New Swinton blow as customers hit broker for millions in compensation payouts

Swinton is mired in yet another round of expensive customer compensation payouts, costing the beleagured broker millions. 

The Manchester-based broker has set aside £1.79m to refund customers throughout this year, according to latest filed accounts.

This is on top of £541,000 previously set aside for the problem. 

A spokesperson for Swinton said that these refunds were linked to “IT migration payments” and was not linked to PPI or previous mis-selling fines.

The customer payouts were part of the reason Swinton racked up a £31.4m operating loss in 2017. 

Regulators have been breathing down Swinton’s neck for nearly ten years, slapping it with fines of £770,000 for PPI blunders in 2009 and £7.38m in 2013 for mis-selling add-on policies.  

Years of miserable treatment of customers could be finally coming to an end though as it works hand in hand with the FCA to improve compliance. 

Understood to be separate from the IT migration-linked customer payouts, Swinton is having an ongoing review of past complaints.

A spokesperson for Swinton refused to respond to what customer detriment had been identified, and how much money would be paid out as a result.

Swinton’s problems will now be inherited by Ardonagh, which snapped up the broker for £165m this month. 

The David Ross-run consolidator will have to deal with a severely declining financial performance. 

The latest losses were largely attributed to one-off costs amounting to £43.8m that were paid in relation to the group’s investment strategy. Operating profit before the exceptional costs was at £12.4m.

However, the numbers reflected poorly against the 2016 figures, with turnover down from £222.8m to £168.8m. Operating profit before the exceptional costs was down from £25.8m in 2016, when operating profit was at £14.9m.