Is it true that the FSA has fined mortgage brokers for not ensuring sales were suitable?

Yes. In 2007, the FSA undertook a project to assess the quality of mortgage advice processes within firms. As a result, the FSA has taken action against several mortgage brokers for failings in their sales processes which meant that customers were at risk of receiving unsuitable mortgage advice.

The FSA has also banned many mortgage brokers for submitting false or misleading mortgage applications to lenders.

Here’s just a summary of some of the firms that have been fined for breaches relating to mortgage advice:

• Thinc Group Limited – fined £900,000. The FSA found that the group had failed to obtain adequate financial information about some of its sub-prime mortgage customers before giving advice, failed to demonstrate that those customers' credit histories merited the sale of a sub-prime mortgage , failed to demonstrate why the particular sub-prime mortgage products that it recommended matched those customers' needs and circumstances and failed to demonstrate that it had considered the affordability of the sub-prime mortgage contracts that it recommended to those customers.
• Approved Financial Solutions Ltd (AFS) – fined £63,000 after it failed to ensure it gave suitable advice, and did not communicate accurate information about mortgage charges to its customers.
• Orchid Financial Limited – fined  £34,500 for failing to ensure it provided suitable advice which exposed over 900 customers to the risk of being sold an unsuitable mortgage.
• William John Evans and Gary Howes, directors of Abbey Mortgages Limited – fined £30,000 each.  They failed to check whether their customers had provided them with accurate information regarding self-certification mortgage applications. They also neglected to check the affordability and suitability of recommended mortgage contracts, exposing their customers to the risk of receiving unsuitable advice.
• Gillen Farrelly Independent Advisers Limited - fined £17,500 for failing to ensure it provided suitable advice which exposed over 80 customers to the risk of being sold an unsuitable self-certified mortgage.
• Countrywide Management Consultancy and trading as Property Compass (Countrywide) – fined £14,700
• The Mortgage House - fined £11,900
• The Minel Group Limited – fined £10,500 for exposing consumers to the risk of being sold an unsuitable equity release (lifetime) mortgage.
• Lawrence Scoffield Mortgages Limited – fined £10,500
• Council Homebuyers (Midlands and North) Limited – fined £10,500
• Select Mortgage Services - fined £10,500. 
• Chariot Mortgage Services Limited – fined £10,500.
• Chepstow Financial Services) £10,500.  The adviser relied too heavily on customers’ declarations that they could afford the mortgage contracts and did not satisfy the FSA that he had assessed the affordability of recommended mortgage contracts.