The fine was imposed after the lender was found to have imposed unfair charges and fees onto the accounts of customers, and was found guilty of failing to treat its customers fairly.

The company was found to have secured over £7.5 million pounds from around 46,000 mortgage customers as a result of its unfair fees and charges. The FSA found that the lender had impos4ed the charges on the accounts of a number of customers that were experiencing difficulties with making repayments on mortgages between 2004 and 2008.

An official from the FSA said: ‘This case shows credible deterrence in action. It is an excellent example of what the FSA’s more intrusive approach can achieve for consumers, and it reflects what we said in our Mortgage Market Review last week about unfair mortgage arrears charges. Mortgage lenders and third party administrators should read this final notice and the Mortgage Market Review and take action in the interests of their customers.’

An official from the company said: ‘We want to apologise to customers affected. We have worked openly with the FSA to review and revise our procedures for managing accounts in arrears. Whilst our arrears charges were in line with the market, in hindsight, we fully accept that for certain fees our estimates of the costs were not proportionate to the additional administration actually required. We will be writing to customers who incurred these specific charges when in arrears and will re-credit the charges plus interest.’

Unfair charges result in fine for GMAC-RFC is a post from: Glitec Loans

With the financial and economic climate in such a state consumers have needed the protection of the FSA more than ever before over the past couple of years, but a group of MPs has claimed that the agency has let consumers down and has failed to protect them from aggressive mortgage lenders in the ongoing difficult climate.

MPs on the Treasury Select Committee have accused the FSA of taking a far too leisurely approach to the soaring level of repossessions, and has stated that the agency has taken a lax approach when it comes to ensuring that consumers are being treated fairly by lenders, which has contributed to rising repossession levels.

The MPs said that at a time when so many homeowners were struggling with their finances many aggressive banks – including those which have been bailed out by taxpayers – have moved in and preyed on these people through actions such as charging extortionate fees and by taking repossession action.

Sub-prime lenders were identified as the worst offenders, and the MPs said that the FSA needed to step up to the mark and start protecting the public. One committee member said: “We suspect that the small number of cases being brought against lenders making excessive arrears charges are merely the tip of the  iceberg. This is why it is so important that lenders  are compelled to open up their books and justify their charges, while the FSA must be  prepared to take decisive action where it finds evidence of wrongdoing.”

He added that the committee was very concerned about what was going on, and about the lack of action that was being taken by authorities, and said: “The FSA and the OFT must get a grip on this problem and crack down on lenders who are breaking the rules and mistreating customers in arrears.”

He also said that in 2007 the FSA had indentified that fact that some banks were treating consumers unfairly with regards to mortgage arrears, but two years later the agency had taken action against just four such firms, indicated a very lax approach to the problem.

He stated: “The seemingly leisurely approach of the FSA in terms of completing its mortgage arrears review and enforcing possible breaches in the rules in the area of mortgage arrears is a matter of grave concern. We call upon the FSA to spell out clearly how it will improve its performance in terms of bringing miscreant firms to book.”

However, the FSA has naturally denied these claims and has said that it needs to look more closely at the situation before making any regulatory changes, with one spokesperson stating: “We take a robust position with firms as soon as we have evidence of wrongdoing and also to ensure borrowers are treated fairly throughout the lifetime of their mortgage.”

However, a committee member said: “It is clear the behaviour of some mortgage lenders towards vulnerable homeowners has been completely unacceptable – yet the FSA has failed to intervene effectively.”

Is the FSA failing to protect homeowners from lenders? is a post from: Glitec Loans

The regulator has recently banned one mortgage broker and handed down a hefty fine for engaging in mortgage related fraud.

The London broker, Grace Nmadibechi Ada Ukala, has been banned from operating by the FSA and has been fined an enormous £70,000 for her part in the submission of misleading and false mortgage applications.

The broker was the director of Goldsparkle Consulting Services Limited and had been approved by the FSA. According to reports she submitted five mortgage applications for herself, but put in dishonest information about income and employment.

The broker was also found to have hidden information about the firm’s finances from HM Revenue and Customs. The fine could have been for much more, but as she opted to settle early it was reduced.

An FSA official said: “This fine, which would have been £100,000 had Ukala not settled early, is aimed at deterring approved persons from getting involved in mortgage fraud. Her earnings, as stated in the mortgage applications, were considerably higher than the income she declared to HMRC. By knowingly submitting false and misleading mortgage applications, Ukala acted in a totally unacceptable fashion.”

She added: “Our work on mortgage fraud continues as a priority in our campaign against financial crime. We have banned more than 60 mortgage brokers over the last three years and we will continue to ban such people to reinforce the message that knowingly giving false and misleading information is dishonest and poses a serious risk to prospective lenders. We will continue to ban individuals who demonstrate a lack of integrity.”

Broker banned and fined by regulator is a post from: Glitec Loans

The regulator has both fined and banned the broker after he was allegedly found to have been involved in the submission of false mortgage applications. The broker at the centre of the action was Abiola Agbalaya, and officials from the FSA said that the action taken against the broker was a deterrent against others getting involved in mortgage fraud, which has become more prevalent since the onset of the global credit crunch since when mortgage finance has become increasingly difficult to come by.

In the past two years the FSA has apparently banned over thirty brokers in a bid to try and reduce mortgage fraud. It is said that in the latest case the broker managed to obtain several mortgages having submit applications that overstated both his income and the profits that his company, Herald Finance Ltd, was making. A mortgage consultant working at Herald, Grace Olatunji, was also banned for the submission of applications that contained false income details.

The FSA has already made it clear over the past year or two that harsh punishment and any necessary action will be taken against mortgage industry professionals that are found to be involved in this sort of fraud. The regulator has been striving to crack down on mortgage fraud levels recently, and as a result those that are found to be involved are given serious punishments, including hefty fines and bans from operating in the industry.

One official from the FSA said: “Perpetrators of fraud will increasingly find themselves facing bans and significant fines as we continue our work in this area.”

FSA takes action against broker is a post from: Glitec Loans

The figures show that in the three months up to September, which was the third quarter of the year, there were 13,161 properties that were repossessed, and this reflected an increase of around 92 percent compared to the same period a year earlier.

The data comes from the Financial Services Authority, which states that the number of people that fell behind on their mortgage repayments increased to 340,000. This was a rise of 24 percent on the year and an increase of 10 percent compared to the previous quarter according to the figures.

According to the Financial Services Authority there has been an increase in the number of people that have arrears for more than one and a half percent of their outstanding mortgage debt. This is said to have increased each quarter for the last five quarters, with a rise of around 4 percent each quarter according to the report.

There was also an increase in the number of repossessed homes that remained unsold, as the number of home being repossessed increased sharply compared to only a slight rise in the number of repossessed home that were actually being sold on by lenders.

Figures from the Council of Mortgage Lenders and other industry groups have also shown an increase in the number of people falling behind with mortgage repayments as well as the drop in property sales. In the third quarter of last year around 11,300 homes were said to have been repossessed by the Council of Mortgage Lenders, and this reflected an increase of 12 percent compared to the previous quarter.

92% increase in home repossessions in one year is a post from: Glitec Loans

In order to do this lenders will have to review their arrears policies and make changes according. These policies have already come under fire by the UK’s financial regulator, the Financial Services Authority.

Senior officials at all mortgage lenders and administrators have been contacted by the FSA and they have been told to review their arrears policies.

The FSA Retail Managing Director said: “Conditions in the mortgage market are difficult and it seems likely that these conditions will persist for sometime. In such a challenging operating environment it is particularly important for senior management to ensure the fair treatment of customers.”

Adrian Coles, director general of the Building Societies Association, said: “With arrears forecast to increase over 2009, it is essential that all lenders ensure that their arrears and repossession policies treat customers fairly. Building societies want their borrowers to remain in their homes if they have repayment difficulties, and genuinely view repossession as a last resort.”

FSA regulations relating to the treatment of customers that have arrears include ensuring that customers are given reasonable time to repay their arrears and to ensure that they are told about places where they can get advice and further assistance. A written policy has to be in place to show that lenders are making reasonable efforts to help those in arrears rather than rushing into repossession proceedings.

Fairness deadline issued to lenders is a post from: Glitec Loans

The UK’s financial regulator, the Financial Services Authority, has been clamping down on those found to be mis-selling this cover, and a number of lenders and providers have been fined over recent months, with one lender, the Alliance & Leicester, being fined around £7 million as a result of these breaches. More recently further probes and investigations have been launched into the sale of PPI following the receipt of a record number of complaints from PPI customers.

An investigation by the Competition Commission has revealed that there is very little competition amongst providers of PPI, and many credit card firms and banks are making a fortune from consumers who are taking out these policies along with their credit cards, loans, and other forms of finance. The lack of competition means that consumers that want to shop around for a more affordable policy and those that want to switch to another provider will find it difficult to find something that is better suited to their needs and pocket.

This type of insurance cover is commonly sold alongside financial agreements, such as loans and credit cards, and the purpose of the cover is to cover repayments on the debt for a specified period of time in the event that the policyholder is unable to work due to sickness, injury, or redundancy. However, ongoing investigations have revealed that the cover has been sold to many consumers that would never be eligible to claim, and that some lenders have convinced consumers that they have to take the cover from them along with the loan or card. Some lenders were found to be adding the cover onto finance deals without informing the consumer at all.

Whilst authorities have been trying to stamp out these problems through stricter regulations and by imposing fines, it appears that the problem is still ongoing. Many consumers are still complaining about PPI, and the FSA recently conducted a mystery shopper exercise to better evaluate the problems. It was found that lenders were failing to provide adequate details about the policy to consumers, and that few consumers were fold that the cost of the cover would be added to the loan and that they would then have to pay interest on it.

A number of possible solutions are being considered to try and stop the issues connected to PPI sales. This includes stopping certain firms from selling the cover, stopping lenders from selling the cover at all alongside credit agreements. Another solution being considered is heftier fines for those firms found to be breaching PPI sale regulations.

Competition Commission concerned over competition with PPI is a post from: Glitec Loans

Having analysed a sample of around 113 cases between January of 2006 and April of 2008 officials from the UK’s financial regulator found that Abbey Mortgages Ltd had not met the standard required. Mr Evans was found to have carried out inadequate checks with regards to whether the customers were earning the income that they claimed to earn, which led to customers taking on mortgages that they could not afford repayments on.

The standard FSA fine is £50,000 but the directors were unable to afford this, and instead opted for the high cost review instead. The two directors avoided a fine of £42,000 each by agreeing to pay the fine as quickly as possible.

Mr Evans stated: “The cases they were concerned about we have to pay for an independent company to do a full review to make sure there was no detriment to our clients. This couldn’t have come at a worse time with the market in the state it is. We’re not short of enquiries, we’re just short of mortgages for them.”

An FSA official said: “Obtaining and clearly recording the right information from customers is not just about process. It is an important step in preventing financial crime and giving customers the right advice and treating them fairly. This is always important but is especially important in difficult economic times.”

£30,000 fine for mortgage broker is a post from: Glitec Loans

PPI is offered with financial products such as loans, credit cards, car finance, etc. The purpose of the cover is to provide peace of mind for the consumer, who is told that in the event that they are unable to make repayments on the loan or finance due to sickness, redundancy, or accident the repayments will be covered for a set period of time, giving them time to get back on their feet.

However, concern arose when it was discovered that some lenders or providers were selling PPI to those that did not even qualify for it, and in some cases were either hard-selling this costly cover or were adding it without the knowledge of the consumer. Over the past couple of years authorities have been addressing such issues in relation to PPI, and regulations over the sale of PPI have become far more stringent.

Recent reports indicate, however, that the FOS is still receiving around five hundred complaints a week in relation to PPI, and this has prompted a further probe by the agency. The FOS has now written to the FSA in order to get a more indepth investigation underway, and has expressed concern that many lenders and providers are failing to take problems and issues relating to PPI sales seriously enough.

There are concerns amongst FOS officials that the PPI market, which is said to be worth £5.5 billion a year, is getting out of control, with around two million people thought to have been mis-sold this type of cover over the past five years. Even the Competition Commission has become involved in the issues relating to PPI sales, yet even with three major authorities in the financial world involved in this clampdown the issues and problems continue to arise.

Industry watchdogs have also raised concerns over the fact that some customers have been led to believe that PPI is compulsory, when in fact it is totally optional. Around 1.3 million people are thought to have taken PPI with credit cards under the impression that they had to take out the cover in order to get the credit that they wanted. Past investigations have shown that this is the impression that some lenders have been giving to customers without actually saying as much.

It is thought that if the FSA does decide to investigate further this could result in an industry-wide review and could result in forced changes to the sale of PPI.

FOS still cracking down on loan insurance is a post from: Glitec Loans

PPI is offered with financial products such as loans, credit cards, car finance, etc. The purpose of the cover is to provide peace of mind for the consumer, who is told that in the event that they are unable to make repayments on the loan or finance due to sickness, redundancy, or accident the repayments will be covered for a set period of time, giving them time to get back on their feet.

However, concern arose when it was discovered that some lenders or providers were selling PPI to those that did not even qualify for it, and in some cases were either hard-selling this costly cover or were adding it without the knowledge of the consumer. Over the past couple of years authorities have been addressing such issues in relation to PPI, and regulations over the sale of PPI have become far more stringent.

Recent reports indicate, however, that the FOS is still receiving around five hundred complaints a week in relation to PPI, and this has prompted a further probe by the agency. The FOS has now written to the FSA in order to get a more indepth investigation underway, and has expressed concern that many lenders and providers are failing to take problems and issues relating to PPI sales seriously enough.

There are concerns amongst FOS officials that the PPI market, which is said to be worth £5.5 billion a year, is getting out of control, with around two million people thought to have been mis-sold this type of cover over the past five years. Even the Competition Commission has become involved in the issues relating to PPI sales, yet even with three major authorities in the financial world involved in this clampdown the issues and problems continue to arise.

Industry watchdogs have also raised concerns over the fact that some customers have been led to believe that PPI is compulsory, when in fact it is totally optional. Around 1.3 million people are thought to have taken PPI with credit cards under the impression that they had to take out the cover in order to get the credit that they wanted. Past investigations have shown that this is the impression that some lenders have been giving to customers without actually saying as much.

It is thought that if the FSA does decide to investigate PPI further this could result in an industry-wide review and could result in forced changes to the sale of PPI.

FOS and FSA still cracking down on loan insurance is a post from: Glitec Loans