Alliance & Leicester handed £7m fine
Tuesday, 07 Oct 2008 15:41
Alliance & Leicester given record fine
Alliance & Leicester has been handed a record £7 million fine for payment protection insurance (PPI) failings.
The Financial Services Authority (FSA) said the failings over a three-year period from January 2005 to December 2007 were the most serious they had seen for PPI.
According to the FSA, Alliance & Leicester (A&L) trained its staff to put pressure on customers when they queried the inclusion of PPI in their quotation or challenged advisers' recommendations.
There was also a general failure by advisers to give customers details of the cost of PPI.
Margaret Cole, FSA director of enforcement, said: "The failings at A&L are the most serious we have found.
"This is reflected in the record PPI fine. It is very disappointing that after three years of regulation we are still finding serious problems in PPI sales.
"It is particularly unacceptable for a firm to train its advisers to put pressure on customers when recommending insurance cover which they have not asked for and may not need."
Which? chief executive, Peter Vicary-Smith, said: "It's great to see the FSA hitting companies where it hurts. This record PPI fine should send out a clear message to other companies that mis-selling will be severely punished.
"Now the fine has been set, we want everyone who was mis-sold to get their money back. This can be done by ensuring that any communications to consumers are clear and straightforward about their rights.
"Anyone who has a personal loan or credit card should check whether they have a PPI policy and, if they think it was mis-sold to them, should consider making a complaint."
A&L has agreed to write to all customers who took out policies by telephone in conjunction with an unsecured loan between 14th January 2005 and December 31st 2007 prompting them to review their policy against product information sent to them.
The FSA said it will also review any relevant rejected complaints and claims and has committed to pay redress where appropriate.
The bank also settled at an early stage of the investigation, cutting the fine by 30 per cent from £10 million.