Capital 1 fined by FSA over insurance sales
Credit card provider Capital 1 has been fined £175,000 by the Financial Services Authority (FSA) over the faulty sale of 50,000 payment protection insurance (PPI) policies between January 2005 and April 2006.
Capital 1 failed to provide full information to its customers about exclusions – that is, situations in which the policies would not pay out – and its sales scripts did not in the eyes of the FSA ensure adequate disclosure of the main features of the product.
In addition, Capital 1’s monitoring of the sales calls made by its staff was not “sufficiently effective”, and customers were not treated fairly during the calls, a failing that the FSA is particularly keen to stamp out in the personal finance industry.
“We consistently review our policies and practices and had made a number of significant improvements prior to the FSA’s investigation,” said Sanjiv Yajnik, chief executive, Europe, Capital 1.
Margaret Cole, FSA director of enforcement, said: “We will continue to crack down where we perceive firms to be treating their customers unfairly. There must be a level playing field in the provision of financial services and products to consumers.”
Last month, GE Bank was fined £610,000 for similar failings.