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      • 2008

FSA/PN/071/2008
16 July 2008

The Financial Services Authority (FSA) has banned two Wakefield mortgage brokers for failing to meet the standards expected of approved persons in terms of competence and capability. They failed to ensure adequate measures were in place to prevent their partnership from being used to submit potentially false mortgage applications and exposed about 250 customers to the risk of receiving unsuitable advice.  

Jonathan Phelan, Director of Enforcement FSA, said:

“The partnership’s systems and controls, management information process and monitoring of advisers fell way short of what is required creating unacceptable risks relating to unsuitable advice and financial crime.  We are continuing to find instances where mortgage brokers are unwilling or unable to maintain the standards we require and where we come across this we will take action including banning them.”  

Derick Whewall and Alan Hewitt, partners of The Mortgage Exchange, did not ensure that the partnership gave suitable advice to customers.  It did not obtain and record sufficient information to establish customers’ needs and objectives and its assessment and recording of affordability of recommended mortgage contracts was inadequate. 

They failed to ensure the partnership was organised so that it could identify and act upon obvious anomalies in false mortgage applications and help to prevent it being used by third parties to make mortgage applications on a fraudulent basis.  

The Mortgage Exchange has appointed a skilled person to review clients’ files and establish whether there has been any consumer detriment.  

Notes for editors

1. The Final Notices for Mr Whewall and Mr Hewitt set out more information about the case.
2. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
3. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.