The FSA has also banned Joseph Cummings, and taken action to prevent three other directors at the firm from being able to operate in senior positions within the financial services industry.
This is the first case of its kind by the FSA against a mortgage lender’s senior management concerning irresponsible lending and unfair practices in respect of dealing with customers in arrears.
Bridging Loans has agreed not to conduct new FSA regulated mortgage business and the FSA has taken action to ensure that it cannot repossess or sell the homes of any its FSA regulated mortgage customers.
Bridging Loans has also agreed to provide redress to customers who have been adversely affected by its misconduct.
The FSA regards the failings as particularly serious as they impacted on customers who were financing or re-financing their home, some of whom already had impaired credit histories.
Cummings has been fined and banned for a number of failings. While in charge of Bridging Loans he failed to act with integrity by knowingly misleading a customer, and assessed customers’ complaints based on his perception of their character, without properly reviewing their circumstances, branding some customers as “evil”.
As an approved person, Cummings also failed to act appropriately when dealing with customers entering mortgage contracts or when handling customers’ complaints and subsequently, in his treatment of customers in arrears. For example, he:
• failed to lend responsibly, leading to a risk that customers would enter into contracts they could not afford;
• failed to ensure charges and interest were attributed accurately and fairly to customers’ accounts, with charges allocated inconsistently and with some customers paying excessive charges; and
• tried to deter customers from complaining or seeking redress by, for example, threatening to charge a customer for time spent dealing with their account when they complained to the ombudsman or refusing to deal with a customer unless they withdrew their complaint to the ombudsman.
Cummings also acted recklessly by failing to properly assess a third party underwriter who acted as a customer facing broker and was the sole source of information upon which the firm assessed 63 FSA regulated loan applications. Given the underwriter financially gained from each loan, this created a conflict of interest.
Cummings refused to co operate with the FSA during the course of the investigation, including denying the FSA access to Bridging Loans’ office.
Other directors at Bridging Loans have also been subject to action by the FSA as a result of its investigation.
Joseph Cummings also had a number of family members appointed to the firm. Miriam Cummings has been banned from performing any controlled function at a firm, while Laura Cummings and Susan Cummings have been banned from undertaking any significant influence function at a financial services firm in the future.
All three became approved persons holding significant influence functions at Bridging Loans when in reality they had had no meaningful involvement in the business, resulting in customers being lent to irresponsibly and the unfair treatment of customers in arrears.
Margaret Cole, the FSA’s director of enforcement and financial crime, said: “Joseph Cummings showed total disregard for the interests of Bridging Loans’ customers, basing his decisions and subsequent treatment of a customer on whether or not he liked or trusted them, rather than on any proper assessment of their circumstances.
“This sort of behaviour towards customers cannot be tolerated and the FSA will continue to take action where necessary against firms that fail to have the proper systems and controls in place to ensure customers are being treated fairly.”
