The FSA has withdrawn its approval for the compliance officer at an insurance firm after hundreds of customers were exposed to poor mortgage advice.
Irene Hall, who worked for PMSG Insurance Services, lacked the competence and capability to ensure the company complied with FSA regulations and met its TCF guidelines, the regulator says.
PMSG has also been fined £35,000 for the failings, in which the FSA says “at least 620” customers were exposed to the risk of being recommended mortgages that they could not afford or did not need.
Jonathan Phelan, FSA head of retail enforcement, says: “It is unacceptable that PMSG exposed customers to the risk of being recommended mortgages that they could not afford or did not need.
“All firms must gather sufficient information from their customers about their needs and must organise and control their business to ensure the advice they give is suitable and customers are treated fairly.”
The FSA says, in recommending mortgages, PMSG failed to take fully into account its customers' personal and financial circumstances, for example:
- customers were re-mortgaged in their existing properties without the firm being able to show they could afford the recommended deal;
- customers were advised to re-mortgage their properties while they were still subject to an early redemption charge which may have reduced any benefit of re-mortgaging;
- the firm did not seek to verify information provided by customers which was inconsistent with information provided by them at an earlier point in the sales process; and
- the firm failed to retain sufficient records of information about its customers to prove the suitability of the advice it gave them.
PMSG has agreed to review its customers’ files to establish whether there has been any detriment and will undertake a past business review to identify any unsuitable recommendations that may have been made to its customers.
The report will also identify whether any redress needs to be paid by PMSG to any of its customers.
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