Mistreated Kensington borrowers in line for compensation
The Financial Services Authority (FSA) has fined Kensington Mortgage Company Limited £1.225 million over the way in which it treated some of borrowers facing financial difficulties.
The regulator identified a number of serious failings by the sub-prime lender between January 2007 and October 2008, and the firm will have to pay up to £1.066 million to compensate its mistreated customers.
Notably, staff had focused on recouping mortgage arrears over a short period of time, rather than agreeing a repayment schedule based on the customer’s individual circumstances.
The lender also applied three charges to customers’ accounts that were unfair and/or excessive.
These included a fee for a returned direct debit which was charged regardless of how many times the direct debit had already been returned unpaid.
According to the FSA, the company focused on the performance of its mortgage book and the profitability of the business, rather than on treating customers fairly.
The Authority’s director of enforcement and financial crime, Margaret Cole, says: “This case should serve as a strong reminder to firms dealing with retail customers, especially customers in a vulnerable position such as those with mortgage arrears, that the FSA will take robust action where it sees that customers are not treated fairly.”