The mortgage broker has been fined £10,500 for poor financial promotions, inadequate sales processes, and inappropriate systems and controls to manage its business.
In its review of financial advertising in 2006, the FSA found that Select had issued unclear financial promotions and had weaknesses in its management systems in relation to the sale of mortgage products. This applied to the sale of mortgage products in general and not just the non-conforming market.
The FSA found that Select’s capital repayment plan was not accurately described and customers did not receive reliable information to help them make informed choices and achieve a fair deal. The regulator also found that it had inadequate sales processes in place for the recommendation of mortgages and did not have appropriate management systems and controls in place to ensure that the firm met the necessary regulatory requirements.
Margaret Cole, director of enforcement at the FSA, said: “Poor practice by firms in this area poses a high risk to consumers – and this is particularly the case when it comes to non-conforming mortgages, given the vulnerable nature of the target audience.
“It is essential that firms’ financial promotions are clear, fair and not misleading, so that consumers know exactly what they are buying. In addition, firms need to have the right sales processes in place so that they recommend suitable mortgages.”
Andy Pratt, chief operating officer at Alexander Hall, said: “It’s a very difficult area, as advertising can range from adverts in a newspaper to websites, so it is a grey area. As the rules have been changed and regulations are lighter there is more chance of irregularities.”
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