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FSA censures first broker in thematic review

The FSA has issued the first of several censures against mortgage brokers for failing to adhere to its quality of mortgage advice processes.

The regulator censured Bournemouth mortgage broker Leybridge last week for not offering suitable advice and exposing 425 customers to the risk of being missold a mortgage.

The FSA says this is the first case to come out of its thematic review of mortgage advice, a study of 50 advisers which began in early 2008.

It says more firms can expect to be fined or censured in the near future.

Leybridge was unable to pay the proposed fine of £24,000, so the FSA waived the fine to ensure that it could afford to compensate customers.

The FSA says the broker failed to ensure that it made and retained adequate records of its customers’ personal and financial information, especially during the application and approval processes for self-certifi- cated mortgages. It also found that the broker had been negligent towards clients who were exposed to the risk of being unable to afford mortgage repayments during retirement.

Director of enforcement Margaret Cole says: “Leybridge’s record keeping was so poor that it could not demonstrate that the sales of mortgages were suitable and had no way of proving to us that the firm was treating its customers fairly.”

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