BOURNEMOUTH mortgage broker Leybridge Ltd has been fined £24,000 and censured by the Financial Services Authority (FSA) for keeping inadequate records and failing to ensure it provided suitable advice to its customers.

According to the FSA the Bath Road based business operation exposed 425 customers to the risk of being mis-sold a mortgage during the period between October 2004 (when the company was first established) and February 2008.

However, the FSA has waived the fine in order to ensure that Leybridge can afford to compensate customers who might have been disadvantaged.

Explaining the censure, the FSA says Leybridge failed to ensure that it made and retained adequate records of its customers' personal and financial information in a number of key areas and widespread record keeping failures led to the firm being unable to demonstrate that the advice given to customers was suitable.

The firm was also found to have employed inadequate file checking systems whereby sales advisers and mortgage processors would check each file for the existence of requisite documentation, not the standard of its completion.

Directors would then check only a sample of files and did not do so on a regular or adequate basis.

In its report the FSA said that customers who are employed and can prove their income most commonly take out full status mortgages.

However, Leybridge sometimes recommended self certification mortgages to such customers. In these circumstances Leybridge often recorded no explanation as to why this type of mortgage was recommended.

When Leybridge issued a letter of suitability to its customers detailing the reasons why a particular mortgage product had been recommended the reasons given were often generic and did not reflect the information contained within the fact find.

Margaret Cole, FSA Director of Enforcement, said: "Leybridge's record keeping was so poor that they could not demonstrate that the sales of mortgages were suitable and had no way of proving to us that the firm was treating its customers fairly."

In waiving the fine, the FSA said it had taken into account that Leybridge had been open and cooperated fully with the investigation and had accepted that there were management and control failures during the Relevant Period.

Leybridge also agreed to remedial action in the form of a customer contact exercise and has committed to compensate those who may have suffered any detriment as a result of Leybridge's failings.

Managing director David Dixey said that many of the aspects identified by the FSA had occurred during the early days when the company was first started.

"We have continued to learn as the business has grown and put in place measures to overcome the issues identified." During the period we rejected 20,000 mortgage applications where people could not fulfil the conditions which shows how selective our process is."

Leybridge is a limited company with three directors. During the relevant period, Leybridge employed three salespersons who between them advised on 425 mortgage contracts.

It was one of 50 mortgage brokers visited by the FSA's Small Firms and Contact Division (SFCD) in 2008 as part of a thematic project looking into the quality of advice processes' in mortgage brokers.