Leybridge, a mortgage broker based in Bournemouth, has escaped a £24,000 fine for putting 425 customers at the risk of being mis-sold a mortgage.
The Financial Services Authority (FSA) regulates the mortgage industry in the UK. All mortgage advisors learn about the role of the FSA in their CeMAP training or when they study the CeMAP syllabus, and the area of regulation and compliance is of the utmost importance.
The FSA reviewed Leybridge as part of their thematic project, however, they have waived the £24,000 fine to that Leybridge could afford to compensate any disadvantaged customers.
Leybridge failed to keep sufficient records of their customers financial and personal information and was unable to demonstrate that their mortgage advice was suitable for their customers. The directors were not overseeing the documentation process regularly and adequately and their file checking system was inadequate.
FSA director of enforcement, Margaret Cole, said that Leybridge had to now ensure that those customers received a deal.
“Leybridge’s record keeping was so poor that they could not demonstrate that the sales of mortgages were suitable and had no way of proving to us that the firm was treating customers fairly. We would have imposed a fine of £24,000, but had we done this the firm would not have been able to afford properly to carry out a customer redress exercise…so we waived the fine on this occasion.”
The FSA is currently running a thematic project to investigate the quality of advice processes being run by mortgage brokers across the UK.