The Financial Services Authority continued its crackdown on the payment protection insurance (PPI) market yesterday, landing GE Capital with a £610,000 fine for potentially mis-selling cover to thousands of its store card customers.
GE provides store cards for dozens of the UK's high street retailers, including the likes of BhS, Top Shop and Debenhams, and also offers PPI policies to insure customers in the event that they are unable to pay their card bills.
The FSA said it was fining GE for failing to make it clear to store card customers that PPI was optional, adding that the company had also failed to provide its customers with adequate information when they had been sold PPI policies.
As well as a fine, GE may also be forced to pay compensation to hundreds of customers if it is deemed that they were inappropriately sold PPI. The group sells some 850,000 PPI policies a year and has millions of customers.
The FSA said GE, which is conducting a full review of its PPI sales procedures, would have been fined almost £900,000 had it not been for its co-operation with the authority.
Commenting on the fine yesterday, Margaret Cole, the FSA's director of enforcement, said: "Millions of people take out store cards every year. They need to know that PPI is almost always optional and should consider whether they need it before signing up.
"Our focus on payment protection insurance will remain very high this year. We are determined to see significantly better practice in PPI sales and will crack down where firms fail to treat their customers fairly."
The Office of Fair Trading is expected to refer the PPI market to the Competition Commission over the next few weeks, after its preliminary investigations revealed that consumers are rarely given the chance to shop around when they are sold a PPI policy.
Some 7 million PPI policies are sold every year and the market is estimated to be worth around £5.5bn.Reuse content