A financial salesman who arranged sale and rent-back deals and lied about property values has been fined nearly £1m by the Financial Conduct Authority for misleading customers. It is the largest ever fine for a sole trader.
Gurpreet Singh Chadda traded under the names Red2Black Homes and B&L Homes. The FCA looked at seven sale and rent back deals – where a homeowner sells their home and rents it back from the arranger – between June 2009 and January 2010, and found serious failings in all of them.
Tracey McDermott, the director of enforcement and financial crime at the FCA, said: "Chadda's misconduct is the most shocking we have seen from a home finance arranger. "
Mr Chadda told customers he would be buying their homes when in fact the purchasers were other people. He failed to tell those selling their homes that the purchasers were not authorised, which meant they were not covered by regulatory protections. He also fabricated a mortgage valuation to make it look as though the seller's property was worth much less than its real value. He has been banned from working in the financial services industry.