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Store card providers slated by the FSA

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31/01/2007

Many of the top store card providers have been slated by the Financial Services Authority (FSA) for failings in the selling of card protection insurance policies.

The main stores affected are Debenhams, Mothercare, Miss Selfridge, TopShop, B&Q and Asda, and holders of store cards with these retailers could be in line for refunds.

The insurance that has come under the FSA’s scrutiny is payment protection insurance (PPI) that may have been inappropriate in the eyes of the regulator.

It is a highly profitable sideline for lenders and retailers and is widely regarded to be mis-sold to people who do not need it and cannot claim on it in any event.

The FSA has also fined GE Capital Bank – the company that runs the cards on behalf of retailers – £610,000 for not meeting the required standards in selling PPI. The regulator found that key details of the policies were not explained to customers properly.

“Millions of people take out store cards every year,” said the FSA’s director of enforcement, Margaret Cole. “They need to know that PPI is almost always optional and that they should consider carefully before signing up to it.

“We are determined to see significantly better practice and will crack down where firms fail to treat their customers fairly.”

 

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