Factoring brokers all claim to be independent and impartial but unfortunately that isn’t always the case. One high profile factoring company even claimed to be independent after they were taken over by a factoring company and it was only after complaints from other brokers that they changed the wording on their website from “independent” to “offering independent advice” which to the casual observer is the same thing. Nowhere on their website was it mentioned that they are owned by one of the factoring companies and only the keen eyed industry observer would notice that the registered office was changed to an address in Liverpool that might be familiar to some – but not the general public.
Another high profile broker carries out a lot of audit work for clients of one particular bank owned factoring company, earning large fees in the process. The quid quo pro for this arrangement is that they are the preferred factoring company for this broker’s leads.
Yet another well known factoring broker of many years standing is known throughout the industry for paying factoring company salesmen a retainer so that they name him as the introducer of business that came to them directly and in return they become his preferred factoring companies.
All in all there is sufficient cause for regulation of the factoring broking industry to be brought in but as this seems to be highly unlikely The Independent Factoring Brokers Association was set up to act as a stopgap with only truly independent and impartial factoring brokers being eligible for membership.