FSA fines three mortgage brokers

7
Jan/100

FSA fines three mortgage brokers

Three seperate mortgage broker firms have been fined a total of £37,100 by the Financial Services Authority (FSA) for inadequate sales procedures. Mohammad Rana, based in Marston in Oxford, registered as Countrywide Management Consultancy and trading as Property Compass, was fined £14,700. Peter Scott, based in Horsham, West Sussex, trading as the Mortgage House was fined £11,900 and Chariot Mortgage Services Limited, based in Sale in Cheshire, was fined £10,500. However, the FSA said that had the brokers not agreed to settle early, they would have not qualified for a 30 per cent discount. This would have meant that their fines would have been £21,000, £17,000 and £15,000 respectively.

The FSA found all three mortgage brokers failed to gather adequate customer information, including personal and financial information, to demonstrate the suitability of their advice.

Countrywide also failed to ensure appropriate arrangements were in place for the supervision and monitoring of its one adviser, according to the regulator.
The FSA also ruled Mortgage House’s Scott did not have a sufficiently clear understanding of the regulatory requirements imposed by the FSA aimed at ensuring he gave affordable and suitable advice.

Chariot failed to communicate information to its clients in a way that was clear, fair and not misleading in that it held itself out as sourcing contracts from the whole of the market which in practice was not the case, the regulator ruled.

All three mortgage brokers are now required to undertake reviews of past business to establish whether, behind the process failures, any customers received unsuitable advice, and to help put things right.

Jonathan Phelan, head of retail enforcement for the FSA, said: “It is deeply disappointing to find that mortgage brokers visited by the FSA are falling short of basic standards aimed at ensuring that they treat their customers fairly.

“We will continue to take disciplinary action against mortgage brokers who cannot demonstrate that the mortgage contracts they recommend are affordable.”

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