Dealers fined for insurance breaches
* Five dealers fined * Broke rules selling PPI * Total of 175,000 in fines...
Five car dealers have been handed fines of more than 175,000 for serious breaches in selling Payment Protection Insurance (PPI).
The Financial Services Authority (FSA) imposed the fines on:
• GK Group
• George White Motors Limited
• Park's of Hamilton (Holdings) Limited
• Ringways Garages Leeds
• Ringways Garages Doncaster
The companies sold PPI alongside car and motorbike loans.
The FSA found that:
• the firms failed to gather enough information about each customer (including pre-existing medical conditions, existing insurance cover and benefits received from employers), creating the unacceptable risk of unsuitable sales of PPI;
• the firms failed to monitor the quality of the advice given by sales staff and to ensure that appropriate sales processes were followed;
• one firm did not adequately assess whether customers were eligible to claim for benefits from the PPI policies they sold, and another did not assess complaints properly.
The FAS said 2175 customers were at risk of being sold unsuitable policies.
'Motor retailers that sell PPI have to meet the same standards as the rest of the financial services industry,' said Margaret Cole, FSA director of enforcement.
'All firms selling PPI must treat their customers fairly, including taking proper steps to make sure sales are suitable and customers are eligible to claim on the policy. Where we discover PPI failings, we will not hesitate to take tough action and impose higher penalties.'
The FSA said some of the firms have now stopped selling PPI and said the companies involved wrote to all affected customers and paid compensation where appropriate.