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April 12, 2010

Kensington Mortgages fined £1.2m

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by Kay Mitchell

Kensington Mortgages fined £1.2m

The Financial Services Authority (FSA) has fined Kensington Mortgages, part of South African bank Investec, £1.225 million for mistreating customers.

The FSA said Kensington treated some of borrowers facing financial difficulties unfairly and has ordered the firm to repay £1.1 million in compensation to those customers.

In a statement, the FSA’s director of enforcement, Margaret Cole, said: “Retail firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged.”

Meanwhile, Kensington issued an apology to customers affected and said it “would like to reassure you that we are working to redress those customers affected as quickly as possible.”

Kensington, which was the first sub-prime lender to operate in the UK, would have received a £1.75 million penalty but it agreed to settle early, thereby receiving a 30% reduction.

In the meantime, GMAC-RFC mortgage lender has also been fined £2.8 million for mistreating customers in arrears and had to repay £7.7 million plus interest, to more than 40,000 of its customers.


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