The FSA has fined mortgage lender Cheshire Mortgage Corporation Limited £1.2m for failing to treat customers fairly and fined its chief executive and compliance director.
The regulator says Cheshire failed to treat its customers fairly in the sale of mortgages and in arrears handling from October 2004 to the end of 2009.
Cheshire chief executive Henry Moser has been fined £70,000 and agreed to step down from his role within six months.
Compliance director Andrew Lawton has been fined £13,500 and banned from holding a significant influence function.
The FSA also requires Cheshire to carry out a redress exercise that could see approximately £2m paid to around 2,000 affected customers.
FSA director of enforcement and financial crime Tracey McDermott says: “CMCL’s lacklustre approach to regulation, combined with very poor practices in collecting arrears, meant that some customers already worried about being able to pay back their mortgages were put under undue pressure and sometimes ended up paying more than they should.”
In a statement, Cheshire says: “Such issues pre-date a comprehensive review of the firm’s procedures and corporate governance standards.
“We sincerely apologise to any customers that may have been affected.”
Perception Finance managing director David Sheppard says: “This will not be the last of this type of story. A lot of other firms will be looking over their shoulder, especially if they targeted the sub-prime market.”