FCA fines insurance firm for poor sales practices: FCA has fined Stonebridge International Insurance Limited £8,373,600 in relation to sales of accident insurance products. It found that, for a period of over 18 months, the firm sold accidental death, accident cash plan and personal accident products to unqualified and inexperienced retail customers in the UK, Germany, France, Italy and Spain, using outsourced sales services. The customer base was middle-income but did not have degrees or professional qualifications and was identified from sales lists received from various business partners of the firm, who in turn received commission for providing the names. The firm employed outsourced sales staff, and encouraged them to sell more expensive products than were necessary and to discourage any customers from ringing up to cancel. FCA found the customers did not have fair, clear and balanced information and the firm's procedures lacked the systems and controls to ensure it treated customers fairly. FCA calculates that nearly half a million customers could be affected and the firm has already agreed to provide redress of around £400,000. (Source: FCA Fines Insurance Firm for Poor Sales Practices)
FCA says firms must improve credit promotions: FCA says promotions for consumer credit products often still do not meet its requirements of being clear, fair and not misleading. Since 1 April, it has reviewed over 1,500 financial promotions for consumer credit products and opened 227 cases about non-compliant promotions. The culprits are usually payday loans, debt management services and credit brokers. A quarter of the new cases relate to advertisements for high-cost short-term credit. FCA found many of these do not prominently display a risk warning or representative APR. The vast majority of the cases to date relate to digital media. FCA gave some examples of promotions it had found to be misleading, which included:
- debt management firm advertisements that did not make it clear the services were not free;
- promotions that claimed firms would provide credit regardless of customers’ circumstances;
- a logbook lender who, among other misleading information, implied its services were endorsed by FCA; and
- internet search terms that took consumers to unrelated sponsored links which may have misled customers into thinking there was a connection between the search term and the product.
(Source: FCA Says Firms Must Improve Promotions)