The 0.5% arrangement fee goes directly to the broker, in the past if a customer queried this IIB employees were not allowed to tell customers that the fee went directly to the broker they just had to say it was a standard charge or some other waffle.
Because it was on the signed loan offer theres nothing you can do about it now, unfortunately.....just dont use that broker again as the arrangement fee is charged at the brokers discretion!!!
Nowadays if the broker is charging the 0.5% arrangement fee through IIB, the loan offer will clearly state this in the special conditions of the loan offer (very back page) It will also tell you how much this will be on the front page of the loan offer. To be honest very few brokers charge it now because they have to say it goes to them.