Land of Leather fined £210K for PPI failings
Monday, 12 May 2008 12:16
Land of Leather has been fined £210,000 over failing in how it sold payment protection insurance (PPI).
The Financial Services Authority found the furniture retailer had allowed staff to sell PPI without effective training or monitoring to ensure the insurance was sold fairly.
In total 58,000 customers were put at risk of buying unsuitable PPI – with around 8,200 customers paying on average £380 for PPI policies if they did not pay for furniture over a 12-month interest-free period.
Customers taking three years to pay off loans were charged £719 for PPI.
The regulator also fined Land of Leather's chief executive Paul Briant £14,000 for failing to properly oversee the sale of PPI.
Margaret Cole, FSA director of enforcement, said: "Firms must not sell PPI unless they have appropriate systems and controls in place to ensure that their customers are treated fairly.
"We are determined that firms should change their behaviour in selling PPI and the fines against Land of Leather and Mr Briant show our determination in this area."
She added: "Retail firms whose primary business is not selling general insurance will be held accountable to the same regulatory standards as the rest of the financial services industry."
Land of Leather was authorised to sell the insurance – offering cover if people lose their jobs and are unable to repay loans – in May 2006, but it did not ensure all its sales force were fully trained until November 2006.
Furthermore, PPI was sold in 90 stores without any checks running into February 2007.
Customers affected by Land of Leather PPI polices have now been contacted with the opportunity to reconsider whether PPI was suitable for them. No widespread misselling was identified and in a small number of cases the firm cancelled customers' PPI policies.
Daniel Barnes