In another demonstration that the Financial Services Authority means business when it comes to stamping down on firms which fall below the standards expected when selling payment protection insurance (PPI) five motor dealers have been fined a total of more that £175,000.
GK Group Limited, George White Motors Limited, Ringways Garages (Leeds) Limited, Ringways Garages (Doncaster) Limited and Park’s of Hamilton (Holdings) Limited have been fined by the FSA for breaches relating to the sale of PPI alongside loans for cars or motorbikes. A total of 2175 customers were subsequently put at risk as a result of these breaches.
The FSA has published a press notice which identifies some of the shortcomings of these firms. These include:
- Failure on the part of the dealers to gather adequate information in relation to each customer (such as pre-existing medical conditions, existing insurance cover and benefits from employers) prior to selling PPI which put the customer at risk of unsuitable sales of PPI.
- The failure by the dealers to monitor the quality of the advice given by sales staff in relation to PPI as well as a failure to follow sales procedures correctly.
- One of the firms did not adequately assess whether customers were eligible to claim benefits from the PPI policies that were sold.
The FSA has warned motor dealers that they are expected to meet the same regulatory standards as financial services firms when selling PPI products, and must treat their customers fairly.
A 30 per cent reduction in the penalty was available to the dealers for settling at an early stage of investigation.
For further information: FSA fines five motor dealers for PPI failings