FINAL NOTICE




To:
Fastmoney.co.uk Limited

FRN:
424331

Address:
PO Box 3044




Newcastle-Under-Lyme



Staffordshire,



ST55 9DY

Date:
11 November 2011



1.
ACTION

1.1.
For the reasons given in this notice, the FSA hereby imposes on Fastmoney a financial
penalty of £28,000.

1.2.
Fastmoney agreed to settle at an early stage of the FSA’s investigation and qualified
for a 30% (Stage 1) discount under the FSA’s executive settlement procedures. Were
it not for this discount, the FSA would have imposed a financial penalty of £40,000.

2.
SUMMARY OF REASONS

2.1.
Fastmoney arranged regulated mortgage contracts, including regulated bridging loans,
on a non-advised basis for retail customers.

2.2.
Fastmoney failed to take reasonable care to organise and control its affairs responsibly
and effectively, in breach of Principle 3, by failing to:

(1)
establish a non-advised sales process which ensured that customers took out an
appropriate regulated mortgage contract and were treated fairly;

(2)
review adequately the competence of its sales representatives and take
appropriate action to ensure that they remained competent for their role; and

(3)
take reasonable steps to supervise its sales representatives so that they adhered
to the non-advised sales scripts and avoided giving personal recommendations
to customers.

2.3.
Fastmoney failed to pay due regard to the information needs of its customers and
communicate information to them in a way which was clear, fair and not misleading,
in breach of Principle 7, by:

(1)
failing to ensure that customers, particularly those who took out bridging
loans, had received and read initial disclosure documents and key facts
illustrations containing information about the mortgage product and associated
charges before Fastmoney proceeded with completing a mortgage application
on their behalf;

(2)
offering many customers one particular mortgage product based on its own
judgment of which of the available mortgages was cheapest, instead of
presenting all options to the customer in a fair and unbiased way (as required
for non-advised sales); and

(3)
failing to disclose adequately the cost to customers of its services. In
particular, it potentially caused financial detriment to a number of customers
by failing to provide clear, fair and not misleading information about
additional broker fees.

2.4.
Between August 2005 and March 2010, Fastmoney arranged 370 regulated mortgage
contracts and 18 regulated bridging loans.

2.5.
The FSA considers Fastmoney’s failings to be particularly serious because its
customers were typically financially unsophisticated people with an adverse credit
history who were seeking to obtain a loan at short notice to enable them to meet
financial liabilities and ongoing commitments. In some cases, customers needed to
obtain a loan urgently to avoid having their homes repossessed. Because of their
circumstances, the impact of poor financial decisions was magnified.

2.6.
The FSA also has taken into account the fact that Fastmoney stopped selling regulated
bridging loans and took steps to upgrade its compliance arrangements after the FSA
raised concerns.

2.7.
The FSA has concluded that the nature and seriousness of Fastmoney’s breaches
warrant a financial penalty of £40,000 (before discount). This action supports the
FSA’s statutory objectives of maintaining market confidence in the UK financial
system and securing the appropriate degree of protection for consumers.


3.
DEFINITIONS

3.1.
The definitions below are used in this Final Notice:

the “Act” means the Financial Services and Markets Act 2000

“DEPP” means the FSA’s Decision Procedures and Penalties Manual

“EG” means the FSA’s Enforcement Guide

“ENF” means the FSA’s Enforcement Manual

“Fastmoney” means Fastmoney.co.uk Limited

“the FSA” means the Financial Services Authority

“MCOB” means the Mortgages and Home Finance: Conduct of Business sourcebook
in the FSA Handbook

“Mr Latham” means Mr Simon John Latham

“Mr Mason” means Mr Stuart Mason

“the Principles” means the FSA’s Principles for Businesses

“the relevant period” means the period from August 2005 to March 2009

“the skilled person requirement notice” means the Requirement Notice issued to
Fastmoney on 17 December 2010 pursuant to section 166 of the Act

“SYSC” means the Senior Management Arrangements, Systems and Controls part of
the FSA Handbook.

4.
FACTS AND MATTERS

4.1.
Fastmoney is a small mortgage broker based in Newcastle-under-Lyme, Staffordshire.
It was authorised by the FSA on 26 August 2005 to arrange regulated mortgage
contracts. It does not have permission to give mortgage advice. On 5 August 2011,
Fastmoney at its own request voluntarily varied its permission to the effect that it has
ceased conducting FSA regulated activities.

4.2.
Fastmoney advertised its services on the internet and in national newspapers, targeting
customers who were unlikely to be able to get prime mortgages. It sold mortgages
nationally using the following non-advised sales process:

(1)
Fastmoney’s telesales staff received telephone calls from new customers and
asked questions from a script to gather basic information about the customers’
circumstances.

(2)
This information was passed to Fastmoney’s sales representatives, who
telephoned and/or visited customers and ran through another sales script in
order to establish the customers’ mortgage preferences and needs, with the aim
of producing quotations and a key facts illustration for an appropriate product.

(3)
With the customer’s permission, a representative visited the customer at their
home and provided the illustration, mortgage application and other
declarations to sign, one being a declaration that Fastmoney had not provided
advice, in order to submit the mortgage application.

4.3.
Between August 2005 and March 2010, Fastmoney arranged 370 regulated mortgage
contracts and 18 regulated bridging loans.

4.4.
Fastmoney was owned (through a holding company) by Simon Latham. Mr Latham
was approved by the FSA to perform the following controlled functions during the
relevant period at the Firm:

(1)
CF1 (Director) from 12 October 2005 to present;

(2)
CF3 (Chief Executive) from 26 August 2005 to 12 February 2008; and

(3)
CF8 (Apportionment and Oversight) from 4 October 2006 to 31 October 2007.

4.5.
Mr Latham also responsible for insurance mediation from 4 October 2006 to 31
October 2007.

4.6.
From 2 November 2007, Mr Latham delegated various senior management
responsibilities to an individual employee, Mr Mason. From time to time during that
period, Mr Mason held significant influence functions CF1 (Director), CF3 (Chief
Executive) and CF8 (Apportionment and Oversight) and was responsible for the day
to day running Fastmoney’s business.

4.7.
Mr Mason had worked for Mr Latham’s companies for five years, but had no previous
experience of holding a controlled function or senior management post and did not
have any qualifications in the financial services industry. He was given only limited
training by Mr Latham prior to taking on these responsibilities and there was no
formal monitoring of his performance.

4.8.
Fastmoney applied to the FSA to withdraw Mr Mason’s approval to perform
controlled functions. Mr Mason’s approval was withdrawn on 26 May 2009.

Skilled person’s report

4.9.
On 17 December 2010 the FSA issued the skilled person requirement notice requiring
Fastmoney to appoint a skilled person to produce a report on:

(1)
whether Fastmoney followed a compliant non-advised sales process and
treated customers fairly in selling regulated bridging loans; and

(2)
whether (and to what extent) Fastmoney charged customers additional broker
fees which were not disclosed to them clearly and fairly.

4.10. To date, neither part of the skilled person’s report has been completed.

4.11. In relation to the sales process, the skilled person has at this stage concluded that in
all cases it was unclear whether the bridging loan arranged by Fastmoney met the
customer’s needs and objectives or that sufficient information was provided to
customers before seeking their agreement to proceed with a bridging loan application.

4.12. In relation to the broker fees, the skilled person has at this stage stated that a number
of customers (in addition to 16 already identified by Fastmoney) had not been given
clear information about the fees charged by Fastmoney.

4.13. Fastmoney has agreed to complete the skilled person’s report, but has stated that it is
minded to challenge the findings as it believes that not all of the points it has raised
have been properly considered. As a result, the FSA does not regard Fastmoney’s
agreement to complete the skilled person’s report as a mitigating factor to be taken
into account when assessing Fastmoney’s conduct.

5.
FAILINGS

5.1.
The statutory and regulatory provisions and policy relevant to this Final Notice are
referred to in the Annex.

Non-advised sales process

5.2.
There were deficiencies in Fastmoney’s non-advised sales process which put
customers at risk of taking out mortgage contracts whose features, risks and costs they
did not sufficiently understand. In particular, Fastmoney:

(1)
failed to keep sufficient records to assess whether it had complied with the
requirement to issue an initial disclosure document to customers within five
days of the initial telephone contact;

(2)
could not demonstrate that it collected sufficient information about customers’
circumstances to enable it to identify appropriate and affordable mortgage
options;

(3)
did not present a selection of available mortgages to customers in a clear, fair
and not misleading way, so as to allow them to make their own informed
judgement as to which mortgage was most appropriate to their needs and
circumstances; and

(4)
could not demonstrate that customers had confirmed their awareness and
understanding of the risks associated with the mortgage that they applied for.

Sales of regulated bridging loans

5.3.
Fastmoney sold regulated bridging loans to 15 customers in circumstances where:

(1)
its non-advised sales scripts did not include the necessary questions about a
customer’s circumstances to allow representatives to identify a bridging loan
as an appropriate product for the customer;

(2)
it did not keep adequate records to demonstrate that its representatives
refrained from giving advice about bridging loans when conducting sales
discussions with customers;

(3)
it could not demonstrate that it applied a defined methodology for determining
whether selling a particular bridging loan from its limited lending panel was
the most appropriate outcome for the customer;

(4)
its non-advised sales scripts did not prompt sales representatives to provide
sufficient information about the features, risks and costs of a bridging loan -
and sufficient time to consider the information - before seeking agreement to
proceed with an application; and

(5)
it sought to rely on customers’ declarations that they understood the features
and risks of the bridging loan in circumstances where this was unlikely to have
been the case.

5.4.
The skilled person could not ascertain from Fastmoney’s records whether it had
followed compliant non–advised sales process or treated customers fairly in respect of
any of the bridging loan sales.

Training and competence

5.5.
Fastmoney failed adequately to review adequately the competence of its staff and take
appropriate action to ensure that they remained competent for their role. In
particular:

(1)
there was no process to assess the ongoing competence of senior management.
As a result, Fastmoney appointed Mr Mason to perform significant influence
functions at Fastmoney when he was not competent to perform these roles;

(2)
staff training sessions were organised periodically for sales representatives on
an ad hoc basis, but there was no system in place to assess the extent to which
these training sessions resulted in actual learning; and

(3)
there was no system for checking or ascertaining the competency or training
needs of any individual sales representative.

Supervision of sales representatives

5.6.
Fastmoney did not take reasonable steps to supervise its sales representatives so that
they adhered to the non-advised sales scripts and avoided giving personal
recommendations to customers.

(1)
Fastmoney did not keep records of its initial telephone contact or sales
discussions with customers, so was unable to check whether the sales
representatives adhered to the sales scripts;

(2)
Fastmoney did not employ any external compliance resource, and its own
internal compliance resource only began checking a significant sample of
customer files in 2008. Prior to that, only a handful of files were checked and
no-one at Fastmoney identified or rectified significant record keeping
deficiencies in Fastmoney’s sales records;

(3)
field representatives, whose roles during the relevant period varied from
conducting sales at customers’ homes to simply providing mortgage
applications and declarations to sign, were almost entirely unmonitored; and

(4)
Fastmoney relied heavily on its customers – who were typically financially
unsophisticated – to assess whether it had conducted a compliant and fair non-
advised sale, through the making of complaints. It was a significant failing
that the only mechanism which Fastmoney used to assess the quality of service
being provided to customers was customer complaints. In responding to the
FSA’s concerns about the charging of fees, Mr Latham explained that there
had been no complaints in that regard. In response to the skilled person’s
requirement to contact customers in order for redress to be assessed, he said
that to do so would encourage customers “to make complaints which may not
be a true reflection”.

Principle 7

5.7.
Fastmoney did not provide clear, fair and not misleading information to customers
about the nature of its service, nor the risks and features of the mortgage contracts that
it arranged.

5.8.
Mortgages were arranged for customers in some instances without them having been
provided with initial disclosure documents and/or key facts illustrations at the
appropriate time and where confirmations of Fastmoney’s fees were not signed.

5.9.
In the majority of cases it appeared that Fastmoney’s representatives only ever offered
the customer one mortgage from one lender, based on its own judgment on which of
the available mortgages was cheapest. It did not present all available options to the
customer in a clear, fair and not misleading way, as required by the non-advised sales
process.

5.10. Fastmoney also failed to disclose adequately the cost to customers of its services. In
particular, it may have caused financial detriment to some customers by failing to
provide clear, fair and not misleading information about additional broker fees
payable by the customer.

6.
SANCTION

6.1.
Having regard to the facts and matters, the FSA considers it appropriate and
proportionate in all the circumstances to impose a financial penalty on Fastmoney for
the breaches described above.

6.2.
The FSA’s policy on the imposition of financial penalties is set out in Chapter 6 of
DEPP, which forms part of the FSA Handbook. The relevant sections of DEPP are set
out in more detail in the Annex. In addition, the FSA has had regard to the

7


corresponding provisions of Chapter 13 of ENF in force during part of the relevant
period until 27 August 2007 and Chapter 7 of EG, in use thereafter.

6.3.
The principal purpose of a financial penalty is to promote high standards of regulatory
conduct by deterring firms which have committed breaches from committing further
breaches, and helping to deter other firms from committing similar breaches, as well
as demonstrating generally the benefits of compliant behaviour.

6.4.
DEPP 6.5.2G sets out a non-exhaustive list of factors that may be of relevance in
determining the level of a financial penalty. The FSA considers that the following
factors to be particularly relevant in this case.

Deterrence (DEPP 6.5.2G(1))

6.5.
The financial penalty will reinforce the message that the FSA expects authorised firms
to take reasonable care to organise and control their affairs responsibly and
effectively, with adequate risk management systems, so as to ensure that they pay due
regard to the interests and information needs of customers.

The nature, seriousness and impact of the breach in question (DEPP 6.5.2G(2))

6.6.
In determining the appropriate sanction, the FSA has had regard to the seriousness of
the breaches, including the nature of the requirements breached and the duration of
the breach.

6.7.
The FSA considers Fastmoney’s failings to be particularly serious because its
customers were typically financially unsophisticated people with an adverse credit
history who were seeking to obtain a loan at short notice to enable them to meet
financial liabilities and ongoing commitments. In some cases, customers needed to
obtain a loan urgently to avoid having their homes repossessed. Because of their
circumstances, the impact of poor financial decisions was magnified.

6.8.
The FSA has taken into account, as a mitigating factor, that Fastmoney ceased
transacting regulated bridging loans as soon as the FSA raised concerns about these
transactions.

The extent to which the breach was deliberate or reckless (DEPP 6.5.2G(3))

6.9.
The FSA has found no evidence to show that Fastmoney acted in a deliberate or
reckless manner.

The size, financial resources and other circumstances of the firm (DEPP
6.5.2G(5))

6.10. The FSA has found no evidence to suggest that Fastmoney will be unable to pay the
penalty.

Disciplinary record and compliance history (DEPP 6.5.2(9))

6.11. Fastmoney has not been the subject of previous disciplinary action.

Other action taken by the FSA (DEPP 6.5.2G(10))

6.12. In determining the level of financial penalty, the FSA has taken into account penalties
imposed by the FSA on other authorised firms for similar breaches.

6.13. Having considered all the circumstances set out above, the FSA has determined that
£40,000 (before any discount for early settlement) is an appropriate financial penalty
to impose on Fastmoney.

7.
PROCEDURAL MATTERS

Decision makers

7.1.
The decision which gave rise to the obligation to give this Notice was made by the
Settlement Decision Makers.

7.2.
This Final Notice is given under, and in accordance with, section 390 of the Act.

Manner and time for payment

7.3.
The financial penalty must be paid by Fastmoney to the FSA in three monthly
instalments, the first instalment being a payment of £2,700 within three months of the
date of the Final Notice (being 11 February 2012), followed by eleven further
payments of £2,300 at three monthly intervals thereafter, with the total amount of the
financial penalty to be paid within three years of the Final Notice.

If the financial penalty is not paid

7.4.
If all or any part of an instalment is outstanding on the day after it is due to be paid,
the FSA may recover the outstanding amount as a debt owed by Fastmoney and due to
the FSA.

Confidentiality and publicity

7.5.
Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of information
about the matter to which this notice relates. Under those provisions, the FSA must
publish such information about the matter to which this notice relates as the FSA
considers appropriate. The information may be published in such manner as the FSA
considers appropriate. However, the FSA may not publish information if such
publication would, in the opinion of the FSA, be unfair to Mr Latham or prejudicial to
the interests of consumers.

7.6.
The FSA intends to publish such information about the matter to which this Final
Notice relates as it considers appropriate.

FSA contacts

7.7.
For more information concerning this matter generally, Fastmoney should contact
Rachel West (direct line: 0207 066 0142; fax: 020 7066 0143) of the Enforcement and
Financial Crime Division of the FSA.

Tom Spender
FSA Enforcement and Financial Crime Division



ANNEX

STATUTORY PROVISIONS, REGULATORY GUIDANCE AND POLICY

1.
Statutory provisions

1.1.
The FSA’s regulatory objectives are set out in section 2(2) of the Act and include
maintaining confidence in the financial system and the protection of consumers.

1.2.
Section 138 of the Act provides that the FSA may make such rules applying to
authorised persons as appear to it to be necessary or expedient for the purpose of
protecting consumers.

1.3.
The FSA has the power, pursuant to section 206 of the Act, to impose a financial
penalty of such amount as it considers appropriate where the FSA considers an
authorised person has contravened a requirement imposed on him by or under the Act.

2.
The Principles

2.1.
The FSA has published the Principles which apply either in whole, or in part, to all
authorised firms.

2.2.
The Principles are a general statement of the fundamental obligations of firms under
the regulatory system and reflect the FSA’s regulatory objectives. A firm may be
liable to disciplinary sanction where it is in breach of the Principles. The Principles
relevant to this matter are.

(1)
Principle 3 - a firm must take reasonable care to organise and control its affairs
responsibly and effectively, with adequate risk management systems.

(2)
Principle 7 - a firm must pay due regard to the information needs of its clients,
and communicate information to them in a way which is clear, fair and not
misleading.

2.3.
The FSA’s statutory objectives are set out in section 2(2) of the Act and include the
protection of consumers.

2.4.
The FSA has the power, pursuant to section 206 of the Act, to impose a financial
penalty of such amount as it considers appropriate where the FSA considers an
authorised person has contravened a requirement imposed on him by or under the Act.

3.
DEPP

3.1.
DEPP came into effect on 28 August 2007. Although the references in this Final
Notice are to DEPP, the FSA has also had regard to the appropriate provisions of the
FSA’s Enforcement Manual, which preceded DEPP and applied during part of the
relevant period.

3.2.
The FSA’s policy on the imposition and amount of penalties that applied up to 5
March 2010 was set out in Chapter 6 of DEPP.

3.3.
DEPP 6.1.2G provides that the principal purpose of imposing a financial penalty is to
promote high standards of regulatory and/or market conduct by deterring persons who
have committed breaches from committing further breaches, helping to deter other
persons from committing similar breaches, and demonstrating generally the benefits
of compliant behaviour. Financial penalties are therefore tools that the FSA may
employ to help it to achieve its regulatory objectives.

3.4.
DEPP 6.5.1G(1) provides that the FSA will consider all the relevant circumstances of
a case when it determines the level of financial penalty (if any) that is appropriate and
in proportion to the breach concerned.

3.5.
DEPP 6.5.2G sets out a non-exhaustive list of factors that may be relevant to
determining the appropriate level of financial penalty to be imposed on a person under
the Act. The following factors are relevant to this case:

Deterrence: DEPP 6.5.2G(1)

3.6.
When determining the appropriate level of financial penalty, the FSA will have regard
to the principal purpose for which it imposes sanctions, namely to promote high
standards of regulatory and/or market conduct by deterring persons who have
committed breaches from committing further breaches and helping to deter other
persons from committing similar breaches, as well as demonstrating generally the
benefits of compliant business.

The nature, seriousness and impact of the breach in question: DEPP 6.5.2G(2)

3.7.
The FSA will consider the seriousness of the breach in relation to the nature of the
rule, requirement or provision breached, which can include considerations such as the
duration and frequency of the breach, whether the breach revealed serious or systemic
weaknesses in the person’s procedures or of the management systems or internal
controls relating to all or part of a person’s business and the loss or risk of loss caused
to consumers, investors or other market users.

The extent to which the breach was deliberate or reckless: DEPP 6.5.2G(3)

3.8.
The FSA will regard as more serious a breach which is deliberately or recklessly
committed, giving consideration to factors such as whether the person has given no
apparent consideration to the consequences of the behaviour that constitutes the
breach. If the FSA decides that the breach was deliberate or reckless, it is more likely
to impose a higher penalty on a person than would otherwise be the case.

The size, financial resources and other circumstances of the person on whom the
penalty is to be imposed: DEPP 6.5.2G(5)

3.9.
The degree of seriousness of a breach may be linked to the size of the firm. For
example, a systemic failure in a large firm could damage or threaten to damage a
much larger number of consumers or investors than would be the case with a small
firm: breaches in firms with a high volume of business over a protracted period may

be more serious than breaches over similar periods in firms with a smaller volume of
business.

3.10. In addition, the size and resources of a person may also be relevant in relation to
mitigation, in particular what steps the person took after the breach had been
identified; the FSA will take into account what it is reasonable to expect from a
person in relation to its size and resources, and factors such as what proportion of a
person's resources were used to resolve a problem.

The amount of benefit gained or loss avoided: DEPP 6.5.2G(6)

3.11. The FSA may have regard to the amount of benefit gained or loss avoided as the
result of the breach, for example the FSA will impose a penalty that is consistent with
the principle that a person should not benefit from the breach, and the penalty should
also act as an incentive to the person (and others) to comply with regulatory standards
and required standards of market conduct.

Conduct following the breach: DEPP 6.5.2G(8)

3.12. The FSA may take into account the degree of co-operation the person showed during
the investigation of the breach by the FSA any remedial steps taken since the breach
was identified, including whether these were taken on the person's own initiative or
that of the FSA, for example, identifying whether consumers or investors or other
market users suffered loss and compensating them where they have and taking steps
to ensure that similar problems cannot arise in the future.

Other action taken by the FSA (or a previous regulator): DEPP 6.5.2G(10)

3.13. The FSA seeks to apply a consistent approach to determining the appropriate level of
penalty. The FSA may take into account previous decisions made in relation to similar
misconduct.

FSA guidance and other published materials: DEPP 6.5.2G(12)

3.14. A person does not commit a breach by not following FSA guidance or other published
examples of compliant behaviour. However, where a breach has otherwise been
established, the fact that guidance or other published materials had raised relevant
concerns may inform the seriousness with which the breach is to be regarded by the
FSA when determining the level of penalty.