The defendants were found arranging high-interest, unaffordable bridging loans
The Financial Conduct Authority (FCA) has obtained a High Court judgement against firms and individuals for placing mortgages without the regulator’s authorisation and exploiting vulnerable customers who were in financial difficulty.
The legal judgement found that the defendants – London Property Investments Limited (LPI), NPI Holdings Limited, their director Daniel Stevens and his father, Tony Stevens – responsible for arranging high-interest, unaffordable bridging loans for consumers about to be evicted from their homes.
The regulator said that in some cases, the defendants bought homes for less than their value from owners who were facing repossession, and then rented the properties back to these consumers. The defendants were not authorised to arrange mortgage contracts or sale and rent back agreements.
The court described the breaches as “exploitative of vulnerable individual consumers” and found that they were undertaken “to obtain significant personal gain.”
LPI will now be required to remove around 22 restrictions registered against individuals’ properties, which were used by the defendants to force the individuals to pay exorbitant fees to the company.
“These companies and individuals were not just providing financial services without proper authorisation, they were doing it to take advantage of people who were struggling and in vulnerable circumstances,” Mark Steward, executive director of enforcement and market oversight at the Financial Conduct Authority, said. “Their actions cost consumers large amounts of money in fees, inflated loan interest and lost equity in their homes. This judgement will help bring financial relief to these consumers.”
In July 2020, the FCA obtained an interim injunction and a freezing order to stop these activities and freeze residential properties and other assets owned by Tony and Daniel Stevens and the two companies. A later trial will consider remedies, including compensation for affected individuals, as well as hear evidence regarding up to 88 further potentially affected individuals who were not part of the FCA’s first claim.