The Royal Bank of Scotland and NatWest have been fined £14,474,600 by the banking regulator for serious failings in their advised mortgage sales business.

In two reviews of sales from 2012 the Financial Conduct Authority (FCA) found that in over half the cases the suitability of the advice was not clear from the file or call recording.

Failings included customers’ budgets not being properly looked at in affordability assessments, customers who wanted to consolidate debt not being advised properly, and customers not receiving advice on what mortgage term was best for them.

Only two of the 164 sales reviewed were considered to meet the required standard.

The banks’ own mystery shopping found examples of advisers giving personal views on the future movement of interest rates – a “highly inappropriate” action which could have resulted in the borrower being sold the wrong type of mortgage for them, the regulator said.

The banks did not adequately address the failings when concerns were raised about the quality of the advice process by the FCA’s predecessor the Financial Services Authority (FSA). This resulted in customers being placed at risk for an even longer period.

The FCA’s Tracey McDermott said: “Taking out a mortgage is one of the most important financial decisions we can make. Poor advice could cost someone their home so it’s vital that the advice process is fit for purpose.

“Both firms failed to ensure that their customers were getting the best advice for them.”

The firms have agreed to contact around 30,000 consumers who received mortgage advice in the relevant period, to allow them to raise any concerns.