Kensington Mortgage Company fined £1.225 million by FSA

[calamity jane]

http://www.credittoday.co.uk/news/ne....cfm?news=1654




CJ

[orc]

Re: Kensington Mortgage Company fined £1.225 million by FSA

From the BBC

http://news.bbc.co.uk/1/hi/business/8615870.stm


"Sub-prime mortgage company Kensington Mortgages has been fined £1.225m by the financial regulator for treating borrowers who were in arrears unfairly. The Financial Services Authority (FSA) has also told the firm to repay £1.1m in excessive fees to those customers.
Kensington had levied three types of fee that the FSA said were unfair or excessive, and it was too aggressive in trying to get its money back.
The company said it was sorry and would repay the money promptly........................"

[enaid]

Re: Kensington Mortgage Company fined £1.225 million by FSA

http://news.bbc.co.uk/1/hi/business/8615870.stm


Kensington mortgages fined by FSA for unfair fees


Kensington's borrowers were at high risk of falling behind with payments

Sub-prime mortgage company Kensington Mortgages has been fined £1.225m by the financial regulator for treating borrowers who were in arrears unfairly. The Financial Services Authority (FSA) has also told the firm to repay £1.1m in excessive fees to those customers.
Kensington had levied three types of fee that the FSA said were unfair or excessive, and it was too aggressive in trying to get its money back.
The company said it was sorry and would repay the money promptly.
"Kensington would like to apologise to all those customers who were impacted by these charges and would like to reassure you that we are working to redress those customers affected as quickly as possible," the firm said.
'Intolerable'
After an investigation last summer, the Parliamentary Treasury Committee said the way some lenders profiteered by levying extra charges on people in arrears was "intolerable" and demanded that the FSA take action.

[Kensington's] management information focused on the performance of the firm's mortgage book and the profitability of the business, rather than on treating customers fairly


Financial Services Authority

Subsequently the GMAC-RFC mortgage lender was fined £2.8m for mistreating customers in arrears and had to repay £7.7m, plus interest, to 46,000 of its borrowers.
In the case of Kensington, the FSA found that between January 2007 and the end of October 2008 the firm's staff had focused on getting customers to repay their mortgage arrears as quickly as possible, rather than agreeing a repayment schedule they could afford.
The lender had also imposed three types of fee that were unfair or excessive:
• a fee if someone's direct debit bounced, which was charged no matter how many times the direct debit had been bounced before
• a fee for three or more cancelled direct debits that was higher than the the real administrative cost incurred by the lender
• a fee for early repayment of a mortgage that was also levied on the accumulated arrears fees and charges that had been imposed on the borrower.
The FSA said Kensington's poor treatment of its customers had not been the result of a deliberate or reckless breach of the rules on treating customers fairly.
But the firm's actions had still been serious, with the blame lying mainly with senior management who had failed to train their staff properly.
"Its management information focused on the performance of the firm's mortgage book and the profitability of the business, rather than on treating customers fairly," the FSA said.
High risk
Kensington was established in 1995 and was the first sub-prime lender to operate in the UK.
It specialised in lending to people with bad credit histories and to the self-employed who had to "self-certify" that they could afford their mortgages.
Both groups were high-risk borrowers who were more likely than ordinary bowers to fall behind with their repayments.
At its peak in 2007 and 2008 Kensington was lending 39,000 mortgages a month.
The company stopped taking on any new business in early 2008 but has recently re-entered the mortgage business, lending only via mortgage brokers and to people who have only small amounts of bad debt in their credit histories.
Money will be repaid to anyone who was charged the excessive fees after 1 November 2004 and all the affected customers should be contacted by 31 May 2010.
The firm has set up a helpline and 8% interest will be paid on top of the returned fees.

[dogtired]

Re: Kensington Mortgage Company fined £1.225 million by FSA

We, have a mortgage with this company.
We did have problems about four years ago when due to redundancy we fell behind with payments.
Despite informing them and trying to come to an agreement they took us to court.
We went to Citizens Advice who put us in touch with a solicitor specializing in these matters and when it did get to court the judge agreed a payment of the monthly fee plus £80.
They then "capsulized" this in 2008.
We canceled the direct debit and pay them by debit card on the phone and internet banking standing order,
So far we are just abut managing but every time I do phone I am told that because I have paid more than half I will not be liable for the £50 "fee" for missed payment AND despite low interest rate our payment has gone up in real terms.
When I asked about any type of compensation I was told that i would get a letter but nothing as yet.
Should i chase it up by letter and how should I word this?
Thanyou, so far your adice on other matters has been very helpful

[TUTTSI]

Re: Kensington Mortgage Company fined £1.225 million by FSA

Send them a letter giving them 14 days to respond and if you do not get a response then you can complain to the FSA & FOS.

[dogtired]

Re: Kensington Mortgage Company fined £1.225 million by FSA

Letter sent yesterday

[dogtired]

Re: Kensington Mortgage Company fined £1.225 million by FSA

Got a reply from them they say we do not "qualify" as we completed BEFORE 1st November, not aware there was a deadline, are they right?
Plan to chase it up when I tried today the computers were down but going to write to them as do not trust phone calls.
Looking back through the thread the date is mentioned but we did have these charges levied and they were very aggressive in chasing a small short fall although things are just about ok now would still try and chase this.