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RBS and NatWest hit with £14.47mln fine over mortgage mis-selling

Published: 18:26 27 Aug 2014 AEST

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RBS (LON:RBS) has been hit with a £14.47mln fine from the Financial Conduct Authority for what the British watchdog called “serious failings” in mortgage sales.

The FCA said The Royal Bank of Scotland and its NatWest unit failed to ensure advice given to customers was suitable.

A mere two out of 164 mortgage sales from 2012 reviewed by the FCA were considered to meet necessary standards.

The financial watchdog judged that advisors failed to consider the full extent of a customer's budget in recommendations.

It also criticised the banks for failing to properly advise customers looking to consolidate debt and for not advising customers what length mortgage was appropriate for them. 

"Taking out a mortgage is one of the most important financial decisions we can make,” said Tracey McDermott, the FCA’s director of enforcement and financial crime.

“Poor advice could cost someone their home so it's vital that the advice process is fit for purpose.”

The FCA said it first flagged its concerns in 2011 following a review of branch and telephone sales, yet it took nearly a year until necessary changes were made.

McDermott added: "Where we raise concerns with firms we expect them to take effective action to resolve them without delay.  

“This simply failed to happen in this case."

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