HFC Fined As Part Of Wider PPC Crackdown
by Stewart Douglas
Story link: HFC Fined As Part Of Wider PPC Crackdown
A sub-division of HSBC has today been fined in excess of £1 million after it was found to have failed in adhering to regulations over the sale of payment protection insurance, following the Financial Services Authority’s widespread crackdown on the controversial insurance product.
HFC Bank, a subsidiary of HSBC, was fined £1,085,000 on a day that saw several other institutions fined for their own misselling within the PPI product line, which is designed to offer contingency cover should loan customers fall ill or lose their job or business through the course of their loan repayment.
The move follows a crackdown by regulatory body the FSA on the way in which the PPI product is sold to customers, with many loan customers unaware that the cover is optional, and indeed that they may look elsewhere for their PPI rather than sticking solely with their lender.
Having published detailed guidelines and offered sellers numerous opportunities to improve their selling methods, those fined today mark the worst offenders according to the FSA, and the fines dealt are designed to reflect the severity of the alleged misselling.
Amongst the other fines dealt by the FSA were £610,000 to GE Capital and some £455,000 for Loans.co.uk for putting customers at ‘significant risk’ of misselling and a lack of information, particularly on the availability of alternatively sourced PPI cover.
The process follows moves by the Citizens Advice Bureau to complain about the way in which PPI was sold following a number of complaints from consumer lenders over their PPI cover and allegations of a lack of information provided by the lenders.
It remains to be seen whether the extensive fines levied today will have the desired effect in improving selling processes for PPI products.