The FSA has fined a mortgage broker £10,500 for offering unsuitable mortgages to consumers.
The regulator says the Cheshire-based firm, Chariot Mortgage Services, breached principles seven and nine of its Principles for Businesses, as well as rules in chapter four of its MCOB handbook, between October 2004 and October last year.
The FSA says the fine was based on two areas. Firstly, it says Chariot failed to obtain from customers, and make records of, sufficient information to demonstrate the suitability of its advice, and of the customer's personal and financial circumstances.
Secondly, it says Chariot recommended mortgage contracts "which appeared not to take into account customers' stated needs and circumstances".
For example, the FSA says Chariot recommended interest-only mortgages to customers who, according to Chariot's files, had indictaed that certainty of their mortgages being re-paid in full at the end of the term was a key consideration.
In addition, the firm also failed to communicate "clearly and fairly and in a way that was not misleading" and did not source mortgages from the whole of the market, despite claiming to do so.
Chariot agreed to settle at an early stage and its original £15,000 fine was reduced by the standard 30% to £10,500 as a result.
The FSA says a past business review of the firm, at Chariot’s expense, would take place with a view to identifying any unsuitable recommendations "with redress to customers where appropriate".
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