Best Advice Mortgage Network Services (BAMNS) and Loans.co.uk Limited (LCUK) were both fined following systems and procedure failings.
A statement by the regulator confirmed that BAMNS had been fined £7,000, following failings in its ability to recommend a particular mortgage contract. BAMNS also failed to keep adequate customer records.
Michael Lord, head of mortgages and credit unions in the small firms division of the FSA, confirmed the regulator was currently conducting studies into the quality of processes for giving advice. He said: “Firms must be able to demonstrate their reasons for recommending a particular mortgage contract and we take record-keeping failures very seriously. We expect firms to take any remedial steps identified from supervision visits and will discipline firms that do not respond adequately to supervisors’ concerns. In this case, BAMNS is required to appoint a skilled person to review a sample of past business to assess whether, behind the record-keeping failures, customers may have been recommended unsuitable mortgage contracts.”
The FSA fined LCUK for ‘Treating Customers Fairly’ breaches within its selling of payment protection insurance (PPI). The FSA indicated that the firm had failed to record the products suitability to the consumer, in addition to highlighting failings in the systems and controls procedures. LCUK was fined £455,000, with the regulator’s studies indicating over 14,000 customers were exposed to PPI risks by the firm.
Rachel Loynes, mortgage advisor at Carterbar Ltd, said: “The FSA does seem to be picking up on those not giving the right, or enough, advice. It’s better to be on the safe side and be over-compliant. I welcome the FSA getting tougher in the right places. This will help get rid of those who give the industry a bad name.”
