The FSA has fined furniture retailer Land of Leather Limited and its chief executive for failing to ensure that Payment Protection Insurance (PPI) was sold correctly.
The firm was authorised to sell PPI in May 2006, but did not fully train its sales force until November 2006 and sold PPI without effective checks on its sales force until February 2007, the regulator says.
The ruling by the FSA means Land of Leather faces a fine of £210,000, while its chief executive, Paul Briant, must pay £14,000 for failing to property oversee PPI sales.
The FSA says that although Briant delegated the task of addressing PPI issues to other senior management, he cannot delegate responsibility, resulting in the personal fine.
The failings exposed around 58,000 customers to an increased risk of buying inappropriate PPI, with around 8,200 actually paying for PPI.
The FSA discovered the weakness as part of thematic work on PPI sales and the firm voluntarily suspended PPI sales once the FSA identified its concerns.
Had the firm not co-operated with the FSA, it would have faced higher fines of £300,000, while Briant would have had to pay £20,000.
Last September, the FSA said it would be taking a tougher approach to firms deemed to be failing to treat their customers fairly over PPI sales, including increasing fines.
The firm has agreed to contact customers who were sold unsuitable PPI products, and in some cases has cancelled the PPI policies.
Commenting on the fines, Margret Cole, director of enforcement at the FSA, says: “We are determined that firms should change their behaviour in selling PPI and the fines against Land of Leather and Mr Briant show our determination in this area.
“Mr Briant's fine sends out a strong message that senior management are responsible for ensuring that their firm has robust and effective systems and controls and is complying with its regulatory obligations.”
If you would like to comment on this story, contact:
Tel: 020 7484 9805
e-mail: [email protected]
Alzheimer’s is the most common cause of dementia
Total of 72 accredited firms
23% fall since Q1
Achievements, charity work and other happy snippets
Including advice firm Chadkirk WM