The CEO of CMCL, Henry Moser, has been fined £70,000 and agreed to step down from his role within three to six months.
Andrew Lawton, the firm’s compliance director, has been fined £13,500 and banned from holding a significant influence function.
The FSA has also required CMC to carry out a redress exercise that could see approximately £2m paid to around 2,000 affected customers.
CMC operated in niche markets, including lending to customers with poor credit histories.
The FSA found that CMC failed to treat some of its customers fairly when they fell into arrears, was unable to always demonstrate that mortgages it sold were affordable, and did not always communicate regularly or fully with its customers.
Moser has been disciplined for failing to spot these problems and put them right.
CMCL overcharged some customers in arrears and applied arrears charges inconsistently and unfairly. Customers were also sometimes notified of charges after they had been incurred.
The FSA also found that:
when CMC transferred customers in arrears to Monarch Recoveries for debt recovery, they were charged £150 despite it being an in-house company;
CMC did not always make a reasonable effort to reach an agreement with customers in arrears over method of payment; and
CMC did not always properly assess the affordability of mortgages by, for example, challenging a customer’s declared income.
Moser, as CEO, was ultimately responsible for the actions and compliance of the firm, however he failed to ensure the firm was being properly managed so that problems would be identified and remedied.
Lawton was aware of certain poor practices taking place at the firm but failed to put them right and demonstrated a lack of competence and capability in his role as a compliance director.