Non-advised firm fined for bridging loan failures
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The FSA has fined non-advised mortgage firm Fastmoney £28,000 for failing to ensure customers understood the terms and costs of mortgages and bridging loans.
The firm’s owner and director Simon Latham and its former chief executive Stuart Mason have been banned from performing significant influence functions. Latham has also been fined £17,500.
Fastmoney arranged 370 regulated mortgage contracts and 18 regulated bridging loans on a non-advised basis between August 2005 and March 2010.
It targeted customers who were unlikely to qualify for prime mortgages. In some cases, customers needed a loan urgently to avoid repossession.
The FSA says some mortgages were arranged for customers without them being given initial disclosure documents or key facts illustrations. In the majority of cases, Fastmoney’s sales representatives only offered customers one mortgage from one lender. Fastmoney also failed to adequately disclose costs to customers, particularly the costs of additional broker fees.
Bridging loan sales scripts did not include necessary questions about whether the loans were suitable for the customer.
Field representatives who conducted sales at customers’ homes and provided mortgage applications to sign were almost entirely unmonitored.
Owner Simon Latham delegated various senior management responsibilities to Stuart Mason, who held no financial services qualifications.
Fastmoney has been ordered to appoint a skilled person to carry out a past business review, which is still ongoing. The company will be required to pay redress if appropriate.
The final notice against Fastmoney says: “Fastmoney has agreed to complete the skilled person’s report but has stated it is minded to challenge the findings as it believes that not all of the points it has raised have been properly considered.”
Chartwell Funding managing director Robert Winfield says: “The FSA should do away non-advised mortgage sales. We are talking about people’s biggest financial commitment here, they should all be advised.”
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