Thinc hit with £900k sub-prime fine despite FSA warning

The FSA has fined Thinc Group £900,000 for failures when selling and advising on sub-prime mortgages.

The regulator has also revealed the firm continued to exhibit serious failings, even after the FSA had made a thematic visit and recommended remedial action.

Thinc Group and two of its group companies were fined a total of £900,000 for not having adequate risk management and compliance systems and failing to keep adequate records of advice given to customers when selling sub-prime mortgages.

The offences took place between 1 January 2006 and 30 September 2007 and include; failing to obtain financial information about customers, failing to demonstrate a customers credit history merited a sub-prime mortgage, and failing to demonstrate that affordability was considered when recommending mortgages to customers.

It was also revealed the FSA visited the firm in February 2007, but the firm failed to implement effective remedial action and did not improve its sales practices.

Margret Cole, director of enforcement at the FSA, says: “This case demonstrates the importance of firms being able to prove to themselves and to the FSA, through proper records, that they are treating their customers fairly by doing everything necessary to make sure that they get suitable advice.

“The level of fine shows that we are determined to impose higher fines for serious failings in the retail market and that poor record keeping is a serious failing even where, as in this case, the FSA has not determined that the firm mis-sold sub prime mortgages and there have been few complaints.”

Thinc group has implemented a compregensive remedial plan, with an independent third party review of its sub-prime business, and may re-train or dismiss sub-standard mortgage advisers, as well as overhauling its compliance processes.

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