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More arrears probes in the pipeline, FSA warns

The Financial Services Authority has warned lenders that it will continue to investigate firms and punish those that have treated customers in arrears unfairly.

The regulator published its annual report for the year 2010/11 last week in which it revealed it has further arrears action planned.

In its annual report, it says: “In January we announced the publication of the 101st mortgage broker prohibition. We have also taken tough action in mortgage arrears cases where firms have not treated customers in arrears fairly and failed to give consumers the protection they deserve.

“There will be further action in this area in the coming year.”

In April 2010 it fined Kensington Mortgage Company £1.22m in relation to its mortgage arrears handling processes and in July 2010 Redstone Mortgages paid a £630,000 fine for failings in relation to its mortgage arrears processes.

More recently it ordered DB Mortgages to pay £840,000 for irresponsible lending practices and unfair treatment of customers in arrears.

Julian Wells, director of marketing at HML, says: “No one in the industry will be surprised to see more fines announced but we hope that over the next year the focus will move more on to current and future business practices rather than historic ones.”

The annual report also revealed Hector Sants, executive director of the FSA, was paid a salary of £500,000 and other emoluments and benefits of £131,000. The FSA chief’s other rewards included a bonus of £115,000 and a £60,000 contribution to his pension, giving him a total pay package of £806,810, compared to £773,067 the previous year.

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