Five motor dealers have been fined more than £175,000 by the FSA for breaches relating to the sale of PPI alongside motor finance (See: FSA fines five motor dealers for PPI failings). A total of 2175 customers were subsequently put at risk as a result of these breaches. This fine is another demonstration that the FSA is serious about clamping down on firms which fall below the standards expected when selling PPI (See previous blog: FSA fines LVBS £840,000 for regulatory failings in the sale of PPI).
Some of the shortcomings of these firms identified by the FSA include;
- failure to gather enough information about each customer (including pre-existing medical conditions, existing insurance cover and benefits received from employers) and to assess the suitability of the PPI for that customer;
- failure to monitor the quality of the advice given by sales staff and to ensure that appropriate sales processes were followed;
- failure to adequately assess whether customers were eligible to claim for benefits from the PPI policies they sold; and
- failure to assess complaints properly.
The FSA has warned motor dealers that they are expected to meet the same regulatory standards as financial services firms when selling PPI products and that they must treat their customers fairly. For further information on treating customers fairly, please see our previous blogs:
The FSA is taking action on Treating Customers Fairly failings
FSA Update on Firms’ Progress towards Treating Customers Fairly
