Thinc fined £900,000 over subprime failings

Thinc Group has been fined £900,000 (€1.13m) by the Financial Services Authority (FSA) for not having adequate risk management and compliance systems for its sub prime mortgage business.

The FSA said the fine was also levied against Thinc, a subsidiary of Axa, after it failed to take reasonable care to ensure that it had records to prove that advice it gave to customers in relation to the sale of sub prime mortgages was suitable.

Margaret Cole, director of enforcement, said: "This case demonstrates the importance of firms being able to prove to themselves and to the FSA, through proper records, that they are treating their customers fairly by doing everything necessary to make sure that they get suitable advice. The level of fine shows that we are determined to impose higher fines for serious failings in the retail market and that poor record keeping is a serious failing even where, as in this case, the FSA has not determined that the firm mis-sold sub prime mortgages and there have been few complaints."

“This case demonstrates the importance of firms being able to prove to themselves and to the FSA, through proper records, that they are treating their customers fairly by doing everything necessary to make sure that they get suitable advice.

The FSA said the failings continued after a visit to the firm by the regulator in February 2007 because the remedial action implemented by the firm was ineffective and the firm's sales practices and compliance regime did not improve.

Following discussions with the FSA the firm has agreed to implement a comprehensive remedial plan and to restructure its sales processes.