Loans.co.uk handed PPI fine
The Financial Services Authority has fined Loans.co.uk £455,000 for failing to treat its customers fairly when selling payment protection insurance (PPI). The FSA found that the company did not have the appropriate systems and controls in place to lessen the risk of making unsuitable sales. Loans.co.uk sold PPI over the telephone, but did not gather and record information to show that the recommendations it made were suitable. Customers did not receive enough information to make an informed decision about the PPI policy being offered and therefore could not be sure they were recommended the right option for them. This was estimated to affect approximately 14,400 customers.
Margaret Cole, FSA Director of Enforcement said: ‘We have highlighted Payment Protection Insurance as an FSA priority due to the potential level of risk to consumers. Loans.co.uk Limited failed to make sure adequate processes were in place to ensure the suitability of its PPI recommendations and treat its customers fairly. The principle of Treating Customers Fairly should be embedded in firms’ business models to help prevent such failings and it is important that all firms review their systems and controls to reach this standard.’
The FSA also found that the company did not have appropriate compliance monitoring procedures in place to identify failings in the sales process and there was no guidance to staff on how to identify and handle a complaint.
Stephen Hayes, CEO of Loans.co.uk commented: ‘Loans.co.uk is committed to providing its customers with a high level of service. We co-operated fully with the FSA and undertook an internal audit review to ensure effective and timely resolution of the issues identified. New practices have been in place for the past six months’.