The FSA has fined Essex sub-prime mortgage lender Swift 1st Limited £630,000 for treating some customers facing mortgage arrears unfairly.
The FSA says Swift has agreed to provide redress to customers in arrears who were charged “excessive” arrears fees and charges. It is estimated that the total cost of the redress will be about £2.35m.
The FSA says it has identified a number of serious failings by Swift, which occurred between June 2007 and July 2009, in relation to its arrears fees and charges and its dealings with customers in arrears.
The regulator says Swift applied excessive charges to its customers’ accounts that were in arrears, including a monthly arrears management fee, a default notice fee, an unpaid mortgage payment fee and litigation fees.
Swift also applied excessive early repayment charges to the redemption figures of customers who were, or had been, in arrears.
The firm failed to send all its customers in arrears certain prescribed documents providing information on the options available to them and failed to have systems and controls in place to deal with early redemptions, which resulted in some customers who redeemed their mortgages overpaying.
The FSA says Swift’s failings affected about 2,500 customers.
Swift agreed to settle at an early stage and therefore qualified for a 30 per cent reduction in penalty.
Swift is the fifth lender to be fined by the FSA since October 2009 for the unfair treatment of customers in arrears. The regulator has also fined GMAC-RFC, Kensington Mortgages, Redstone Mortgages Limited and DB Mortgages.
Emba group sales and marketing director Mike Fitzgerald says: “It is only right that lenders are reminded from time to time that they are expected to treat their customers fairly.”