Swinton fined £770,000 for PPI mis-selling racket
by Gill Montia
The Financial Services Authority (FSA) has fined Swinton Group £770,000 for serious failings in the sale of single premium payment protection insurance (PPI).
The high street broker will also be contacting over 350,000 customers who paid for the cover and offer a full refund.
The regulator found that between December 2006 and March 2008 the firm’s PPI sales process was flawed by an “assumptive” selling technique.
That is to say, PPI was automatically included in insurance quotes without first establishing that the customer had any need for the insurance.
In addition, Swinton did not make it sufficiently clear that PPI was optional and did not properly disclose the cost of PPI at the point of sale.
Instead, the cost was folded into the initial insurance quote.
Swinton PPI customers can now apply for a full refund and the firm will pro-actively review previously rejected claims and pay compensation where appropriate.
The broker accrued approximately £7.8 million from its PPI sales before exiting the market in March 2008, following a request from the FSA.
The regulator’s director of retail enforcement and financial crime, Margaret Cole, says the breaches were deliberate.
She adds: “Swinton was fully aware it should establish a customer’s need for PPI before recommending it, yet nearly half a million policies were sold to customers who didn’t necessarily require them.”