Redstone Mortgage Limited fined by the FSA
Redstone Mortgages Limited are the lastest in the ever growing list of lenders to receive a fine from the Financial Services Aurthority (FSA). A number of serious failings by Redstone occuring between 01.01.1997 and 05.08.2009 relating to their handling process with mortgage arrears and unethical dealings with customers in general have led to the FSA handing them the £630,000 fine. The fine would have been much greater at £900,000 (30%) but Redstone qualified for the FSA’s settlement discount scheme. Redstone are the third lender that were referred to enforcement after the FSA’s thematic project mortgage arrears handling. GMAC-RFC and Kensington Mortgages were also given Final Notices.
The FSA’s findings included;
- Applying excessive and unfair charges to their customers accounts
- Disregarding their customers financial circumstances and reducing arrears to less than 2 months
- Underqualified staff who lacked adequate knowledge on how to treat mortgage arrears customers
- Sending excessive correspondence that customers found repetitive and confusing
Unfair and/or excessive fees to their customers accounts included;
- Charging a fee for returned direct debits despite the number of times the direct debit had been returned unpaid
- Fees for litigation activities, even when activities were taken by Restonestone unnecessarily
- Charging for field counsellor visits to customers despite them not being made aware of when the visit would take place or that they were able to reject the visit
- Charging arrears fees were an early repayment charge had been calculated.
Director of enforcement and financial crime, Margaret Cole 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. This is not how the FSA expects lenders to treat customers in arrears. Rather than assessing each customer’s personal and financial circumstances on an individual basis, the firm was applying a one size fits all approach by aiming to reduce arrears to less than two months. 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 and will take tough actions against firms who breach these rules”
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