The regulator found that Thinc and two of its companies, Thinc Network Services and Thinc Assured Network, failed to have adequate risk management and compliance systems for sub-prime mortgage business throughout most of 2006 and 2007.
It says Thinc failed to take reasonable care to ensure it had records to prove that the advice it gave to customers in relation to sub-prime mortgages was suitable.
Between January 1, 2006 and September 30, 2007, the FSA found that Thinc and the two companies failed to obtain adequate financial information about some sub-prime mortgage customers before they were given advice, failed to demonstrate that those customers’ credit histories merited a sub-prime mortgage and failed to demonstrate why the mortgages recommended matched the customers’ circumstances.
FSA director of enforcement Margaret Cole says: “The level of fine shows that we are determined to impose higher fines for serious failings in the retail market. The firm’s failings were particularly serious because its conduct could have had an adverse effect on the customers concerned, many of whom were recorded as having adverse credit histories and/or were consolidating debts.
“The failings continued after a thematic visit to the firm by the FSA in February 2007 because the remedial action implemented by the firm was ineffective and the firm’s sales practices and compliance regime did not improve.”
Thinc Group chief executive John Simmonds says: “Mortgages have been under greater scrutiny and I do not think that being a broker is enough any more – you have to be an adviser. The FSA said that it would increase the level of fines and it has but we are a strong company and we will take it on the nose.”