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| FCA fines rogue property trader nearly £1m | FCA fines rogue property trader nearly £1m |
| (4 months later) | |
| The operator of a property scheme who misled vulnerable customers to make money from the sale of their homes has been fined almost £1m by the City regulator and banned from working in the financial services industry. | The operator of a property scheme who misled vulnerable customers to make money from the sale of their homes has been fined almost £1m by the City regulator and banned from working in the financial services industry. |
| Gurpreet Singh Chadda ran sale-and-rent-back schemes under the names Black Homes and B&L through which he bought properties from homeowners in financial difficulty and allowed them to continue to live in them while paying rent. | Gurpreet Singh Chadda ran sale-and-rent-back schemes under the names Black Homes and B&L through which he bought properties from homeowners in financial difficulty and allowed them to continue to live in them while paying rent. |
| While it is not unusual for such schemes to pay less than the market value for a property, the Financial Conduct Authority (FCA) found that Chadda had faked valuations and exaggerated legal costs to maximise the amount he made from each transaction. In two cases examined by the FCA, sellers only received 38% of the sale price of their homes. | While it is not unusual for such schemes to pay less than the market value for a property, the Financial Conduct Authority (FCA) found that Chadda had faked valuations and exaggerated legal costs to maximise the amount he made from each transaction. In two cases examined by the FCA, sellers only received 38% of the sale price of their homes. |
| Chadda also failed to inform sellers that he had found separate purchasers for them who were paying the full price and in some cases he kept more than half the cash. | Chadda also failed to inform sellers that he had found separate purchasers for them who were paying the full price and in some cases he kept more than half the cash. |
| The FCA said it believed he had received £695,277 from the seven transactions it examined, and that these charges were unfair and excessive. | The FCA said it believed he had received £695,277 from the seven transactions it examined, and that these charges were unfair and excessive. |
| It also found that he had helped the purchasers of the properties obtain mortgages by disguising the fact that the sellers would continue to live there. In one case he drafted a letter for a buyer to pass to their lender saying the seller would be moving out. | It also found that he had helped the purchasers of the properties obtain mortgages by disguising the fact that the sellers would continue to live there. In one case he drafted a letter for a buyer to pass to their lender saying the seller would be moving out. |
| Handing down its largest-ever fine to a sole trader, totalling £945,277, the FCA said Chadda had aggravated the situation by making false and misleading statements, failing to disclose relevant documents and information and creating misleading documents. It said he had also arranged for people to impersonate his customers to mislead the regulator. | Handing down its largest-ever fine to a sole trader, totalling £945,277, the FCA said Chadda had aggravated the situation by making false and misleading statements, failing to disclose relevant documents and information and creating misleading documents. It said he had also arranged for people to impersonate his customers to mislead the regulator. |
| Tracey McDermott, the FCA's director of enforcement and financial crime, said Chadda represented "a serious risk to customers and lenders alike". | Tracey McDermott, the FCA's director of enforcement and financial crime, said Chadda represented "a serious risk to customers and lenders alike". |
| She said: "Chadda's misconduct is the most shocking we have seen from a home finance arranger. He is a disgrace to financial services." | She said: "Chadda's misconduct is the most shocking we have seen from a home finance arranger. He is a disgrace to financial services." |
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