The Financial Services Authority (FSA) has declared war on unacceptable practices in mortgage lending, with a £2.8m fine for GMAC-RFC over what it termed ‘unfair treatment of customers’.
 GMAC’s failings included “excessive and unfair†arrears charges for missed mortgage payments on loans, repayment plans that did not always consider a customer’s circumstances, and moving to repossess when this was not a last resort.
GMAC must now also repay up to £7.7m in redress to over 46,000 mortgage customers who had experienced arrears and repossessions.
Moreover, the case sets a precedent which, according to the FSA, should be heeded by other lenders, whom it urged to ‘sit up and take notice’ of the outcome of its investigation.
“This case shows credible deterrence in action. It is an excellent example of what the FSA’s more intrusive approach can achieve for consumers,†said Margaret Cole, director of Enforcement and Financial Crime at the FSA.
“Mortgage lenders and third party administrators should read this final notice … and take action in the interests of their customers.â€
 GMAC was allowed a 30% reduction in its fine for cooperating to ensure a speedy conclusion to the investigation, under the FSA’s settlement discount scheme. The full fine would have been £4m.
