A mortgage broker with a mainly sub-prime customer base has been fined £63,000 for failing to give suitable advice and for providing inaccurate details on mortgage charges.
Approved Financial Solutions (AFS), a Derbyshire-based mortgage brokerage, was found to have made numerous failings when investigated by the FSA.
During its investigation, the regulator says it identified a number of concerns about the firm, including a failure to include personal information from a fact-finding process on application forms.
The firm also had inadequate systems in place to monitor the quality of advice given, and could not demonstrate the suitability of mortgage contracts recommended in its client files.
Procurement fees were not accurately disclosed to customers, it adds, with the actual fee received by the firm being considerably higher than those disclosed to customers.
Also, a weak compliance regime meant many customers provided false income and employment information to support their applications.
Jonathan Phelan, head of retail enforcement at the FSA, says: “The firm’s customer base is largely sub-prime and many of them were seeking to re-mortgage to consolidate existing debts.
“Behind this poor compliance regime, we found that in all the sales files that we reviewed the customers had provided AFS with false income and employment information.”
The firm co-operated with the FSA and took steps to remedy the issues raised, and so its fine was reduced from an original £90,000 to £63,000.
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