Thinc fined £900,000 over sub-prime sales
IFA Thinc Group, owned by French insurance giant Axa, has been fined £900,000 by the Financial Services Authority for lax advice and procedures when advising clients to take on sub-prime mortgages.
The FSA said in a period between 1 January 2006 and 30 September 2007 Thinc failed to obtain adequate financial information about some of its sub-prime mortgage customers before giving advice and did not keep adequate records to show that the advice was suitable.
The regulator added that Thinc, had also provided some of those customers with a 'Record of Suitability' letter that did not correspond to the product advised or taken.
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"This case demonstrates the importance of firms being able to prove to themselves and to the FSA, through proper records, that they are treating their customers fairly by doing everything necessary to make sure that they get suitable advice," Margaret Cole, the FSA's director of enforcement said.
Thinc brokered £2.7bn worth of mortgage contracts during the 21 month period, including sub-prime mortgages worth £77m. There have been concerns that some of these UK sub-prime customers may not be able to remortgage and face huge increases in repayments because of the credit crunch.
"We sincerely regret the shortcomings that have been identified with regard to record keeping processes relating to a small number of sub-prime mortgages," said Thinc chief executive John Simmonds in a statement.
