A car supermarket has been fined £91,000 by the Financial Services Authority (FSA) for failing to properly monitor sales of payment protection insurance.
The FSA fined UK Car Group (UKCG) in relation to failings of its appointed representative CC Automotive, trading as Carcraft.
The watchdog said UKCG failed to take reasonable steps to ensure advice given to customers was suitable. It added the company had failed to respond to warnings made in its internal audits and fell short of the standards expected from an authorised firm and appointed representatives.
Carcraft, which is based in Rochdale and describes itself as "the UK's leading car supermarket", has a network of dealerships in England and Wales.
Apart from its main business of selling cars it also sold consumer credit agreements, essentially personal loans, to facilitate vehicle sales. In many cases this included PPI.
Carcraft sold PPI policies on an advised basis from several different providers. The most extensive policies offered cover for loss of life, accident, sickness and involuntary unemployment.
Tom Spender, FSA head of retail enforcement, said: "The risk of consumer detriment arising from the sale of PPI has long been highlighted by the FSA and this case emphasises the need for authorised firms, whether acting in their own right or as principals of appointed representatives, to ensure that their own compliance systems and controls are robustly monitored and implemented effectively."
The failings relate to the monitoring of PPI sales between 1 April 2007 and 30 September 2008.
UKCG agreed to settle the case at an early stage of the investigation so qualified for a 30% discount; without the discount UKCG would have been fined £130,000.
Carcraft said it was disappointed FSA "found it necessary to take action on an issue which occurred several years ago".
However, it added it fully cooperated with the investigation.
The statement added: "The FSA had no cause for concern about the design and structure of Carcraft's systems and controls in relation to PPI selling, and stated that Carcraft's sales model and standard documentation were sound."
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From 6 April 2019