Cheshire Mortgage Corporation fined £1.22m by watchdog
A mortgage company from Greater Manchester, which overcharged borrowers with arrears, may have to pay out more then £2m to 2,000 customers.
The Financial Services Authority (FSA) has fined the Cheadle-based Cheshire Mortgage Corporation Ltd £1.22m for failing to treat its customers fairly.
Its chief executive and director of compliance were also fined.
The company said the issues related to the period 2004-9 and it had revised its procedures since then.
Its chief executive Henry Moser, was fined £70,000 and agreed to resign within three to six months.
Andrew Lawton, its compliance director, was fined £13,500 and banned from holding a "significant influence function".
The FSA also ordered the company to check which customers may be owed money which could see more than £2m going to 2,000 customers.
Tracey McDermott, FSA director of enforcement and financial crime, said: "CMCL's lacklustre approach to regulation, combined with very poor practices in collecting arrears, meant that some customers already worried about being able to pay back their mortgages were put under undue pressure and sometimes ended up paying more than they should.
"The failings of Moser, Lawton and CMCL were serious and let down a vulnerable group of consumers."
The FSA also found that some customers only found out about charges after they were imposed, while others with arrears were charged an extra £150 for dealing with an in-house debt collecting company.
A company statement apologised to customers, adding it "has been actively contacting those customers to ensure that matters are appropriately addressed in a timely manner".