Two mortgage brokers have been banned by the FSA for putting their clients at risk of receiving an unsuitable mortgage.
However, the pair were let off a £30,000 fine because they would have suffered financial hardship if they were forced to pay-up.
Edward and Ronald Allen, directors of Tyne & Wear-based Homeplan, failed their customers on a number of occasions, according to the FSA.
During a visit as part of its ‘quality of advice’ review, the regulator found the brokers had not collected adequate customer information to justify mortgage recommendations.
They also failed to implement systems and controls to ensure clients received a good standard of mortgage advice and failed to properly record management information.
The regulator had previously noted problems at the firm in 2006, but the directors failed to implement the necessary changes to their business.
The pair would have faced a £30,000 fine in addition to their ban, but the FSA let them off due to their financial situation.
“The failings warranted a fine of £15,000 for each director but as they have provided verifiable evidence that they would suffer serious financial hardship if this financial penalty was imposed, we have issued a public censure instead,” says Jonathan Phelan, head of retail enforcement at the FSA.
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