FSA probe into arrears handling could leave Swift with £9.4m bill
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Swift Advances is being investigated by the Financial Services Authority for its handling of borrowers in arrears and has set aside £9.4m to cover a potential fine and other costs.
The investigation was revealed in the company’s accounts for the year ending March 31 2010. The first and second charge mortgage lender says the group received formal notice of the FSA’s probe on July 31 2009.
Its accounts also show it has identified what it refers to as an anomaly in its mortgage adminis-tration system in respect of the amount due by some customers for early settlement of their mortgage, which has led to client detriment.
The group says it has resolved to undertake a redress programme for affected customers.
Its accounts say: “The directors currently estimate that the group is likely to incur £9.4m of costs, com-prising £1.4m in respect of costs already incurred and £8m in respect of further costs that could be in-curred, relating to legal and pro-fessional costs, a potential fine and costs implementing any redress programme.”
The Essex-based lender filed its accounts on December 9 2010 and it is not known whether the FSA has taken any action against it or intends to.
Swift Advances is also being investigated by the Office of Fair Trading.
Its accounts add: “On November 10 2010 the OFT advised that it is minded to impose requirements under section 33A of the Consumer Credit Act 1974 in relation to activities conducted under Swift Advances and Swift Securities Limited credit act licences.”
Swift Advances is regulated under the Consumer Credit Act in respect of second charge lending and by the FSA for first charge mortgages.
Kensington Mortgage Company and Redstone Mortgages were fined for arrears management failings in 2010.
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