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FSA fines three mortgage brokers

The FSA has fined three mortgage brokers for their inability to demonstrate that they had recommended affordable mortgage contracts that met their clients’ needs.

Mohammad Rana, registered as Countrywide Management Consultancy and trading as Property Compass, was fined £14,700 for failing to ensure that appropriate arrangements were in place for the supervision and monitoring of its adviser.

Peter Scott, trading as the Mortgage House, was fined £11,900 because the regulator found that he did not have a sufficiently clear understanding of the regulatory requirements imposed by the FSA.

Chariot Mortgage Services Limited was fined £10,500 because it failed to communicate information to its clients in a way that was clear, fair and not misleading. It held itself out as sourcing contracts from the whole of the market which in practice was not the case.

The FSA says all three brokers also failed to gather adequate customer information, including personal and financial information, to demonstrate the suitability of their advice.

The firms are required to undertake reviews of past business to establish whether, behind the process failures, any customers received unsuitable advice.

FSA Head of Retail Enforcement Jonathan Phelan says: “It is deeply disappointing to find that mortgage brokers visited by the FSA are falling short of basic standards aimed at ensuring that they treat their customers fairly. We will continue to take disciplinary action against mortgage brokers who cannot demonstrate that the mortgage contracts they recommend are affordable.

“Where we have concerns about the quality of the mortgage advice given, we will continue to require mortgage brokers to undertake reviews of past business, often at considerable cost to them, to identify and remedy any unsuitable advice.”

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