A firm of independent financial advisers, the Thinc Group, has been fined £900,000 for poor record-keeping when selling sub-prime mortgages. The Financial Services Authority (FSA) said the company could not prove it had given good advice to its customers.

The FSA’s enquiries found that staff at Thinc had failed to find out enough about the finances of their customers. Also, the firm’s paperwork could not show why the customers needed a sub-prime mortgage, why the particular deal they took was appropriate, or if the customers could afford to re-pay.

The FSA said that Thinc’s failings were particularly serious as many of the customers had a poor credit history. The problems continued even after a visit by the FSA because attempts to improve had failed and poor sales practices had continued. A review is now being carried out to see if any customers have in fact suffered financially and the firm has agreed to retrain or even sack any mortgage advisers who are not up to scratch.

Research by the FSA, published in March, found that applicants for sub-prime mortgages relied heavily on mortgage brokers for advice and were rarely in a position to shop around or check the advice they were being given.

The Bank of England today voted to keep interest rates at 5% by a margin of eight to one. This demonstrated further the banks focus on keeping inflation under control rather than offer respite to mortgage holders.

Various member of the monetary policy committee also indicated that there would not be another rate cut for several months yet.

Recent data showed the Consumer Prices Index (CPI) reached an annual rate of 3%, above the government’s own target of 2%. March’s 0.8% monthly rise in consumer prices was the steepest for nearly seven years.

There is some consolation though as rate cuts in previous months that were not immediately passed on to the consumer are beginning to make themselves felt, various high street lenders have cut their rates recently amid signs that banks are coming out of the state of panic brought on by the collapse of Northern Rock last year.