For the first time in history, British corporate watchdog the Financial Services Authority (FSA) has fined both a firm and its chief executive for re-mortgage and payment protection insurance (PPI) failings.
Mortgage broker Hadenglen Home Finance (Hadenglen) has been fined £133,000 and its chief executive Richard Hayes nailed with a £49,000 penalty.
The UK regulator found Hadenglen exposed about 2000 re-mortgage and 1900 PPI customers to unacceptable practices.
Hadenglen's customer base for re-mortgages is typically sub-prime and therefore includes customers with low or impaired credit ratings who may find it difficult to obtain finance from traditional sources.
Hayes' sales strategy for re-mortgages and insurance were inadequate, the FSA found.
As a result, re-mortgage customers were clamped with charges and PPI customers were advised to purchase a product that have been unsuitable.
"Firms must develop and maintain systems and controls that minimise the risk of providing unsuitable advice to customers," FSA director of enforcement Margaret Cole said.
"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."
Hadenglen has started remedial action to help its clients.
The FSA has previously fined five firms a combined $1.5 million over poor PPI selling practices.
