FSA hands out record PPI fine
The Financial Services Authority (FSA), has dished out a seven-figure fine to HFC Bank for failing to meet required sales standards.
When examined by the FSA, 76% of the bank’s policies sold to customers were found to be single premium PPI policies for unsecured loans.The FSA issued HFC with a £1.1m fine, a record for PPI.
Payment Protection Insurance (PPI), which is available from a number of independent providers and does not have to be purchased alongside a loan or mortgage, covers any non-mortgage related loan repayments in the event of accident or illness that prevents you from earning.
Shane Craig, managing director of Paymentcare.co.uk, said. “Until the point-of-sale of unsecured loans and PPI are separated, consumers will continue to spend huge sums on protection that is inappropriate and overpriced. The only way borrowers can be sure they are getting what they need at the right price is to take the proactive approach of going to an independent provider rather than allowing themselves to be sold their lender’s own product.
“While appearing to be more bad publicity for what is a genuinely valuable form of consumer protection, the fine imposed on HFC Bank will hopefully be one of the last nails in the coffin of point-of-sale unsecured loan PPI and lead to greater transparency for all concerned.”