Record fine for Birmingham-based home finance trader
A home finance arranger has been fined nearly £1m, a record sum, for misleading homeowners when selling and renting back their properties.
Birmingham-based Gurpreet Singh Chadda, who traded under Red2Black Homes and B&L Homes, falsified valuations, the Financial Conduct Authority (FCA) said.
He was fined a record amount for a sole trader. The FCA estimated he pocketed about £700,000 in seven deals.
The case has been referred to West Midlands Police.
The home finance arranger was also banned from working in the financial services industry.
'Excessive hidden fees'
He falsified valuations to deceive homeowners that their properties were worth less than their real value - in some cases sellers received 38% of the true sale price of their homes, according to the authority.
It said Mr Chadda, who arranged for clients to sell properties and lease them back to carry on living in their homes, deliberately misled homeowners for his own gain.
He also told clients he would be buying their homes, when the purchases were made by other people, while further misleading mortgage providers unaware the deals were sale and rent back transactions, it added.
Although the sellers expected to get a discounted price for their properties, they were often charged "grossly unfair and excessive hidden fees" and were also unaware Mr Chadda was receiving the full price for the properties from the purchasers.
He also made false and misleading statements to the FCA, failed to disclose relevant documents and information and created misleading documents.
The FCA also said Mr Chadda arranged for people to impersonate his customers in an attempt to mislead the regulator.
Director of enforcement and financial crime Tracey McDermott said his misconduct was the "most shocking we have seen from a home finance arranger".
She added: "He is a disgrace to financial services.
"He presents a serious risk to customers and lenders alike with his dishonest and unscrupulous actions.
"The unprecedented level of the fine for a sole trader reflects our determination to deprive him of the gains he made as a result of his misconduct."