FSA fines motor dealerships over PPI sales

by Gill Montia

Story link: FSA fines motor dealerships over PPI sales

The Financial Services Authority (FSA) has fined five motor dealerships a total of £175,000 for mis-selling payment protection insurance (PPI).

GK Group, George White Motors, Ringways Garages (Leeds), Ringways Garages (Doncaster), and Park’s of Hamilton have been found guilty of serious breaches of the regulations governing PPI sales, putting 2,175 customers at risk of buying unsuitable cover.

All five firms failed to gather sufficient information from customers; one firm did not assess whether customers were eligible to claim on their PPI policies and another failed to deal with complaints acceptably.

FSA spokeswoman, Margaret Cole, points out that motor retailers that sell PPI have to meet the same standards as the rest of the financial services industry.

PPI has rarely been out of the headlines over the past three years as large numbers of consumers discovered that their policies were useless when they needed to claim.

In some instances, the cost of PPI had been included in a loan, with the customer unaware that this has happened.

In addition, borrowers commonly reported that they felt obliged to take out a lender’s PPI, rather than compare costs with an independent provider, for fear of not securing the loan.

This led consumer groups to describe PPI as little more than a protection racket.