Bransgroves Lawyers has filed a submission with the ACCC opposing the merger between the two largest aggregators.
The reason for our objection is we perceive illegal cartel behaviour operating within the mortgage aggregation industry and submit that the merger of the two largest operators to create one aggregator, which represents more than half of all mortgage brokers in Australia, will only exacerbate this situation.
It is our contention that there is a convention within the industry, adopted by aggregators, that if a broker wishes to change aggregators the broker requires a letter from their existing aggregator that includes the expression no adverse conduct. This is known within the industry as a clean separation letter.
We regard it as uncontroversial that in practice the effect of a refusal to provide a clean separation letter is that the broker is excluded from the industry for life.
We have obtained senior counsel’s advice (Marcus Young SC dated 30 October 2019) which opines that the conduct is illegal cartel behaviour subject to being able to establish that the shadow discipline system is not just a coded messaging system, but that there is an understanding that the aggregators will honour each other’s decisions to expel brokers from the industry. We contend that such evidence exists.
Click here to see our letter.