City watchdog bares teeth to fine GMAC and Swinton

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The Independent Online

Tens of thousands of mortgage and insurance customers will be entitled to compensation after the City regulator's investigations regarding unfair practices.

The Financial Services Authority (FSA) cracked the whip against mortgage lender GMAC-RFC last week, fining it £2.8m for failures in its handling of arrears and repossessions. More than 46,000 of its customers will receive refunds of £7.7m, plus interest, as a result of excessive charges and starting repossessions before fully considering alternatives.

But the FSA didn't leave things there. Insurance broker Swinton will offer refunds on more than 480,000 payment protection insurance policies. The broker has also been fined £770,000 for mis-selling PPI. "These were deliberate breaches," says Margaret Cole, director of enforcement and financial crime at the FSA. "Nearly half a million policies were sold to customers who didn't necessarily require them

Meanwhile, the watchdog has revealed that the total number of consumer financial complaints has risen by 2 per cent to 1.51 million. The number of grievances about misleading advice shot up by 19 per cent on 2008, year-on-year. Overall, the most complained-about products were banking and loans, with 854,253 complaints, while disputes over arrears-handling also rose by 41 per cent to 39,181.

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