Tuesday 25 January 2011

FSA bans five individuals and fines one, bringing the total number of mortgage intermediary prohibitions to 101


FSA/PN/012/2011

25 January 2011



The Financial Services Authority (FSA) has banned five mortgage intermediaries and fined one of them £104,000. This brings the total number of mortgage intermediaries banned since December 2006 to 101.

Most of the individuals have been banned because they are not fit and proper to work in regulated financial services through failings that led to mortgage fraud.



Mark Thorogood trading as Property Park Mortgages, Colwyn Bay, North Wales and Darren Button formerly of Property Park Mortgages, Colwyn Bay, North Wales



Thorogood, the owner of Property Park Mortgages, has been fined £104,294 and banned from working in regulated financial services.



The FSA found that Thorogood had knowingly submitted fraudulent mortgage applications for himself and his wife, inflating his income from £22,950 to £120,000 and her income from £8,832 to £95,000.



In addition, Thorogood submitted two mortgage applications containing fraudulent information on behalf of a family member. In the first application he stated the family member’s income was £85,000 and in the second he stated that it was £130,000; the actual income was £17,610.90.



Thorogood also failed to have a documented system for supervising the activities of advisors at the firm. Some of the files reviewed by the FSA showed record keeping failures and a lack of evidence to support the income stated on the mortgage applications.



The FSA has also prohibited Darren Button, a former advisor at the firm, for deliberately entering false income and employment information in mortgage applications which he then submitted to lenders.



Button also attempted to conceal a customer’s true income on a payslip with correction fluid because he knew the lender would reject the application if they saw the genuine income.



Button was also aware of other fraudulent applications but took no action to prevent this as he thought ''it didn’t seem to be a huge problem''.



Daniel Djaba trading as DPD Consultancy Services, London, and Adeolu Adeosun, formerly of DPD Consultancy Services , London



Daniel Djaba, trading as DPD Consultancy Services (DPD), has been banned from performing a significant influence function in regulated financial services. He failed to have appropriate systems and controls in place at DPD, and therefore failed to prevent the firm being used to commit mortgage fraud.



Specifically, Djaba failed to ensure that one of his advisors was properly monitored, effectively allowing the advisor to submit an inaccurate mortgage application for himself.



Djaba also failed to ensure DPD gathered robust documentary evidence to support income declared by customers and submitted two applications for customers that contained misleading information.



The FSA has also prohibited Adeolu Adeosun, a former advisor at DPD, for knowingly submitting fraudulent mortgage applications for himself and intentionally misleading the FSA during an interview.



Adeosun was a self-employed advisor who provided mortgage advice to DPD’s customers. However, he was not qualified to give advice, nor had he been assessed to be a competent advisor by DPD.



In a residential mortgage application for himself in April 2008 Adeosun inflated his income for 2006 by more than eight times from £7,826 to £66,022. In a buy-to-let application for himself in 2007 Adeosun again misleadingly used gross income figures rather than net. Adeosun also misled the FSA in an interview by not telling the truth about when he stopped working for an employer.



Waheed Hanif, trading as The Broker Group, Burton upon Trent



Waheed Hanif was a sole trader at The Broker Group, conducting mortgage mediation business. He has been banned for acting dishonestly and lacking integrity.



In November 2009 Hanif was convicted by Stafford Crown Court of one count of obtaining a pecuniary advantage for another by deception and one count of obtaining a money transfer by deception. Hanif had submitted false information in his application for FSA authorisation and a false mortgage application to a lender in his own name.



Margaret Cole, the FSA’s managing director of enforcement and financial crime, said:



''Mortgage intermediaries must adhere to our rules to ensure that consumers are treated fairly and protected from excessive risk, and reduces the possibility that lenders are exposed to fraud.



''For those that don’t follow the rules the consequences are very serious. Not only might they receive a fine and a ban, but - by no longer being able to work in regulated services - they also face losing their livelihood.''



Mortgage intermediaries banned



Since the FSA began investigating intermediaries in the mortgage sector in mid 2005, it has banned 101 intermediaries. Many of these operated in London and the South East, but the FSA has taken action against mortgage intermediaries all around the United Kingdom.



•London & South East – 53 prohibitions

•North West & Wales – 20 prohibitions

•North East - 10 prohibitions

•Midlands – six prohibitions

•South & South West – six prohibitions

•Northern Ireland – four prohibitions

•Scotland – two prohibitions

Ninety five of the 101 individuals were prohibited for failings in relation to mortgage fraud. The other six’s failings included: lying to the FSA, failing to take reasonable steps to prevent their businesses from being used to commit mortgage fraud, and a serious lack of competence and capability to run an FSA-authorised firm.



Many of the 101 were fined as well as banned, with total fines amounting to £2.5 million; the biggest single fine imposed was £294,500 for a combination of mortgage and life insurance fraud.



Over the last four years the FSA’s Information from Lenders scheme has generated more than 1,000 alerts about mortgage intermediaries. Mortgage lenders participate in the scheme on a voluntary basis and the information they supply is critical in helping the FSA clamp down on dishonesty and other misconduct in the mortgage sector.



As well as lenders, the FSA has also collaborated with numerous police forces across the UK. To date, the police have successfully prosecuted six intermediaries with the FSA’s help: Stephen Jones, Gordon Benville, Leo Kusi-Appiah, Omotayo Fawole, Isah Mohammed and Dele MacAulay. More trials are scheduled for 2011.



Margaret Cole added:



''This is a significant milestone in our efforts to stop dishonest people from working in regulated financial services. By working closely with lenders and police forces, the FSA has successfully targeted numerous dishonest mortgage intermediaries and we have taken decisive action against them.



''We will continue to gather intelligence and work with other agencies to deal with dishonest intermediaries. We will use all the tools available, including unannounced visits and search warrants, where appropriate, and we will report criminal activity to the police.



''Looking ahead, changes proposed in the Mortgage Market Review will help our fight against mortgage fraud, including making it the lenders’ ultimate responsibility for assessing affordability and requiring income verification.''

This article first appeared on the FSA website: http://www.fsa.gov.uk/pages/Library/Communication/PR/2011/012.shtml


Sunday 16 January 2011

KASUKUWERE'S MORIBUND DREAM IS A REFLECTION OF ZANU PF’S INEPTITUDE

Someone must tell Saviour Kasukuwere that "youth" and "children" are not the same words and therefore can never be used interchangeably. For him to have a dream if not a nightmare and wake-up thinking he can extend the national service to children doesn't only cross the boundary of common sense but it interferes with the role of the Ministry of Health and Child Welfare. In any case do children of ZANU PF bosses ever go for National Service as well or its for the poor? No, their children agree with all of us that everything in its entirety in Zimbabwe is dead and this is why they have been sending them to study outside Zimbabwe. They do not endorse Zimbabwe's education, health delivery and even the Zimbabwe Broadcasting Corporation.



With the exception of Ambrose Mutinhiri who else among the ZANU PF elite ever sent their children to the National Youth Service? Why? Because they too know that the programme is nothing but the academy of hooliganism and intolerance. So negative are they with Zimbabwe's education system that after their children's deportations from the West they made sure they did not stay in Zimbabwe any extra days and decided to send them to other centres; Hong Kong, Malaysia, Singapore etc. a resounding vote of no confidence on their own performance at the helm of our country. This has been the undoing of Zimbabwe, ZANU PF is not capable of thinking straight and they reduce our country to a laughing stock by giving us ministers who are comic characters who cannot sit down to think properly.



The National Service has been reduced to a circus of expectations and frustrations over the past 9 years and for a minister, with whom I share a liberation legacy bestowed upon us by our liberation war hero parents, to continue being used to further objectives that are countervailing to the liberation struggle is really painful to come to terms with. What has ZANU PF not done to marginalise the liberation struggle? They joined hands with Peter Walls and Ken Flower to discredit their ZIPRA comrades whom they later called dissidents as a precursor to massacre 22000 innocent Ndebele-speaking Zimbabweans, they dumped China, Scandinavian countries and the then USSR, our liberation time comrades, in order to please the West, they made Joshua Nkomo, a man they would later shower with praise as Father Zimbabwe in his death, an object of ridicule and humiliation, they stripped Dumiso Dabengwa and Lookout Masuku of their freedom, dignity and military ranks and forced ex-ZIPRA cadres out of the military. For 17years they made former veterans of the liberation struggle paupers and beggars in independent Zimbabwe while they dinned and wined with the likes of Chinamasa and Chidyausiku, both Senators in UDI times, Olivia Muchena; a member of Muzorewa's Zimbabwe-Rhodesia government and Phillip Chiyangwa, a member of the notorious BSAP that had terrorised the same ex-cadres for the independence of Zimbabwe.



They refused Augustine Chihuri, an ex-cadre, attestation into the Zimbabwe National Army and preferred to have Peter Walls instead. As we speak they beat the same mother and father who suffered for them just because they have decided to exercise their right to choose a party of their choice. They made Zimbabweans squatters in their own country and after being challenged to that they embarked on half-backed glasnost that later led to our fiscal colonisation by USA, South Africa and Botswana with our own currency, the symbol of our identity, disappearing into oblivion in the same way that our proud independence has now become host to regional, continental and international scrutiny. 31 years into our independence ZANU PF has betrayed us and we no longer have the fiscal symbol of our sovereignty, a national currency, and we are now the colony of SADC which made us a "Principality" governed by three people but with SADC's barometer. Indeed the current ZANU PF is a party of traitors who sold our souls.



JULIUS SAI MUTYAMBIZI-DEWA is the Chairman of Communities Point. He writes in his own capacity.



Contacts: mutyambizidewa@yahoo.co.uk or 00447529705413 or 07401182271

Tuesday 11 January 2011

FSA fines RBS and NatWest £2.8m for poor complaint handling

11 January 2011



The Financial Services Authority (FSA) has fined Royal Bank of Scotland (RBS) and National Westminster Bank (NatWest) £2.8m for multiple failings in the way they handled customers’ complaints, responding inadequately to more than half the complaints reviewed by the FSA.

The FSA’s investigation found that there was an unacceptably high risk that customers may not have been treated fairly due to a number of failings within the banks’ approach to routine complaint handling, including:



•delays in responding to customers;



•poor quality investigations into complaints, with complaint handlers failing to obtain and consider all the appropriate information when making their decision;



•issuing correspondence that failed to fully address all of the concerns raised by customers and failed to explain why complaints had been upheld or rejected; and



•customers not receiving their Financial Ombudsman Service (Ombudsman) referral rights within the appropriate time period.

Of the complaint files reviewed by the FSA, 53% showed deficient complaint handling; 62% showed a failure to comply with FSA requirements on timeliness and disclosure of Ombudsman referral rights; and 31% failed to demonstrate fair outcomes for consumers.



The FSA’s investigation also found that:



•the banks did not give complaint handling staff adequate training and guidance on how to properly investigate a complaint;



•the monitoring of complaint handling in branches and the management information produced was ineffective in assessing whether customers were being treated fairly; and



•the banks failed to ensure that complaint handlers properly reviewed complaints taking account of all relevant factors.

Margaret Cole, the FSA’s managing director of enforcement and financial crime said:



“We expect firms to treat customers fairly and that consumers can be confident that their complaints will be dealt with properly. The failure of these two high street banks to deal adequately with complaints put consumers at unacceptable risk and the fine of £2.8m reflects this.



“The poor complaints procedure of RBS and NatWest came to light during our review of complaint handling in major banks. The review showed that banks need to make major changes to handle consumer complaints fairly and the FSA will continue to take appropriate action to ensure these changes are put in place.”



The failings in the complaints handling processes of RBS and NatWest were uncovered during the FSA’s review of complaints handling in the UK’s major retail banks. As a result of the thematic review, five banks have undertaken significant action to improve their complaint handling. The FSA subsequently published a consultation paper on 30 September 2010 on changes to complaint handling requirements, which aims to increase the quality of complaints handling across the industry and increase senior management accountability for complaints.



RBS and NatWest have co-operated fully with the investigation, accepting the findings at an early stage and have agreed to make significant changes to their complaints handling arrangements. The FSA has required RBS and NatWest to work with an independent skilled person to undertake an extensive review of all parts of their complaint handling arrangements. The FSA is also working closely with the banks to ensure that the changes will lead to effective improvements.



The firms agreed to settle at an early stage in the investigation and therefore qualify for a 30% reduction in penalty. Were it not for this discount the FSA would have sought to impose a financial penalty of £4m on the firms.





Notes to editors

1.The Final Notice for RBS and NatWest can be found on the FSA website.

2.RBS and NatWest are both part of the RBS Group and their UK retail bank branch networks operate under the umbrella of RBS UK Retail with standardised complaint handling arrangements.

3.The investigation into RBS and NatWest complaints handling arrangements related to routine and non-complex complaints received by the bank branch network. It did not concern complaints relating to payment protection insurance, bank charges, correspondence to the Ombudsman and complaints concerning life insurance, pensions and investments. The complaints files reviewed dated from H1 and H2 2009.

4.During the period covered by the review, RBS UK Retail was the second largest provider of retail banking products and services in the UK, with approximately 2,200 bank branches and 15 million customers.

5.Between September and December 2009, the FSA undertook a review of complaint handling at RBS UK Retail as a part of a wider review of complaint handling in major banks, the findings of which were set out in the FSA report entitled Review of complaint handling in banking groups published in April 2010.

6.The FSA has undertaken a programme of work to drive improvement in the quality of firms’ complaint handling and poor complaint handling has also been identified as a key conduct risk in the Financial Risk Outlook (FRO) 2009 and 2010. As a part of this programme the FSA published a Consultation Paper on 30 September last year on changes to complaint handling rules.

7.The FSA has also increased transparency on complaint handling through new rules requiring firms to publish their own complaints data every six months. Firms published their first complaints data summaries at the end of August 2010 and the FSA published consolidated firm-specific data at the end of September 2010 to enable firms' performance to be compared across their peer group.

8.The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.



This article first appeared on the FSA website.

Saturday 8 January 2011

PPI complaints - Firms' customer response letters December 2010

If you have recently complained about how you were sold payment protection insurance (PPI), you may have received a letter from a firm stating that they have decided to put your complaint on hold.

The firms' response is likely to include the following statements:

•we have registered your complaint;

•we will keep you informed if there are material developments in the court case that affect your complaint;

•we will revert to you once the matter has been resolved through the court;

•we will not take account of the delay for the purposes of calculating any applicable time bar period either in relation to court proceedings of for calculating any period within which a complaint should be referred to the Financial Ombudsman Service.

The reason you have received this letter is that some firms have decided that they are unable to provide a final response to the majority of PPI complaints due to ongoing legal proceedings. This refers to the British Bankers’ Association (BBA) legal challenge to our PPI complaint-handling measures published in August. These new measures are designed to ensure customers are treated fairly when complaining about the sale of PPI.



What does this mean for you?

In these cases you can still refer your complaint to the ombudsman service as normal. Here we provide some general questions and answers to help you with the next steps of your complaint.



I have received a letter from my firm telling me it is unable to provide a final response to my PPI complaint, what does this mean?

Firms should register and respond to each complaint within eight weeks of receiving it. If you are sent a holding letter – because a firm has decided it will not provide a final response to your complaint until the outcome of the BBA’s legal challenge is known – you can still refer your claim to the ombudsman service as normal.



The ombudsman service is a free, independent service for settling disputes between financial services firms and their customers. More information on how the ombudsman service is handling complaints can be found here



What information do I need to provide to the ombudsman service?

You should fill out the Ombudsman’s PPI questionnaire as well sending the firm’s response letter and any other evidence relating to your claim.



Are there specialist companies available to help with my complaint?

The ombudsman service is designed to be straightforward to deal with and, regardless of whether your PPI complaint is upheld, is a free service to you. Separately, there are specialist claims management companies that can help you submit your complaint to the ombudsman service. However these firms will charge you for using their services. The Ministry of Justice’s website provides information on claims management companies if you are considering using one.



What is the latest situation on the BBA’s legal challenge?

To try and ensure customers are treated fairly when complaining about the sale of a PPI policy, we developed a package of measures for firms to follow from 1 December 2010. These measures are designed to ensure firms handle complaints properly.



The BBA started legal proceedings on 8 October 2010 (known as a judicial review) challenging the lawfulness of these measures. We consider the measures to be a fair solution for consumers and the industry and are strongly contesting this challenge.


This article first appeared  on the Financial Services Authority Website