“Time and time again, we are witnessing organisations like the Thinc Group instigating bad practice in the sub prime lending arena,” said John Whittaker, chief executive of the LoanCheck Foundation. “As a social enterprise that is campaigning on behalf of the consumer, I would like to know what the FSA is doing to stop this happening, further more what recompense the client has for a product that is potentially wrong for them. Token fines will make no difference to these huge financial institutions. For organisations like the Thinc Group this fine is a drop in the ocean in comparison to what they are cheating out of many consumers,” he added.
The FSA investigations into the Thinc Group discovered inadequate compliance systems as well as a lack of evidence that customers had been given suitable sub-prime advice. Between January 1 2006 and September 30 2007, the FSA found Thinc was unable to show that customers' credit histories warranted sub-prime mortgages. The firm was also unable to prove it had considered affordability when selling adverse deals. Some clients were also provided with reasons why letters that did not match the products they'd taken out.
“My worry is that not only has consumer been cheated by the lender, but there will be other repercussions for the consumer as this could lead to poor credit scoring and not being able to find access to any finances in the near future due to no fault of their own,” said Whittaker.
