Mortgage broker fined £4m after exploiting vulnerable customers
The Financial Conduct Authority (FCA) has fined an unauthorised mortgage broker and its associates £4m after it was found to have exploited vulnerable customers.
It says London Property Investments (LPI) arranged mortgages whilst Birmingham-based NPI Holdings (NPI) bought properties and rented them back to the sellers, both without FCA authorisation.
Daniel Stevens, the director of LPI and NPI, and his father, Tony Stevens, were also found liable.
In his judgment, Mr Justice Fancourt described these breaches as “serious contraventions, conducted over an extended period, involving high levels of culpability including deception of the consumers and the lenders, and which took advantage of the consumers’ vulnerability”.
The four defendants are ordered to pay around £4m to the FCA which must be recovered before any compensation can be paid to affected individuals.
LPI is required to remove restrictions registered against the titles of four properties. The FCA says these restrictions were used to force individuals to pay “exorbitant” fees to LPI. If these fees were not paid, then the individual could not sell or re-mortgage their property. In some cases, this trapped individuals into high-interest bridging loans.
Steve Smart, executive director of enforcement and market oversight at the FCA said: “These sham brokers preyed on vulnerable people who were struggling financially and trapped them with exorbitant fees.
“The defendants used a smokescreen of deception which cost consumers and lenders dearly. This was a complex case, but the ruling shows that these were serious breaches of our rules. It is only right that we can now pursue LPI, NPI, Daniel and Tony Stevens to compensate for the losses they caused the victims.”
