Tuesday 11th July 2006
Mortgage broker John Charcol has released a study of questionable fees levied by lenders.
Their study found that lenders inflate Telegraphic Transfer fees by as much as 1,500 per cent.
Telegraphic Transfer fees are intended to cover the administration cost of the transfer of funds from the lender to the buyers solicitor and then on to the sellers solicitor.
The actual cost of this process is £3, the study found, but the average charge from the top ten UK lenders is £26. The combined over-charge for consumers is £23 million a year, it concludes.
Ray Boulger, senior technical manager at John Charcol, said that large users of electronic payments, such as mortgage lenders, can negotiate discounts of around 90 per cent – making the cost as low as the £3 used in the studys calculation.
"Telegraphic Transfer fees are just another antiquated way for lenders to make money out of consumers," he said.
"There is absolutely no excuse for overcharging by more than a thousand per cent!"
"Technology should cut costs, not increase them," Mr Boulger added.
The study was prompted by an announcement from the Financial Services Authority (FSA) that they are investigating mortgage exit fees.
The FSA announcement revealed that preliminary findings warranted further action and that they have given some lenders a month to produce justification for the current price of exit fees. 
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