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RBS Receive FCA Fine of £15m for Mortgage Advice

The Royal Bank of Scotland is set to receive yet another fine, but this time it’s over mortgage advice, which makes a change to the usual news regarding their part in the huge PPI mis-selling scandal.

The FCA (Financial Conduct Authority) is dishing out the fine to the bank over the issue of inappropriate mortgage advice to customers. They said that only two of the 164 sales that it reviewed between June 2011 and March 2013 were good enough to have met the standard required overall in a sales process.

False Advice

The FCA also found that RBS and their retail branch, NatWest didn’t consider the full extent of a customer’s budget when making a recommendation. The staff were also found to have not advised customers properly about what mortgage term was appropriate for them.

According to the FCA, there doesn’t seem to be any evidence that there is widespread detriment to customers but both RBS and NatWest are set to be contacting 30,000 customers so that they can raise any concerns that they may have about the advice that they received.


In response to the findings of the regulator at the end of 2012, RBS has come out and said that they have overhauled their mortgage advice and sales process and they have retrained all of their mortgage advisers.

The predecessor to the FCA, the Financial Services Authority had raised a number of concerns about branch and telephone sales at RBS in November 2011 but it was almost a year later when the two firms started to take steps to put things right.

They even went on to make assurances to the FSA in July 2012 that the necessary changes were well under way to address the regulators’ concerns.

Voicing Opinions

Speaking about the fine, Tracey McDermott, director of enforcement and financial crime at the FCA has said: “Where we raise concerns with firms we expect them to take effective action to resolve them without delay. This simply failed to happen in this case.”

She added: “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.”

Ross McEwan, who ran the RBS retail unit from August 2012 until he received his promotion to group chief executive in October last year has come out and said that the mortgage advice failings were “unacceptable and should never have happened”.

RBS Fine

RBS Fine

About the author

Daniel Lee

Company Director

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