RBS fined £14.5 million for poor mortgage advice
The latest in a long line of 'unacceptable' failings could have cost borrowers their homes, says regulator
The Royal Bank of Scotland and NatWest have been fined £14.5 million by the Financial Conduct Authority (FCA) for giving poor mortgage advice to customers.
The regulator said that the largely tax-payer owned bank did not consider its customers' budgets fully, and did not offer appropriate debt management advice, the Financial Times reports.
The FCA accused RBS and its retail arm NatWest of "failing to ensure that advice given to customers was suitable". After reviewing 164 cases, the regulator found that only two met the required standards.
RBS and NatWest settled the dispute early to avoid a larger £20.7 million fine. The bank has agreed to contact over 30,000 consumers who were given the advice between June 2011 and March 2013.
The failings were "unacceptable and should never have happened," said RBS chief executive Ross McEwan. "Taking out a mortgage is one of the biggest moments in our lives, and our customers have every right to expect the very best service when making this decision," he said, adding that the bank had "worked hard to put things right".
"Poor advice could cost someone their home, so it's vital that the advice process is fit for purpose," the FCA's director of enforcement and financial crime Tracey McDermott said. "Both firms failed to ensure that their customers were getting the best advice from them."
This is the latest in a line of controversies the bank has faced, following a £390 million fine at the beginning of the year for its role in the Libor rate rigging scandal. The bank has also been forced to put aside £3.2 billion in compensation for mis-selling payment protection insurance, the BBC reports.
The FCA's chief executive Martin Wheatley said the financial sector appeared to be able to “constantly surprise with bad conduct.”