The Financial Services Authority (FSA) has banned two Tyne & Wear mortgage brokers for business failures which could have led clients to take out unsuitable mortgages. 

Brothers Edward and Ronald Allen did not collect customer information and failed to check the quality of mortgage advice at their firm, Homeplan. Despite the FSA identifying the problems in 2006, the brothers had not taken any action.

The regulator also censured Edward for not delegating his responsibilities while he was away from the firm for a extended period.

‘Both directors lacked the competence and capability needed to make sure their firm delivered good quality mortgage advice,’ said Jonathan Phelan, head of retail enforcement at the FSA.

‘The failings were particularly serious because the FSA first identified problems with the firm’s systems and controls during a visit in 2006 and no steps were taken to remedy the situation by the time of the FSA’s visit in 2008.’

The FSA would have fined the two directors £15,000 each for their failure but because of ‘serious’ financial hardship they would be unable to pay.