The Financial Services Authority (FSA) has fined a mortgage company for failings that resulted in borrowers facing higher debts.
GE Money Home Lending was fined £1.12 million for practices that caused customers to be £2.3 million worse off.
It is the first time that the FSA has penalised a mortgage lender in this way.
Action was taken because terms and conditions laid out by the company did not make it clear that customers would be charged interest on the full loan, including retention monies, over a six-month period.
Director of enforcement at the FSA Margaret Cole commented: “The firm’s failings were serious because a large number of borrowers, including some with impaired or non-standard credit profiles, were put at risk of financial loss.”
She added that the FSA expects high standards from organisations in administration matters such as this.
Meanwhile, those looking to get onto the property ladder may need to implement a debt management plan – research from the Fair Investment Company has found that it can take up to 15 years to save for a deposit.
By Jamie Price