View more on these topics

FSA bans mortgage and insurance broker

The FSA has banned Aaron Nickols, trading as Warwick Finance, for failing to treat customers fairly and encouraging staff to use high-pressure sales techniques.  

The regulator says staff at the firm, which has 10 branches nationwide, obtained direct debit details from potential customers and set up insurance policies in their name without permission.

The company also used high-pressure tactics including unsolicited phone calls to the public, falsely claiming to represent well-known high street financial service providers and questioning the stability of customers’ existing policy providers.

Nickols failed to have appropriate systems and controls in place, meaning that staff were not monitored appropriately, customers’ specific needs were not taken into account and training for staff was inadequate.

The FSA says Warwick Finance was operating as a non-advised mortgage broker, but staff failed to explain the distinction between advised and non-advised sales to customers.

The FSA adds: “Further, your staff often did provide advice, for example by comparing the customer’s present mortgage with the mortgage they were seeking to sell to the customer and criticising the suitability of customers’ existing products.

“Your staff advised customers that the product they were recommending was better than their existing product, despite the fact that swapping to the new product would often entail incurring an early repayment charge and would often result in the monthly repayments being higher than the existing payments being made by the customer.”

The regulator says staff made mortgage recommendations without obtaining customer information such as client income and expenditure.

It adds that during its investigation Nickols failed to deal honestly with the regulator by making incorrect statements and not making the improvements he had promised to make to improve the firm’s treatment of customers.

FSA head of retail enforcement Tom Spender says: “By failing to treat his customers fairly, lacking the essential systems and controls to meet the FSA’s minimum regulatory requirements, and having an inappropriate attitude to the remedial action we outlined, Nickols poses a genuine risk to his customers and the financial system.

“High pressure sales techniques and subterfuge have no place in a market that relies on honesty and integrity.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Better late than never I suppose. Many more out there….you just need to know where to look.

  2. Elizabeth D'Costa 7th December 2009 at 12:01 pm

    Just look in the Mail on Sunday – they are the fountain of all knowledge with all things to do with regulation and financial services. I think they should take over from the FSA when the conservatives come to power, they are far more effective. I don’t recall that the journalist has ever been regulated but I look forward to the hearing about his level 4 result when RDR comes in!

  3. Good old Anglo-Saxon name in case any of the usual bigots had not spotted it

Leave a comment