The Royal Bank of Scotland has received yet another fine, this time it has been fined £14.5M by the Financial Conduct Authority (FCA) for failing
to ensure that advice given to mortgage customers was suitable.
The FCA said that the fine for RBS and
the NatWest reflected "serious failings" in their advised mortgage
sales business. The firms failed to ensure that advice given to customers was suitable,
according to the FCA. Two reviews of sales from 2012 found that in over half
the cases the suitability of the advice was not clear from the file or call
Customers were not advised properly over the affordability of
mortgages, or the appropriate term of products being offered. Others were
given poor advice when looking to consolidate their debts.
Tracey McDermott, director of enforcement and financial crime at the FCA is quoted by the Telegraph
“Taking out a mortgage is one of the most important financial decisions we
can make. Poor advice could cost someone their home so it’s vital that the
advice process is fit for purpose.
Both firms failed to ensure that their customers were getting the best
advice for them.
We made our concerns clear to the firms in November 2011 but it was almost a
year later before the firms started to take proper steps to put things
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
The FSA initially drew the firms’ attention to issues in their mortgage advice
process in November 2011. However, no effective attempts to remedy the problems were made until the end of September 2012.
The fine is of course paltry in terms of a bank the size of RBS, therefore one has to question whether it is in the slightest way effective in "managing" the future behaviour of banks.