Mohammad Rana, registered as Countrywide Management Consultancy and trading as Property Compass, has been fined 14,700 for failing to ensure that appropriate arrangements were in place for the supervision and monitoring of the firm’s sole 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 has been fined 10,500 for purporting to be whole of market, which was not actually 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.
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.”
The FSA has also publicly censured Mortgageland Limited for poor financial promotions, inadequate sales processes and record-keeping failings.
The regulator found that London-based Mortgageland failed to give sufficient prominence to the annual percentage rate in a mortgage promotion which was aimed at people with county court judgments, loan arrears or defaults.
In another promotion, it failed to indicate the level of fee that customers would be charged or set out that the fee included an amount to cover other fees which were paid by the firm on the customer’s behalf.
The regulator says, in addition, the firm failed to record appropriate details of customers’ needs and circumstances, including how customers planned to repay the mortgage and their income and expenditure details.
Director of enforcement Margaret Cole says: “Taking out a mortgage is one of the most important decisions that anyone makes during their life.
“Poor practice by firms in this area poses a high risk to consumers and this is particularly the case when it comes to sub-prime mortgages, given the vulnerable nature of the target audience.
“It is essential that firms’ financial promotions are clear, fair and not misleading, so that consumers know exactly what they are buying. And poor financial promotions often go hand in hand with other problems at firms. In this case, the firm also demonstrated poor record-keeping, both in terms of assessing suitability and documenting the recommendations made.”