Thinc, an independent financial advice company owned by Axa, has been fined £900,000 by the Financial Services Authority for not taking reasonable care when advising on subprime mortgages.

The FSA said Thinc had failed to obtain adequate financial information about some of its customers for subprime mortgages; failed to show that their credit histories merited the sale of such mortgages; failed to demonstrate why particular products matched customer needs; and failed to consider their affordability.

Margaret Cole, FSA director of enforcement, said the level of the fine showed that “poor record keeping is a serious failing even where, as in this case, the FSA has not determined that the firm mis-sold subprime mortgages and there have been few complaints”.

The fine is the third imposed on an IFA firm in the wake of an FSA review of the subprime mortgage market published in July. In November The Loan Company and Next Generation Mortgages were fined £31,300 and £10,500 respectively for poor record keeping and systems control. Two other firms – Homebuyers’ Securities and Aidan Mortgage Consulting – were banned from selling further sub-prime mortgages.

Thinc, which was acquired by Axa in November 2006, said it had co-operated fully with the FSA. It was implementing a remedial plan to address its record-keeping, adviser training and vetting procedures.

John Simmonds, chief executive, said mortgages formed only 10 per cent of the overall business and sub-prime mortgages were a tiny proportion of the total mortgage business. Nevertheless, poor record keeping was not to be tolerated.

The FSA described Thinc’s failings as “particularly serious because its conduct could have had an adverse effect on the customers concerned”. Many were recorded as having adverse credit histories and were consolidating debts.

The failings were found to have taken place between January 1 2006 and September 30 last year. They continued after a visit from the FSA in February last year because, the FSA said, “the remedial action implemented by the firm was ineffective and the firm’s sales practices and compliance regime did not improve”.