27 August 2008 by Mary Heaney
FSA cracks down on payment protection mis-selling
Five car dealers have been fined a total of £175,000 by the FSA for mis-selling PPI insurance.
Five car dealers have been fined a total of £175,000 as part of the Financial Services Authority’s (FSA) campaign against the mis-selling of payment protection insurance (PPI), bringing the tally of PPI mis-selling fines up to £3.9 million.
GK Group Limited, George White Motors Limited, Ringways Garages (Leeds) Limited, Ringways Garages (Doncaster) Limited and Park’s of Hamilton (Holdings) Limited settled at an early stage of the FSA’s investigations for a total of £175,000. The businesses stood accused of failing to have the proper procedures in place to ensure that policies were not mis-sold. This included failing to gather enough information about customers and to monitor the quality of advice given.
If a borrower becomes unable to pay back their loan, due to illness or job loss, PPI is supposed to cover the repayments. However there are concerns that the policy is often sold to people who cannot necessarily claim such as the self-employed.
Margaret Cole, FSA Director of Enforcement, has said that “PPI remains a top priority for the FSA in 2008 and beyond. We will not hesitate to take tough action and impose higher penalties.”