mortgage | Mortgage broker | Responsible lending | Failure to act with due care and skill | Misappropriation of funds | Fraud and failure to disclose a conflict of interest
The FSP provided credit assistance to the consumer to enter into a mortgage.
- The consumer claimed the FSP breached its responsible lending obligations and failed to act with due care and skill.
- The consumer also claimed that the FSP fraudulently signed loan documentation, was involved in the misappropriation of part of the settlement funds and failed to disclose its brokers conflict of interest..
- We found that the consumer's claims that the FSP breach its responsible lending obligations and failed to act with due care and skill were made out.
- We found that on the balance of probabilities, the signature on the loan application was not the consumer’s signature. However, we did not have sufficient information to make a finding as to who signed the application.
- We found that the FSP did not disclose to the consumer the potential conflict of interest. However, no loss resulted from this non-disclosure.
- The claim that the broker was involved in the misappropriation of funds, has not been established.
- We recommended that the FSP pay to the consumer all upfront fees and trail commissions that it received as a result of providing the credit assistance to the consumer.