On 12 April 2010, the FSA published the Final Notice it has issued to Kensington Mortgage Company Limited (Kensington), fining it £1,225,000 in relation to poor treatment of customers facing mortgage arrears.
The FSA found that, between January 2007 and October 2008, Kensington breached principles 3 (management and control) and 6 (customers’ interests) as well as certain rules in the Mortgage and Home Finance: Conduct of Business sourcebook (MCOB). In particular, Kensington:
- Failed to ensure that its staff had an adequate understanding of treating mortgage arrears customers fairly.
- Concentrated on short-term repayment of mortgage arrears rather than agreeing repayment arrangements based on customers’ individual circumstances.
- Applied specific charges to customer accounts that were unfair or excessive.
- Failed to organise and control its affairs responsibly and effectively.
- Focused on its mortgage book performance and profitability, rather than on treating customers fairly (TCF).
Kensington’s fine was discounted by £525,000 for early settlement. The FSA also took into account Kensington’s work to review and revise its TCF practices and to amend its terms of business in relation to charges.
In addition to the fine, Kensington has agreed to carry out a customer redress programme to provide redress to those customers who were charged excessive and unfair charges in respect of their mortgage account. The FSA estimates that the cost of redress for the relevant period could amount to £1.066 million.
Commenting on this Final Notice in an accompanying press release, Margaret Cole, FSA 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.”
Kensington participated in the FSA’s thematic work in connection with the mortgage effectiveness review which began in 2008. The FSA announced in June 2009 that, as a result of its findings, four firms had been referred to enforcement
http://www.fsa.gov.uk/pubs/final/kensington.pdf
http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/065.shtml
Loading...