Bank Found Guilty Of Reckless Mortgage Lending
Deutsche Bank have been fined £840,000 by the Financial Services Authority (FSA) for irresponsible mortgage lendingand unfair treatment of customers in arrears. The Bank has also been ordered to pay £1.5m to 8,000 borrowers in compensation. The ruling relates to 7,967 home loans offered to people with poor credit histories between 2006 and 2007.
Deutsche Bank have been fined £840,000 by the Financial Services Authority (FSA) for irresponsible mortgage lendingand unfair treatment of customers in arrears. The Bank has also been ordered to pay £1.5m to 8,000 borrowers in compensation. The ruling relates to 7,967 home loans offered to people with poor credit histories between 2006 and 2007.
The bank was found guilty of failing to adequately check whether loans were affordable if the term extended into retirement and levying arrears charges that were significantly disproportionate to the actual cost to the business of administering the account
This is the fourth instance of lenders being fined for unfair treatment of arrears customers since Autumn 2009, with similar cases expected to follow.
Margaret Cole Director of Enforcement at the FSA, said “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 by their failings,”
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