RBS Fined Over Mortgage Advice Failings

By Ian Walker 

LONDON--The U.K. financial regulator has fined Royal Bank of Scotland Group PLC GBP14.47 million ($24 million) for "serious failings" related to the mortgage advice it gave customers.

The Financial Conduct Authority said Wednesday that the bank, and its Natwest division, failed to consider a customer's budget when making a mortgage recommendation, failed to advise customers who were looking to consolidate debt properly and didn't advise customers what mortgage term was appropriate for them.

However, the regulators said there was no current evidence this has caused widespread detriment to customers.

Tracey McDermott, director of enforcement and financial crime at the FCA said: "We made our concerns clear to the firms in November 2011 but it was almost a year later before the firms started to take proper steps to put things right. Where we raise concerns with firms we expect them to take effective action to resolve them without delay. This simply failed to happen in this case."

RBS and Natwest agreed to settle at an early stage and qualified for a 30% stage one discount. Were it not for this discount the fine would have been GBP20.68 million, the FCA said.

Write to Ian Walker at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires