Practical Exercise – Undisclosed Referral Fee

Scenario

A seller complains that a MyEstate employee strongly recommended a particular conveyancing company but did not explain that MyEstate would receive a fee for the introduction.

The seller states that they believed use of the conveyancer was compulsory and later discovered the referral arrangement from another customer.

Learner tasks

Learners must:

1. Identify the complaint points.
2. Draft a professional acknowledgement.
3. Identify the records that should be preserved.
4. Prepare an investigation plan.
5. Identify the possible outcomes and remedies.
6. Decide whether wider compliance checks are required.

Key complaint points

The investigation should consider whether:

• A referral fee existed.
• The commercial relationship was disclosed.
• The nature and amount of the benefit were explained.
• Disclosure occurred before the seller committed.
• The seller was told they could choose another provider.
• The employee applied pressure or conditional selling.
• MyEstate retained evidence of the disclosure.
• Other customers may have been affected.

Model acknowledgement

Dear [Customer Name],

Thank you for contacting MyEstate. We understand that your complaint concerns the recommendation of a conveyancing provider, the disclosure of MyEstate’s referral arrangement and whether you were given a genuine choice of provider.

We have recorded your complaint and will review the relevant correspondence, referral documentation and transaction records. We may contact you if we require further information.

[Name and position] will handle the investigation and expects to provide a response by [date]. We have enclosed a copy of MyEstate’s complaints procedure, which explains the process and available escalation stages.

Yours sincerely,
MyEstate

Suggested investigation plan

The complaint handler should:

• Obtain the employee’s account.
• Review emails, telephone notes and transaction records.
• Locate any disclosure document.
• Confirm the referral-fee amount and payment arrangements.
• Establish when the disclosure was provided.
• Check whether the customer confirmed receipt.
• Review scripts and staff instructions.
• Check similar transactions for a wider disclosure failure.
• Determine whether remedial training or customer contact is required.