FSA fines mortgage lender

Home and County Mortgages Limited (HCML) has been fined £52,000 by the Financial Services Authority (FSA), for management failures and a lack of "skill, care and diligence".

The FSA found that one of HCML's advisers had inflated customer incomes on mortgage applications and that the company failed to deal with the matter.

The regulator stated that HCML failed to disclose the true cost of the single-premium payment protection insurance being recommended to its customers. In addition, the FSA found weaknesses in the company's sales processes, meaning customers were at risk from unsuitable advice.

Staff at HCML were found not to be following the company's complaints-handling process, nor dealing with all complaints on a consistent basis.

"HCML has been given a significant penalty for breaches of FSA principles, reflecting the seriousness of the misconduct and the risks posed to its customers arising from the management failures," said Jonathan Phelan, head of retail enforcement at the FSA. "We expect firms to have management controls in place to monitor their business effectively, and to deal effectively with misconduct by their staff, particularly where it has an impact on customers."