Insurance broking giant fined £7m for mis-selling 'extras'
Britain’s biggest high street insurer Swinton was slapped with a £7.38m fine after it was caught mis-selling “add-on” insurance to more than 650,000 people.
The Financial Conduct Authority said the insurer’s “aggressive sales strategy” helped it pocket an extra £92.9m from customers by flogging optional monthly extras such as personal accident insurance or home emergency and motor breakdown policies.
But Swinton, which runs a 500-strong UK branch network, didn’t tell customers the extra cover was optional when it sold it between April 2010 and April 2012.
Tracey McDermott, director of enforcement and financial crime at the FCA, said Swinton failed its customers. “When selling monthly add-on policies, Swinton did not place the consumer at the heart of its business. Instead it prioritised profit,” she said.
Swinton has been forced to allocate £11.2m to repay people who were mis-sold. Some £1.9m has already been paid out but policyholders who think they bought monthly cover as a result of mis-selling should contact the company.
The City watchdog’s record fine since taking over regulatory responsibility in April was because the insurer did not explain the cover clearly. It also failed to give enough information about the terms of the policy, including the conditions and limitations. Damningly, the FCA said the nature of the failings, particularly poor sales scripts, meant that every sale could have been a mis-sale.
Which? executive director, Richard Lloyd, said: “It’s good to see the FCA handing out a hefty fine, which sends a very clear message to the insurance industry that mis-selling won’t be tolerated.”
Swinton’s chief Christophe Bardet said: “We apologise for these shortcomings. They were not compatible with the proud history of Swinton.”
Biggest Fines in 2013
£87.5m, Royal Bank of Scotland, February, Libor rigging
£30m, Prudential, March, failing to inform FSA of acquisition plans
£9.5m, UBS, February, failings in its sale of an AIG fund
£7.4m, Swinton, July, mis-selling “add-on” insurance
£6m, Sesame, June, failing to ensure advice was suitable
£4.3m, Lloyds, February, delayed PPI redress payments
£4.2m, EFG Private Bank, March, anti-money laundering failings
£3.1m, JPMorgan, May, systems and control failings
£2.8m, Policy Administration, July, poor complaints handling
- 1 Double chins could be 'cured' without surgery or dieting using new injection
- 2 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 5 Thank heavens for Louise Mensch and her foul-mouthed tweets to world leaders
Scientists discover way to unboil an egg – and the results are not as pointless as that sounds
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
iJobs Money & Business
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...