Abacus Daily Debt News

46,000 debtors to be redressed by FSA so far

Proof of how the Financial Services Authority’s (FSA’s) strengthened regulations of the mortgage industry can help those in debt has been revealed by the fining of GMAC-RFC, which was found to have treated customers unfairly in terms of arrears and repossessions.

As a result of an investigation into the firm’s practices over a period of four years, an estimated total of £7.7 million - plus interest - will be paid to more than 46,000 mortgage borrowers in the UK.

Among other issues, it showed that excessive charges were imposed that did not reflect administrative costs and training of mortgage servicing staff was inadequate.

Director of enforcement and financial crime with the FSA Margaret Cole noted that the case “is an excellent example of what the FSA’s more intrusive approach can achieve”.

Earlier this month, the body announced plans help reduce  debt management problems many borrowers find themselves with by  for reforming the mortgage market to improve its services for borrowers, including introducing measures such as affordability tests and the prohibition of self-cert mortgages.

By Sarah Adie