FSA imposes massive fine on GMAC-RFC for overcharging
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.
GMAC-RFC will have to pay a 2.8m fine, and repay 7.7m in unfair or excessive charges to 46,000 customers.
It’s the biggest mortgage-related penalty from the FSA since it fined GE Money Home Lending 1.12m last year.
The FSA said GMAC-RFC took administration fees from customers out of proportion to its costs and initiated repossessions before fully considering the alternatives.
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.
“We want to apologise to customers affected,” it said.
“We fully accept that for certain fees our estimates of the costs were not proportionate,” it added.