High street broker claims to have "acted in good faith"
The FSA has handed out the latest in a series of hefty fines related to payment protection insurance (PPI), slapping Swinton with a £770,000 penalty for “serious failings” in sales of single premium PPI.
Swinton has apologised and agreed to contact more than 350,000 customers who paid for the PPI, offering a full refund. The high street broker said it “acted in good faith”.
FSA enforcement director Margaret Cole said the fine should “serve as a shot across the industry’s bow to remind it to play fair, or not play at all”.
The FSA found that between December 2006 and March 2008 Swinton automatically included PPI in insurance quotes, without making it clear to the customer. The high street broker also failed to tell them about PPI costs.
It resulted in a flood of complaints from customers and the FSA rapped Swinton on the knuckles for breaching compliance rules.
In response to the fine, Swinton said it believed most customers understood the product.
A spokesman said: “The company did not deliberately set out to breach FSA rules or to disadvantage customers, and acted in good faith in the development of its sales process, which it believed was reasonable and proportionate for the low cost of the product.”
Swinton exited the PPI market in March 2008 following a request from the FSA when these failings came to light.
Meanwhile, Swinton this week informed its staff that it would be introducing a pay freeze for the duration of 2010.