RBS And NatWest Fined Over £14,000,000 For Serious Failings

The Royal Bank of Scotland (RBS) and NatWest have been fined more than £14,000,000 for failing to consider the full extent of a customer's budget when making a mortgage recommendation

In total, the two firms were fined £14,474,600 by the Financial Conduct Authority (FCA).

The firms failed to ensure that advice given to customers was suitable. Two reviews of sales from 2012 found that in over half of the cases, the suitability of the advice was not clear from the file or call recording.

The issues with the sales process included affordability assessments failing to consider the full extent of a customer's budget when making a recommendation, failing to advise customers who were looking to consolidate debt properly, and not advising customers what mortgage term was appropriate for them.

Only two of the 164 sales reviewed were considered to meet the standard required overall in a sales process.

The firms did not adequately address the failings when concerns were raised about the quality of the advice process by the FCA's predecessor, the Financial Services Authority (FSA). This resulted in customers being placed at risk for an even longer period.

Tracey McDermott, Director of enforcement and financial crime at the FCA said: "Taking out a mortgage is one of the most important financial decisions we can make. Poor advice could cost someone their home so it's vital that the advice process is fit for purpose. Both firms failed to ensure that their customers were getting the best advice for them.

"We made our concerns clear to the firms in November 2011 but it was almost a year later before the firms started to take proper steps to put things right."

(CD/JP)