FSA fines Thinc Group £900,000 for sub-prime failings

  • Story by: Catherine Couch
  • Magazine: MortgageAdviser
  • Published Thursday , May 15, 2008

The Financial Services Authority (FSA) has fined large IFA Thinc Group Limited and two of its group companies £900,000 for sub-prime record keeping failings.

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Between 1 January 2006 and 30 September 2007, Thinc Group Limited was found not to have had adequate risk management and compliance systems in place for its sub-prime mortgage business.

The regulator said that Thinc was also found to have failed to take reasonable care to ensure that it had records to prove that the advice it gave to customers in relation to the sale of sub-prime mortgages was suitable.

Margaret Cole, director of enforcement for the FSA, said: "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.

"The level of fine shows that we are determined to impose higher fines for serious failings in the retail market and that poor record keeping is a serious failing even where, as in this case, the FSA has not determined that the firm mis-sold sub prime mortgages and there have been few complaints."

Cole said Thinc Group Limited's failings were particularly serious because its conduct could have had an adverse effect on the customers concerned, many of who had been recorded as having adverse credit histories and/or were consolidating debts.

A statement from Thinc Group Limited said: "Thinc accepts the FSA final notice published today and regrets failures in its compliance systems resulting in poor record keeping in connection with sub prime mortgages between 1 January 2006 and 30 September 2007.

"Thinc has co-operated fully with the FSA and is implementing a comprehensive remedial plan addressing record-keeping processes, adviser training and vetting procedures for non-prime mortgages.

"Further changes will be made as the company continues to review and improve its processes on an ongoing basis."

John Simmonds, chief executive of Thinc, said: "We sincerely regret the shortcomings that have been identified with regard to record keeping processes relating to a small number of sub-prime mortgages. We are continuing a comprehensive review of our systems to ensure that these are improved.

"While I believe that the industry as a whole faces the challenge of raising standards, Thinc is a strong company and is well placed to achieve this."