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Mortgage firm fined over £1m for poor customer treatment

Published on 12 Apr 2010 under category: legal

A London mortgage firm will have to make reparations of around £1.066 million after failing several customers who were in arrears.

Industry watchdog The Financial Services Authority (FSA) has also fined the firm £1.225 million for its unacceptable treatment of its most vulnerable customers.

Among Kensington Mortgage Company Limited's failings were the creation of unsuitable short-term repayment plans for clients which threatened to make their situation worse and charging early repayment fees.

In addition, the firm had failed to act on warnings on an internal audit report from 2007, which found several critical weaknesses in the firm's arrears handling activities and its process for addressing operational problems.

It was also found that the company's management did not collate information on customer outcomes.

Margaret Cole, director of enforcement and financial crime, said: "Retail firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged."

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