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FSA imposes massive fine on GMAC-RFC for overcharging

City A.M. Reporter
THE financial services authority (FSA) slapped home loans provider GMAC -RFC with the biggest ever mortgage-related fine seen in the UK yesterday, accusing it of overcharging and dealing unfairly with customers in arrears.<br><br>GMAC-RFC will have to pay a 2.8m fine, and repay 7.7m in unfair or excessive charges to 46,000 customers.<br><br>It's the biggest mortgage-related penalty from the FSA since it fined GE Money Home Lending 1.12m last year. <br><br>The FSA said GMAC-RFC took administration fees from customers out of proportion to its costs and initiated repossessions before fully considering the alternatives.<br><br>Part of GMAC Financial Services, the lender that grew out of US car maker General Motors, GMAC-RFC began offering mortgages in Britain in 1998, and ranked as the country's eleventh-biggest home loan provider by 2007. The company stopped lending to new customers last year.<br><br>"We want to apologise to customers affected," it said.<br><br>"We fully accept that for certain fees our estimates of the costs were not proportionate," it added.<br mce_bogus="1">