The FSA identified a number of serious failings by Kensington which occurred between 1 January 2007 and 31 October 2008 in relation to its mortgage arrears handling processes and in its dealings with customers in arrears.
The firm also failed to take reasonable care to organise and control its affairs responsibly and effectively, and to ensure adequate risk management systems. Its management information focused on the performance of the firm’s mortgage book and the profitability of the business, rather than on treating customers fairly.
Margaret Cole, director of enforcement and financial crime, said:
"This case should serve as a strong reminder to firms dealing with retail customers, especially customers in a vulnerable position such as those with mortgage arrears, that the FSA will take robust action where it sees that customers are not treated fairly. Retail firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged."
In a separate case The FSA has fined mortgage broker Gary Lester £103,000 for knowingly submitting 42 mortgage applications to lenders containing false and misleading income information for his customers, and committing mortgage fraud to obtain a mortgage for himself.
The FSA has also banned Lester from working within the regulated financial services industry for failing to act as a fit and proper person and for lacking honesty and integrity.
Trading as Lifestyle Mortgages Limited (Lifestyle), in Edgware, North West London, Lester significantly inflated his income from Lifestyle to obtain a mortgage for himself in November 2006.
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