Two appointed representatives used high-pressure sales tactics on vulnerable customers
The FCA has fined Porta Verde Financial Services £25,000 after two of its appointed representatives mis-sold insurance to elderly and vulnerable customers.
The companies, which have not been named, used high-pressure sales tactics and misleading information to push consumers into buying insurance for satellite TV equipment, plumbing and drainage repairs.
Porta Verde would have been fined £353,000, but the FCA reduced this to £25,000 after the firm produced evidence of serious financial hardship. It is now in voluntary liquidation.
On one occasion a sales agent misled a customer’s carer to obtain permission to process payments.
On another, a 78-year-old widow thought she had been contacted by her satellite TV provider and asked for the access to the sports channel to be cancelled as she could no longer afford to pay the additional subscription payments. The company processed a payment of £170 for three years’ cover without her knowledge.
Porta Verde failed to take the necessary action to correct the problem, or ensure its appointed representatives (ARs) communicated with consumers in a way that was clear, fair and not misleading, the FCA said.
FCA’s director of enforcement and financial crime Tracey McDermott said: “Porta Verde is responsible for the unacceptable sales tactics used by its representatives. Firms should be in no doubt that we will take action when they – or their appointed representatives – fail to treat their customers fairly.”
The mis-selling took place between October 2010 and June 2012.
Porta Verde acted as a principal to 22 ARs and providing regulatory consultancy, compliance support and oversight.
One company, identified only as Company B, generated a total income of £475,419 of which Porta Verde received £27,266 during the period.
The other, Company A, generated income of £1,883,772 from its sales calls, of which Porta Verde received £46,152 between May 2011 and June 2012.
Porta Verde hired a third party to conduct due diligence on a firm before taking it on as an AR.
However, the FCA found no evidence that Porta Verde had carried out assessments to establish the risk either company could pose to its business or customers.
It also failed to sufficiently monitor both companies, despite being aware that both ARs produced a higher volume of business than its 22 other ARs.
Porta Verde has contacted some customers and offered compensation. If it runs out of money before all have been paid, customers can seek redress from the Financial Services Compensation Scheme.