RBS fined 14.5 million pounds

Royal Bank of Scotland has been fined £14.5million after the City regulator found serious failings in the advice the bank was giving to its mortgage customers.

The Financial Conduct Authority reviewed 164 sales between June 2011 and March 2013. It found that only 2 of these sales were considered to meet the standard required in a sales process.

The regulator concluded that RBS and its retail arm Natwest failed to properly consider the customer's budget when offering their advice. It also questioned the staff's ability to determine which mortgage term was appropriate for their customers.

Although there is no evidence of widespread detriment to the customers of the bank, RBS is due to contact around 30,000 of its customers to inform them of the report's findings.

The bank has also confirmed that it has since overhauled its mortgage sales procedures and retrained all mortgage advisors.

Concerns were originally raised back in November 2011, when the precursor to the FCA, the Financial Services Authority, raised concerns about branch and telephone sales at Natwest and RBS. However it was almost a year later that any action was taken.

RBS made a loss of £8.2 billion last year, but has secured a pre-tax profit of £2.65 billion for the first half of this year, thanks to a buoyant economy.

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Mandy Peters

London Property Solicitors