FSA issues £56,000 PPI mis-selling fine

The financial Services Authority (FSA) has taken its first action against a lender over complaints relating to the sale of payment protection insurance (PPI).

The authority ordered Regency Mortgage Corporation, a specialist lender dealing with people with credit problems, to pay £56,000 over mis-selling and fair dealing complaints.

The company had failed to ensure that their customers met the requirements of the policy before sale and management of policies and claims was poor, said the FSA.

PPI has been the subject of a damning consumer campaign, with watchdogs finding that policies are frequently mis-sold and rarely pay out on the terms buyers are led to believe.

They are also often packaged with loan applications without informing customers, drastically affecting the advertised best rate of borrowing.

In the case of Regency, borrowers were often sold policies covering areas for which they already had cover or which they would be ineligible to claim for.

Internal oversight and record keeping also fell far short of the required standard and senior management remained uninformed of the risks in the PPI sales department.

© Adfero Ltd

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