REDSTONE Mortgages has received a £630,000 fine from the Financial Services Authority (FSA) for failing to treat customers facing mortgage arrears fairly.
The FSA said yesterday the fine, which could have been as high as £900,000 if the sub-prime lender had not co-operated with the regulator, was handed to Redstone for “a number of serious failings” it committed between January 2007 and August 2009.
These included adopting a “one size fits all” approach to the way people who were behind with repayments were treated, with the group focusing on reducing arrear levels to less than two months, regardless of an individual’s circumstances.
Redstone has agreed to redress those customers affected by unfair or excessive charges, which will see the Yorkshire-based company repay up to £500,000 to people who were charged unfair or excessive fees by the group while they were in arrears.
Margaret Cole, director of enforcement at the FSA, said: “Many of Redstone’s customers were in a vulnerable position, having fallen into arrears on their mortgage payments, and firms should not charge such customers excessive and unfair fees.”
Cole said: “The FSA is committed to clamping down on mortgage lenders who fail to adhere to treating customers fairly rules. We are crystal clear about the standards we expect.”
FAST FACTS | FSA Mortgage fines
October 2009: GMAC-FRC fined £2.8m.
April 2008: Kensington Mortgages fined £1.2m.
July 2010: Redstone fined £630,000.
All fines related to unfair customer charges.