Mortgage brokers banned for faulty advice

Date:Thursday 6th November 2008

The Financial Services Authority (FSA) has banned two mortgage brokers for poor-quality and ineffective advice.

Homeplan directors Edward Allen and Ronald Allen failed to ensure that their recommendations were relevant for their individual customers and did not set up controls to ensure that their advice was of a consistent quality, the FSA asserted.

In addition, the group is accused of failing to monitor its sales of mortgage contracts and could not produce adequate information about management.

"Both directors lacked the competence and capability needed to make sure their firm delivered good quality mortgage advice," said the FSA's head of retail enforcement, Jonathan Phelan.

Mr Phelan added that Homeplan's trading permission has been cancelled, as problems with the firm's system were first identified in 2006.

Meanwhile, the Metro reported that many mortgage lenders are not expected to pass along a potential interest rate cut predicted to be made by the Bank of England's Monetary Policy Committee this week.