Mortgage lender hit by FSA fine

30/10/2009

A UK mortgage provider has been fined £2.8 million by the Financial Services Authority (FSA) for failing to treat its customers fairly.

GMAC-RFC was found to have charged excessive fees to customers, offered inadequate advice and began repossession proceedings before exploring alternatives.

Repayment plans offered by the firm to struggling borrowers were also found to be defective.

The FSA demanded that the firm pay £7.7 million in redress to customers affected by its poor treatment, as well as levying the fine.

Margaret Cole, director of enforcement and financial crime at the regulator, said: "This case shows credible deterrence in action."

Earlier this month, the FSA pledged that it would become more "intrusive" in its regulation of the mortgage market, as the economic downturn and credit crunch have led to increasing difficulties among consumers with making mortgage repayments and rising repossessions.

Among the measures planned by the regulator are an outright ban on self-certification mortgages and restrictions on arrears charges.

Tags; Housing Debt and Bills, Young Family Finances,

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