Capital One Fined By FSA Over PPI
One of the UK's largest credit card providers, Capital One, has been fined by the Financial Services Authority (FSA) for failing "to have adequate systems and controls for selling PPI and for failing to treat its customers fairly".
As the FSA intensifies its campaign against the mis-selling of PPI in the UK, it has handed Capital One a fine of £175,000.
Capital One are not the only PPI provider to have had action taken against them by the FSA for its PPI selling practices as last month the watchdog fined GE Capital £610,000 for similar inadequacies regarding the selling of PPI.
"This fine and other recent PPI-related enforcement cases show we will crack down where firms fail to treat their customers fairly in this area. It is unacceptable for people to be put at risk of buying unsuitable protection insurance through not being given the right information at the right time," said Margaret Cole, director of enforcement at the FSA.
A spokesman for Capital One stated that the company had "worked with the FSA and has addressed all of its concerns".
The fine demonstrates the seriousness with which the FSA is taking regarding poor PPI practices. The watchdog has been investigating almost 200 PPI providers who have been accused of mis-selling policies to customers, failing to make them aware that they can shop around for PPI and failing to provide adequate training for staff selling these insurance policies.
However, there is a fear among analysts that as providers selling lucrative PPI policies are under intense scrutiny, some loan providers may increase the costs of their loans as their sales of PPI are curtailed. This may result in customers having these costs passed onto them.
A spokesman for online comparison site, Moneyfacts, said: "If lenders are forced to lower the cost of their PPI cover, we could potentially see best-buy loan interest rates reaching double figures before the end of 2007."
Alisdair Milton
20th February 2007
More Information:
- Credit Card Insurance
No sooner do you have a nice, shiny new credit card than the phone calls start. Would you like insurance, medical cover, extended this and extra that? The clever card holder resists the telephone sales pitches and reaches for the small print…
- Payment Protection Cover For Your Credit Card - Is It Worth The Cost?
Payment protection cover states quite clearly what it is but what are the ins and outs of the policy and is it worth considering taking out payment protection cover on your credit card.
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