MORTGAGE lender Kensington, part of South African bank Investec, was yesterday fined £1.2m for treating its customers unfairly, City watchdog the Financial Services Authority (FSA) said.
Kensington, bought by FTSE 100-listed Investec in 2007, is paying back a further £1m in fees and charges it levied on borrowers, the regulator said in a statement.
The penalty reflects failings in Kensington’s handling of accounts in arrears which led it to apply unfair and excessive charges, the FSA added.
Kensington also focused on quickly recouping its loans from customers who fell behind with their repayments instead of agreeing repayment deals that fitted borrowers’ circumstances, it added.
“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,” said the FSA’s director of enforcement, Margaret Cole.
Kensington said it no longer collects the fees and charges singled out by the FSA.
“We apologise to all those customers who were impacted during this period and we are working to redress those customers affected as quickly as possible,” the lender said.
Kensington specialised in lending to home buyers with a poor credit history prior to its £283m takeover by Investec, but now focuses on safer “prime” lending.
The FSA would have slapped a £1.75m penalty on Kensington, but reduced the fine by 30 per cent because the bank agreed to settle.
The regulator’s biggest mortgage-related fine so far is the £2.8m penalty it imposed on home loan provider GMAC-RFC last October.
City A.M. Reporter