FSA warns mortgage brokers to treat customers fairly

Date:Friday 17th October 2008

Mortgage brokers have been warned by the Financial Services Authority (FSA) to treat customers fairly or risk being fined.

Jonathan Phelan, head of retail enforcement at the FSA, spoke after mortgage broker Orchid Financial Limited was fined £34,500.

It was penalised for failing to give proper advice, meaning more than 900 customers could have been sold an unsuitable mortgage deal.

Mr Phelan said the penalty "sends out a clear message to brokers that their advice must be of good quality - otherwise there is a likelihood that they will not be treating customers fairly".

The FSA has also fined two mortgage firm directors £60,000.

William John Evans and Gary Howes did not check that their customers had given them accurate information, nor did they verify the affordability and suitability of the recommended mortgage deals.

The two men agreed to settle at an early stage and so received a fine discounted from the £42,800 they would each have had to pay otherwise.

The FSA would have fined the company £50,000 but Abbey Mortgages Limited could not afford it.

It has agreed to a past business review and to stop advising on or arranging self certified business mortgage contracts.