Loan cancellation fee not payable...

The Insurance and Financial Services Ombudsman has upheld a complaint against a financial advisor for charging a cancellation fee it had not brought to the client’s attention.

The contract contained a clause allowing the fee, if the loan was cancelled, to cover the cost of time spent preparing the loan application.

IFSO held that the client had not ticked the box in the contract to say they agreed to the fee and it was not brought to their attention, therefore it was not payable.

Also the fee would not be recoverable, even if they had ticked the box, because it did not reflect the time and costs actually invested.

The advisor was also in breach of the client’s privacy for posting about the loan on social media without the client’s consent.

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