Lender fined over unfair charges
Sub-prime lender Kensington has received a £1.23 million fine and been ordered to return up to £1.07 million in unfair charges to customers.
The Financial Services Authority (FSA) uncovered "a number of serious breaches" at the lender, which affected around 16,000 customers.
Kensington's staff failed to treat customers in arrears fairly between January 2007 and October 2008, focusing on recovering money as quickly as possible rather than basing repayments on individual circumstances, according to the FSA.
The lender charged "excessive" fees for bounced direct debits regardless of how many times the payment had already been refused, and rolled up arrears fees and costs into early repayment charges, the watchdog added.
Customers who were charged for more than three bounced direct debits will receive an average of £25, with an average £37 returned for inflated early repayment charges.
Margaret Cole, the FSA's director of enforcement and financial crime, said: "This case should serve as a strong reminder to firms dealing with retail customers, especially customers in a vulnerable position such as those with mortgage arrears, that the FSA will take robust action where it sees that customers are not treated fairly."