The FSA has fined a mortgage broker for failing to treat its customers fairly over the sale of a type of payment protection insurance (PPI).
The regulator has fined Capital Mortgage Connections (CMC) £17,500 for cold calling customers and failing to give appropriate pricing information on accident, sickness and unemployment (ASU) insurance polices.
The broker's systems and controls were also inadequate.
Jonathan Phelan, head of retail enforcement at the FSA, said: "Cold calling potential customers for mortgage business is against our rules and firms operating in the industry should be aware of this.
"This is the first time we have taken steps against a firm for undertaking this activity and we will continue to monitor the market for instances of cold calling.
"Management is responsible for ensuring that firms comply with our rules and we will act where we find breaches.
"Firms must be able to demonstrate their reasons for recommending a particular insurance policy and we expect firms to have systems and controls in place to monitor their businesses.
"The sale of payment protection insurance, of which ASU is a type, is a priority for the FSA due to the potential level of risk to consumers. We take this very seriously."
The fine has been reduced by 30% as CMC has agreed to conduct a past business review and ensure that all single premium ASU insurance policy customers are aware of the details of its policy.
