FSA fines motor retailers for PPI failings

Thursday, 21 August 2008 12:00

The Financial Services Authority (FSA) has fined five motor retailers for selling payment protection insurance (PPI) without checking its suitability for customers.

The fines, totalling more than £175,000, were for "serious breaches" relating to the insurance product, which was sold alongside loans for a car or a motorbike.

According to the FSA, the firms - GK Group, George White Motors, Ringways Garages (Leeds), Ringways Garages (Doncaster) and Park's of Hamilton - were selling the insurance in some cases without checking whether the customer would be eligible to claim.

The fines are part of the watchdog's crackdown on PPI, which has been highlighted for widespread mis-selling.

Margaret Cole, FSA director of enforcement, said: "Motor retailers that sell PPI have to meet the same standards as the rest of the financial services industry.

"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 in 2008 and beyond.

"Where we discover PPI failings, we will not hesitate to take tough action and impose higher penalties."

Each of the firms qualified for a 30 per cent reduction in penalty by settling at an early stage of the FSA's investigation. The FSA imposed financial penalties of £51,100 on GK Group, £28,000 on George White Motors, £61,600 on Park's of Hamilton, and £35,000 together for Ringways Garages (Leeds) and Ringways Garages (Doncaster).

The firms all cooperated with the investigation and some have now stopped selling the product, the FSA said.

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