Swinton fined £770,000

Grovelawn Financial News 29/10/2009

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PPI sales lumped together with home are car insurance

Insurance brokers Swinton has fallen foul of the FSA’s guidelines on selling Payment Protection Insurance (PPI). The total refund amount due to its customers is likely to top £770,000. The FSA found what it called “serious failings” in its sale of payment protection policies. Swinton will now have to contact more than 480,000 customers who bought car and home insurance policies between December 2006 and March 2008.

The refund will be the cost of the premium paid for the PPI sold to them to cover monthly direct debit payments if the borrower find themselves unable to pay their mortgage payments due to accident, sickness or unemployment.

The FSA said the way the policy was sold was incorrect as it was lumped together with car and home insurance and there had not been enough checks to discover whether the policy was required. Therefore, Swinton had not made the purchasing of the policy optional and did not reveal the true cost of the policy when it was sold. Swinton made a total of £7.8 million on the policies and were about to be fined £1.1 million but agreed to pay early so the payment was reduced to £770,000.

← House prices may not be sustainable | News For October 2009 | Credit card repayment charges to double →

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