Brokers fined £100,000 for failures

Two directors of a mortgage brokerage have been fined a total of £60,000 for failures in self-cert mortgage sales, which could have led to fraud.

A third broker has been fined £34,500 for exposing over 900 customers to the risk of being sold an unsuitable mortgage

The FSA has fined William John Evans and Gary Howes £30,000 each for various failings at their business, Abbey Mortgage Limited.

The pair were found to have made a number of errors in relation to self-certified mortgages between June 2006 and June 2007.

They failed to check whether customers had provided accurate income information, nor did they ensure the mortgages recommended were affordable or suitable for their customers.

Failure to properly check income information could have led to the firm becoming a target for mortgage fraudsters.

Abbey Mortgages Limited would also have faced a £50,000 fine but could not afford it and has been publicly censured instead. The firm will also conduct a past business review and has agreed to no longer advise on or arrange any self-cert mortgages in the future.

Georgina Philippou, head of retail enforcement at the FSA, says: “Obtaining and clearly recording the right information from customers is not just about process but is an important step in preventing financial crime and giving customers the right advice and treating them fairly.

A second firm, Doncaster-based Orchid Financial Limited, reicved a £34,500 fine for failing to give customers suitable advice.

Orchid made a catalogue of errors, including poor information gathering, insufficient records and poor supervision of advisers.

The FSA says Orchid's fine was mitigated by its efforts to reform its business and an ongoing review of client files.

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