The FSA has fined mortgage broker, Hadenglen Home Finance Plc, and its chief executive for having inadequate systems and controls when recommending re-mortgages and PPI to customers.
The FSA has issued a £133,000 fine against the firm, while Hadenglen’s chief executive, Richard Hayes, was personally fined £49,000.
It is the second fine issued against a mortgage broker this week, after Select Mortgage Services received a £10,500 fine for inappropriate business controls.
The FSA says it discovered the failings as part of its second phase of PPI work in May 2006.
The regulator found that around 2,000 re-mortgage and 1,900 PPI products were exposed to the unacceptably high risk of being sold a product which was not suitable.
The FSA says Hayes was responsible for the firm’s business practices and implemented a sales strategy without regard to the risk customers faced from early redemption charges.
Commenting on the fine, Margaret Cole, FSA director of enforcement, says: “The penalty imposed on Mr Hayes should leave senior management within firms in no doubt that the FSA will hold them to account if they fail to treat their customers fairly.”
According to the FSA, Hadenglen has implemented a remedial action plan and will be contacting customers for redress where appropriate. The FSA says that without such action, the fines would be much higher.
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