Huge fine for financial advisor
A firm of independent financial advisers, the Thinc Group, has been fined £900,000 for poor record-keeping when selling sub-prime mortgages.
The Financial Services Authority (FSA) said the company could not prove it had given good advice to its customers.
The regulator said this was a serious matter because customers might have taken on loans they could not afford.
Thinc sold £77m worth of sub-prime mortgages to 775 people between January 2006 and September 2007.
"The level of fine shows that we are determined to impose higher fines for serious failings," said Margaret Cole, director of enforcement.
"Poor record keeping is a serious failing even where, as in this case, the FSA has not determined that the firm mis-sold sub-prime mortgages and there have been few complaints."
Sub-prime mortgages refer to home loans given to people with poor or non-existent credit histories.
Failings
The FSA's enquiries found that staff at Thinc had failed to find out enough about the finances of their customers.
Also, the firm's paperwork could not show why the customers needed a sub-prime mortgage, why the particular deal they took was appropriate, or if the customers could afford to re-pay.
The FSA said that Thinc's failings were "particularly serious" as many of the customers had a poor credit history.
The problems continued even after a visit by the FSA early in 2007 because attempts to improve had failed and poor sales practices had continued.
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