East Sussex County Council’s trading standards service says that the brokers claim to be able to get cheap commercial mortgages and verbally offer a low interest rate. However, when it comes to the crunch of the written contract the rate is much higher but the brokers still demand their fees.
One company – Gateway Finance.co.uk Ltd, which has its registered office in Crowborough, has had its advertisement withdrawn by ‘The Publican’ magazine after a string of complaints from pub landlords across the country. The company were allegedly failing to provide access to loans, at either the interest rates, or the amounts, that had been promised by its sales reps.
A look at their standard written contract shows that there was actually nothing in writing to specify the interest rate or the size of the loan. In effect, the company was simply stating that it would “endeavour to secure a source of finance”.
The company in question is now in a ‘corporate voluntary arrangement’, which is an insolvency process used to try to rescue a firm that has been unable to meet its debts.
Councillor Bob Tidy, Lead Member for Community Services, said: “When dealing with any sales rep, especially from a firm you haven’t dealt with or heard of before, always ensure that the key elements of what they are saying is included in their written contract.
“Trading standards regularly get complaints of this nature from people running small businesses, who realise too late that they have signed a written contract that bears little relation to the sales pitch they were given. This leads to real problems later when trying to prove what was actually agreed. The bottom line is if the contract fails to reflect what the sales person has been saying then don’t sign it”.
Notes to editors
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Reference:
05/320/MF
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