Mortgage broker CEO hit with £49,000 fine

The FSA has fined mortgage broker, Hadenglen Home Finance Plc, and its chief executive for having inadequate systems and controls when recommending remortgages and PPI to its customers.

The firm was given a £133,000 fine while Richard Hayes, its chief executive, was given a personal fine of £49,000.

The FSA says it discovered the failings as part of its second phase of PPI work in May 2006 and found that nearly 2,000 remortgage and 1,900 PPI products were exposed to the unacceptably high risk of being sold a product which was not suitable.

The FSA says Hayes was fined because he was responsible for the company's business practices and implemented a sales strategy without telling customers the risk they faced from early redemption charges.

Margaret Cole, FSA director of enforcement, said about the fines: "The penalty imposed on Mr Hayes should leave senior management within firms in no doubt that the FSA will hold them to account if they fail to treat their customers fairly."

According to the FSA, Hadenglen has since implemented a remedial action plan and will be contacting customers for redress where appropriate. The FSA says that without doing so, the fines would have been much higher.