Enforcement action
We have taken enforcement action against two motor retailers in relation to payment protection insurance. We have also taken action against other firms – including a credit card provider, a personal loan company and a home shopping company.
We use our disciplinary powers to take action against firms who are faliing or have failed to meet the standards required and protect the interest of consumers.
Action against motor retailers
Cathedral Motor Company ltd – Public censure in February 2007
The FSA imposed a public censure on Cathedral for failures relating to its sale of PPI in connection with vehicle finance agreements.
Cathedral failed to organise and control its regulated business responsibly and effectively.
In particular:
- There was limited or no monitoring of its staff and consequently it could not determine whether its sales staff paid due regard to the needs of customers.
- It did not sufficiently apportion compliance responsibilities among its senior management
- It did not ensure appropriate training of its staff.
- It failed to provide customers with certain key documents before conclusion of the sale, creating a risk of consumer detriment.
Eastern Western Motor Group – public censure in December 2006
The FSA imposed a public censure on Eastern Western for failures relating to its sale of PPI in connection with vehicle finance agreements.
EMWG failed to organise and control its regulated business effectively.
In particular:
- It did not keep an adequate record of the PPI sale on customers' files.
- It did not provide customers with a statement of the total price for the PPI policy.
- It did not sufficiently apportion compliance responsibilities among its senior management.
- It did not ensure adequate training and monitoring of its sales staff.
Action against other firms
GE Capital Bank ltd – fined £610,000
For: failing to have adequate systems and controls for selling insurance which includes PPI and for failing to treat its customers fairly.
Redcats (Brands) ltd – fined £270,000
For: failing to treat its customers fairly when selling PPI in connection with home shopping products.
The FSA found that Redcats did not have adequate systems and controls in place to minimise the risk of unsuitable sales.
For: failing to treat its customers fairly when selling PPI.
The FSA found that Loans.co.uk did not have appropriate systems and controls to minimise the risk of unsuitable sales.
Regency Mortgage Corporation ltd – fined £56,000
For: failures relating to its sale of mortgage related PPI in the sub prime market.