Financial regulator continues its crackdown on unsuitable sales.

The FSA has fined five motor retailers more than £175,000 for “serious breaches” relating to the sale of payment protection insurance.

The regulator said the breaches exposed 2,175 customers to the risk of being sold unsuitable policies.

Last month it fined Liverpool Victoria Banking Services (LVBS) £840,000 for serious failings in the sale of single-premium payment protection insurance (PPI), just days after it slapped a £735,000 fine on Hastings for failing to treat its customers fairly in relation to cancelling 4,550 incorrectly priced car insurance policies.

The firms involved in the recent action are GK Group, George White Motors, two branches of Ringways Garages (Leeds and Doncaster) and Park’s of Hamilton. They all sold PPI alongside loans for a car or motorbike.

The authority found that the firms failed to gather enough information about each customer and created an unacceptable risk of unsuitable sales of PPI. They also failed to monitor the advice given by sales staff and failed to ensure that the correct sales processes were followed.

It said one firm did not correctly assess whether customers were eligible to claim for benefits from the policies they sold, while another did not assess complaints properly.

Margaret Cole, FSA director of enforcement, said all firms had the same responsibility. “Motor retailers that sell PPI have to meet the same standards as the rest of the financial services industry,” she said. “All firms selling PPI must treat their customers fairly, including taking proper steps to make sure sales are suitable and customers are eligible to claim on the policy.

“PPI remains a top priority for the FSA. Where we discover failings, we will not hesitate to take tough action and impose higher penalties.”

Some of the firms have now stopped selling PPI following the FSA’s visit.