Finance company fined over PPI

Another company has been fined over the mis-selling of payment protection insurance, with a fine of one hundred and seventy five thousand pounds being enforced by the Financial Services Authority.

The FSA announced last week that Capital One was the latest in a line of UK banks and financial companies to face fines over matters relating to the sales of protection insurance on loans and credit cards.

Capital One is the fifth bank to be fined by the Financial Services Authority over PPI sales, and has been accused of mis-selling the insurance and treating its customer unfairly. The company offers loans and credit cards as well as savings accounts. According to the FSA there were a number of problems relating to the sales of PPI by Capital One – a form of protective insurance that is supposed to protect the borrower in the event of redundancy, sickness, and accidents, when the borrower might struggle to keep up with repayments.

According to officials from the Financial Services Authority, Capital One did not have the proper systems in place to deal with the sale of payment protection insurance. For example, between 2005 and 2006 the company failed to send out documentation relating to PPI to fifty thousand customers, which meant that the consumers in question were not even aware of what they were and were not covered for under the insurance policy.

In response to the action, Capital One has commented that it will be co-operating fully with the FSA and will not be arguing against payment of the fine.

The Chief Executive of Capital One stated: "Capital One values its relationship with its four million customers. We consistently review our policies and practices and had made a number of significant improvements prior to the FSA's investigation."

Tom Smith
21st February 2007

More information:

• Payment protection insurance 'failing consumers'- press release from the oft