The Financial Services Authority (FSA) has levied a record £900,000 fine on one of the biggest independent financial adviser (IFA) groups for serious failures in selling sub-prime mortgages.

The watchdog said that Thinc Group, the mortgage broker, was guilty of poor record-keeping and failing to prove that the sub-prime loans it had sold were suitable for the customers who took them out.

The fine is the biggest imposed for sub-prime failings by the FSA since it began mortgage regulation in 2004. It comes almost a year after it concluded its original investigation into the sub-prime market, when it referred five companies for enforcement. Of the four others, The Loan Company was fined £31,000, Next Generation £10.500 and Homebuyers Security Ltd and Aidan Mortgage Consultants had their permits rescinded.

The clampdown follows warnings that the UK is in danger of its own US-style sub-prime crisis. Some brokers and lenders, who typically make more profit from the sale of sub-prime rather than prime mort-

gages, have been accused of selling sub-prime deals to borrowers who did not need them. Although the FSA did not accuse Thinc of mis-selling, it said that the broker was guilty of “failure to demonstrate” why customers' credit histories merited the sale of a sub-prime mortgage, why a sub-prime deal matched those customers' needs and whether it had taken taken into account customers' ability to afford the mortgage it recommended.

Thinc, which will continue to trade subject to review by an independent third party, said that it regretted its failings and was undergoing a “comprehensive remedial plan addressing record-keeping processes, adviser training and vetting procedures for non-prime mortgages”. Axa bought Thinc, which is a top-five IFA group, in November 2006.