This page explains how you can take action if you’ve changed your mind about an agreement with a credit broker, or the credit broker hasn’t kept to the rules.
Your rights when you use a credit broker
When you use the services of a credit broker, you have certain rights, including the following:
the credit broker can only charge you a fee if it’s been explained in writing and you’ve agreed to it in writing
the credit broker has made it absolutely clear that they’re acting as a credit broker and not a direct lender
you have a 14-day cooling off period, during which you can change your mind and get your money back.
These rules don’t apply to credit that is secured on land.
Changed your mind about agreement with a credit broker
If you change your mind about an agreement you made with a credit broker online or over the phone, you can cancel the agreement at any time within the first 14 days. You have the right to a refund of the money you’ve paid.
Contact the credit broker to tell them you want to cancel the agreement and get your money back.
The law giving you this right is the Financial Services (Distance Marketing) Regulations 2004. The credit broker should give you a full refund within 30 days. If they don’t do this, you can complain to the Financial Ombudsman Service.
Credit broker has taken fees you didn't agree or misled you
If a credit broker takes fees without following the rules, refuses to give your money back or doesn’t make it clear to you that they’re a credit broker, you may have the following options for getting your money back or complaining:
complain directly to the credit broker
report the broker to the Financial Ombudsman Service
see if your bank will help you get your money back.
Complain directly to the credit broker
If a credit broker has taken fees you didn’t agree to or has broken the rules in some other way, you can complain directly to them.
In your complaint you should point out that the credit broker has broken rules set out by the Financial Conduct Authority (FCA).
You may also be able to argue that you’re covered by Section 155 of the Consumer Credit Act 1974. This limits a credit broker's charges to £5 if, following an introduction to a lender, an agreement is not signed within six months. If you have already paid more than £5 in fees or charges but haven’t yet got an agreement for a loan, the credit broker must refund the amount above £5 if you ask them to.
Report the broker to the Financial Ombudsman Service
The FOS offers a consumer service that can contact the credit broker or bank on your behalf if you are having problems getting a refund. In most cases companies have refunded the money straightaway when the FOS has complained on a customer’s behalf.
See if your bank will help you get your money back
You may have another option for getting your money back, if you contact your bank. If you have had unauthorised deductions taken from your account, you may have a right to redress under the Payment Services Regulations 2009.
Financial Conduct Authority rules state that the bank must refund the unauthorised transaction immediately and remove any further bank charges, unless it has evidence that you did authorise the payment or were at fault.
The bank can’t simply say that because the broker used your details that you had authorised any payments.
Your bank should be willing to help you but if they don’t, you can complain using their internal complaints service first, to try and get a refund.
Getting the money back from your bank shouldn’t stop you complaining to the FOS as well.
As part of the registration process with a credit broker, you may also tick a box saying that you agree to your details being passed on to ‘carefully selected’ third parties.
If you haven’t agreed to this but are receiving phone calls, text messages, emails and other communications from a company you haven’t given your details to, your credit broker may have passed your details on without your agreement. Some people even find that these third parties start taking money from their debit card or bank account.
You can report your concern to The Information Commissioner's Office. You must do this within three months of becoming aware that there is a problem. If money has been taken, this is an unauthorised fee, so you can get your money back in the same way as if you’d been dealing with the credit broker directly.
Report a concern to the Information Commissioner's Office.
See also
FAQs
Legitimate credit brokers are authorised and regulated by the Financial Conduct Authority (FCA) and are listed on the Financial Services Register.
Can a broker help with bad credit? ›
A broker acts as an intermediary between borrowers and lenders. They help individuals with bad credit ratings find suitable loan options by connecting them with lenders who specialise in bad credit loans. Brokers use their expertise to navigate the loan application process and negotiate on behalf of the borrower.
Does consumer duty apply to brokers? ›
Consumer Duty ensures brokers and insurers always put customers' needs first to deliver good outcomes.
What is the difference between a credit broker and a lender? ›
Brokers provide access to multiple different loan products and help you shop around for the best deals to suit your needs, while lenders are the source of funding, determining their own criteria and terms.
How do I know if my broker is regulated? ›
Visit FINRA BrokerCheck or call FINRA at (800) 289-9999. Or, visit the SEC's Investment Adviser Public Disclosure (IAPD) website. Also, contact your state securities regulator. Check SEC Action Lookup tool for formal actions that the SEC has brought against individuals.
What is the difference between regulated and unregulated brokers? ›
Although unregulated brokers are common, they are by no means illegal. The main thing you stand to lose is your access to recourse. While regulated brokers are not guaranteed to treat you well, they are open to legal scrutiny if they break rules. A regulated Forex broker must, at the very least, follow regulations.
Is it better to use a broker or lender? ›
A bank may be a good place to start, especially for those who have a good relationship with their own financial institutions. For people who don't want the hassle of contacting different banks, mortgage brokers are a better option.
What is a good credit score for a broker? ›
Unlike personal credit scores, which range from 300 to 850, business credit scores are measured on a scale from 0 to 100, in which a higher number indicates better creditworthiness. For freight brokers, scores above 86 are considered excellent, signaling a low risk of delayed payments.
Can a broker fix my credit? ›
The best way a Realtor can help repair your credit is to connect you with a trusted Loan Officer. Mortgage Broker's and Loan Officers can do credit analyzation, and have programs that can provide consumers a road map for credit repair.
What is a broker liable for? ›
Any acts constituting fraud, misrepresentation, unauthorized trading, unsuitable trading, or deceit constitute a breach of the investor's trust and a violation of the broker's fiduciary duties.
The broker must always keep their client as well-informed about the situation, market, or any agreement as possible. Withholding information is not only an ethical breach but could also be a legal breach of contract.
Do brokers act as agents? ›
A broker is an insurance intermediary who represents the insured rather than the insurer. They assist consumers who are seeking coverage. Unlike independent agents, brokers are not the legal representatives of insurers. This means they often do not have the right to act on behalf of insurers, such as to bind coverage.
What is a credit broker responsible for? ›
As credit brokers are also distributors of financial products that are designed by lenders, they also have responsibilities to maintain, operate and review product distribution arrangements for the products they distribute (and may have more comprehensive responsibilities under the Duty).
How does broker get paid? ›
When a broker puts a borrower in touch with a bank, and the borrower's mortgage application is approved, the bank will pay the broker a commission. For as long as a borrower keeps their mortgage with a bank, the broker that arranged the loan will keep receiving a smaller ongoing commission, known as “trail” commission.
Is credit broking a regulated activity? ›
Yes, credit broking. Whilst the underlying loan agreement is exempt (being instalment credit within 12 instalments and no interest) the activity of credit broking is still a regulated activity. A consumer credit firm. for a hire purchase loan.
Are brokers regulated by the SEC? ›
Brokers and dealers, and their associated persons, must comply with all applicable requirements, including those of the U.S. Securities and Exchange Commission ("SEC" or "Commission"), as well as the requirements of any self-regulatory organizations to which the brokers and dealers belong, and not just those summarized ...
What broker is regulated? ›
FINRA Regulates Broker-Dealers, Capital Acquisition Brokers and Funding Portals. A Broker-Dealer is in the business of buying or selling securities on behalf of its customers or its own account or both. A Capital Acquisition Broker is a Broker-Dealer subject to a narrower rule book.
Who regulates credit institutions? ›
The FCA supervises all types of firms for conduct purposes. Firms supervised by the PRA for prudential purposes are also supervised by the FCA for conduct purposes.
Is a mortgage broker regulated? ›
The FCA is now responsible for the regulation of mortgage products and services. This means that every lender and mortgage intermediary must be authorised and regulated by the FCA to ensure they provide professional services.
