Referral Fees – last chance to give your views!
Tom Littler, BSc FRICS of Isherwoods Chartered Surveyors and ISVA Council Member, reports:
“Please see the Negotiator article below with link to Trading Standards consultation on Referral Fees.
I have completed the exercise by commenting that referral fees should be banned as they are not in the consumer interest as the referral fee must surely be concealed somewhere in the final retail price, and referral is made primarily upon the basis of cash reward rather than solely on merit (proven competence and good business practice of the party receiving the referral). Members are invited to complete the survey themselves”
Trading Standards and the Ombudsman have given the industry seven days to tell them which direction they think future regulations may travel.
Estate agents are being given a last chance to give their side of the referral fees story by the industry’s two key regulators, who have it in their power to recommend that referral fees are banned later this year.
The National Trading Standards Estate and Letting Agency Team (NTSELAT) and The Property Ombudsman (TPO) are asking agents to fill in an online form which must be completed by next Monday the 17th February.
The short survey gives an indication of the options facing both regulators and the government, including making estate agents simply tell consumers if they are earning a fee; revealing how much their fee earned is as well as its existence, or banning all fees outright.
In March last year NTSELAT issued guidance that warned agent they may face prosecution if they don’t make it clear to clients that they are earning a commission or fee from referring business to a third party service or product provider.
And in May last year TPO updated its Codes of Practice to require member agents to reveal referral fees.
“It’s been just over a year since we launched our industry guidance on transparency of referral fees during the home buying and selling process,” says James Munro head of NTSELAT.
“We’ve been monitoring compliance with the guidance during this period but are keen to hear feedback directly from estate agents themselves. “This will inform our understanding around compliance and identify how effectively the guidance helps protect consumers.”
Property Ombudsman, Katrine Sporle, says:“The industry is very much aware that the Government is concerned about transparency and wants consumers to be able to make informed choices.
“The results of this survey will provide an indication of how agents have adapted their procedures since the previous survey and, importantly, following the release of NTSELAT’s referral fee guidance”.